Alleged Madam Threatens to Sell List of 10,000 Clients

The indictment charges Palfrey with violating the Racketeer Influenced and Corrupt Organizations Act and with three counts of interstate travel in aid of racketeering and one count of conspiracy to launder money.

Authorities said Pamela Martin and Associates advertised in the D.C. Yellow Pages but did not have an address here. They said callers seeking to use the service were connected to Palfrey or someone working for her in California.

"Palfrey hires women who are at least 22 years of age, possess some college education and have employment outside of their prostitution activities," according to the affidavit, filed by an Internal Revenue Service agent last year in the forfeiture case.

Authorities said she placed ads recruiting women in the Washington City Paper, on the Internet, in the student newspaper at the University of Maryland and elsewhere.

"Palfrey personally interviews the women by telephone and has them mail an application with a photograph" to Palfrey's post office box in California, IRS agent Troy A. Burrus said in the affidavit. "The women tell Palfrey the days that they will be available, but Palfrey encourages them to work at least three nights a week."

He added, "After a woman is hired as a prostitute, she is sent to a 'screening' appointment, and is required to engage in sexual activity, without payment, with a male designated by Palfrey." The women had sex with the male "testers," authorities said, "so that Palfrey can ensure that none of her employees are law enforcement officers."

Burrus said "the prostitutes reside in Virginia, Maryland and Washington, D.C., and travel to locations in these three jurisdictions. . . . Palfrey tells the prostitutes where they should go, the time of the meeting with the customer, and the customer's name."

Staff writer Allan Lengel and staff researcher Meg Smith contributed to this report.