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Judge: DC Madam Can’t Sell Her Records

Washington, DC [SF Chronicle]- A Vallejo woman indicted on federal charges in connection with an alleged prostitution ring in Washington, D.C., cannot sell or transfer phone records of her clients or pursue a civil lawsuit against her former escorts, a judge ruled Friday.

Deborah Jeane Palfrey, 50, who has threatened to expose some 10,000 clients from 1993 to 2006, “must preserve the availability” of her business records, U.S. District Judge Gladys Kessler wrote in an eight-page ruling granting a temporary restraining order.

Kessler, who scheduled a Monday hearing in the case, also ordered Palfrey to temporarily halt her civil case against 16 former escorts for breach of contract, saying the suit was an attempt to “dissuade or discourage those defendants from testifying as witnesses against her in this criminal action.”

In an e-mail to The Chronicle on Friday night, Palfrey wrote that the judge’s ruling to block her suit “seems a bit unfair to say the least,” saying the contracts she signed with the women “are needed to prove my innocence.”

Palfrey confirmed that she had reached a deal to share phone records of thousands of clients with a media organization that she declined to identify. “It should follow (that) money most likely did not exchange hands, as the legitimate media does not pay for information,” she wrote.

Montgomery Blair Sibley, her attorney in a related civil asset-forfeiture case, said a reasonable interpretation of Friday’s ruling in Washington would still allow reporters to review copies of the phone records.

Palfrey, who served 18 months in prison after a 1991 conviction for running a prostitution ring, pleaded not guilty March 9 to a criminal indictment handed up in Washington charging her with violations of the Racketeer Influenced and Corrupt Organizations Act — known as RICO — and conspiracy to commit money laundering.

The same day she entered her not-guilty plea, Palfrey filed a $75,000 civil lawsuit against one of her former escorts in federal court, accusing her of “engaging in illegal sexual activities with customers of the escort service,” a breach of the contract the escort signed with Palfrey.

Also listed as defendants in that suit were 15 other unnamed former escorts.

The judge’s ruling puts that civil lawsuit on hold, said Sibley, a Washington attorney who filed the suit on Palfrey’s behalf.

Friday’s ruling also bars anyone who has records dealing with Palfrey’s former business from “doing anything that would prevent them from being available for inspection by the government,” Sibley said.

Those records include 46 pounds of phone bills of some 10,000 clients of her business, Pamela Martin and Associates, from 1993 to August 2006, Sibley said. Palfrey has threatened to sell those records to pay for her defense.

Sibley said the original records are “preserved in their original condition.” He added, “The copies, however, of those records have been turned over to a news organization.” The judge’s order Friday is separate from a request by federal prosecutors for a protective order that would bar Palfrey from using any evidence in the case for any purpose beyond preparing for her defense. Palfrey has until March 30 to respond to the government’s motion. On March 9, the same judge ordered Palfrey to wear an ankle bracelet that would track her movements. Palfrey asked — and received — permission from the judge to travel next week to New York to possibly hire private counsel in her criminal case, court records show.

Authorities said Palfrey’s alleged prostitution ring involved 132 college-educated women and generated more than $2 million over 13 years as men paid for sex with her escorts in hotels, residences and offices in Virginia, Maryland and the District of Columbia.

Investigators have already seized about $1 million worth of real estate and $500,000 in cash and stocks in the civil asset-forfeiture case that is now on hold because of the criminal indictment, Sibley said.

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