The List No One Wants to Be On
Woman Pleads Not Guilty to Running D.C. Call-Girl Service

By Paul Duggan
Washington Post Staff Writer
Saturday, March 10, 2007

Deborah Jeane Palfrey pleaded not guilty yesterday to running a call-girl service for the well-heeled in Washington. Then she departed the federal courthouse in round dark sunglasses. Photographers and TV cameras swirled around her; reporters barked queries about her clients. Who were they?

But the alleged madam said nothing, clutching her lawyer's right arm with a black gloved hand as they strolled away.

She just smiled a little. Her lipstick: ruby red.

C'mon, who were they?

"The clientele was upscale and came from the more refined walks of life here in the nation's capital," was all Palfrey would say later about the men who partook of her company's services. If you want to know more, you'll have to pay, said her attorney. Palfrey has put the phone records of her defunct escort firm up for sale -- 46 pounds of them, about 10,000 client phone numbers dating to 1993 -- to help defray her legal expenses.

"We've had at least a dozen offers for exclusivity to the list," said the lawyer, Montgomery Blair Sibley. Bidders include media outlets that regularly practice "checkbook journalism," he said, and others that are considered "the gold standard" of the profession.

"Cash offers," said Sibley, naming no names or prices.

Anyway, it was no ordinary morning in Judiciary Square.

A week after being indicted on federal racketeering charges related to the alleged prostitution business -- one that authorities said employed college-educated women, mostly in their mid-20s, who were dispatched to clients in hotel rooms and homes in the Washington area -- Palfrey, 50, flew in from the West Coast for arraignment in U.S. District Court yesterday. It took maybe three minutes.

"I plead not guilty," she told Judge Gladys Kessler, who allowed Palfrey to return home to Vallejo, Calif., in the San Francisco Bay area, until her trial.

About four hours later, before catching a plane, Palfrey stood in front of a cluster of TV and radio microphones near the courthouse, reading from a sheet of paper as pedestrians and construction workers stopped to watch.

Her nails: ruby red, too.

"I owned and operated a local out-call adult services agency . . . as a legal, high-end erotic fantasy service," Palfrey said, glancing up at the cameras. The business, Pamela Martin & Associates, "functioned as a legal fantasy concern," meaning that the hanky-panky, as far as Palfrey knew, was strictly legit -- just erotic game playing, $275 for 90 minutes.

"One Price Policy," her ads used to read.

"No Hidden Fees. . . . Best selection and availability before 9 p.m. each evening. . . . Cash or traveler's checks only."

Before being hired, the women ("subcontractors," as she described them) agreed in writing to abide by the law, Palfrey said. If any of them engaged in sex acts for the money, she said, it wasn't her fault.

The business, which closed last fall, employed about 130 women in 13 years, Sibley said. He said Palfrey and those perfumed subcontractors split the fees. Authorities said Palfrey's total take was about $2 million.

"Each woman was furnished with guidelines explaining the difference between legal and illegal conduct," Palfrey said. "No promises or claims . . . were ever made to a client that he should expect the associate to perform illegal acts for hire."

This isn't the alleged madam's first brush with the law. She was convicted of running a prostitution service in California 16 years ago and spent 18 months behind bars. So naturally she would demand written promises of good behavior (so to speak) from her employees, she said, "having learned from past mistakes in judgment."

The written agreements were no joke, Sibley said. In fact, after the arraignment, he ducked into a clerk's office in the courthouse and filed a breach-of-contract lawsuit against a woman who he said once worked for Palfrey. The woman, Sibley said, "has admitted" that she performed sex acts for money. Apparently, like several other women, she made this admission under questioning by investigators.

Who was she? C'mon. Who?

Sibley didn't hesitate to identify her, in the lawsuit and for the TV cameras. Reached last night, the woman sighed into her cellphone. "No comment," she said after a pause. "Call my lawyer." Her attorney, David Schertler, was "not available to talk," said a woman who answered the phone in his office.

Sibley talked plenty, though. After the escort business, he said, the woman in the lawsuit went on to become "a scientist." He also described her as "a doctor" at the National Institutes of Health.

So the whole mess is the doctor's fault, Sibley said -- and the fault of the other women who traded sex for money after promising Palfrey in writing that they wouldn't. Because of them, the lawsuit says, Palfrey "has and will continue to be damaged by the criminal indictment," charging her with racketeering and conspiracy to launder money.

"Such accusations came as a shock," said Palfrey, reading from her statement.

Authorities first moved against her last fall in a civil case, seizing her assets -- about $1 million in real estate and $500,000 in cash and stocks -- that prosecutors alleged were proceeds of a criminal enterprise. Now she needs money to fight back, Sibley said.

Pssst! Hey, sailor. Want to buy some phone numbers?