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Saw this on Los Angeles Times page.
Feds Say Dirt Track Has Dirty Little Secret - Los Angeles Times
Feds Say Dirt Track Has Dirty Little Secret
By Peter Y. Hong
July 22, 2006 in print edition B-1
When Kimberly Mao paid a local doctor last summer a little more than a million dollars for a sprawling ranch in horse country here, folks thought she was just another well-to-do city dweller seeking a rural retreat in the piney woods of East Texas.
But weeks after the 47-year-old Hacienda Heights woman purchased the property, bulldozers began cutting a winding course of bumps and berms into the soil, turning the tranquil farm into a raceway for the fast-growing sport of motocross.
Neighbors were outraged. “People move to the country for peace and quiet, not to live next to a motorcycle track,” said resident and Dallas Police Det. Warren Martin. Local authorities, however, said there was nothing they could do.
Then things really got racy.
On April 18, Mao was arrested in Madisonville, Texas, for allegedly heading a multimillion-dollar prostitution and money laundering conspiracy. In a 40-count federal indictment, the government said she hid profits from her brothels in Inglewood, South Gate, Baldwin Park and Dallas in the East Texas property and four other tracks she owned in California, Texas and Florida, collectively named MX Oasis.
She has pleaded not guilty and is free on bail.
Federal prosecutors say Mao’s case reveals the vast reach of global organized crime – from prostitutes’ home countries in Asia and Latin America to brothels in Southern California and finally to farm communities in rural Texas.
But Roger Jon Diamond, the Santa Monica lawyer representing Mao, said the government is trying to bootstrap a questionable low-level prostitution case into a major prosecution to feed “the Bush administration pandering to its right wing, fundamentalist, evangelical base.”
“To use an old expression, they have made a federal case out of this,” he said.
He also said Mao didn’t know anything about any prostitution her tenants may have conducted.
Federal action against prostitution involving foreign women “trafficked” by brothel owners has indeed been a Bush administration priority. Justice Department officials say they have tripled the number of sex trafficking prosecutions since 2001.
In an operation in San Francisco and Los Angeles a year ago, hundreds of federal agents and local police swarmed massage parlors, chiropractic offices and apartments suspected of being brothels, arresting 45 people and detaining 150 suspected prostitutes.
No trafficking charges resulted, though two alleged San Francisco brothel owners pleaded guilty to the lesser charge of alien harboring.
The raids led to Mao’s indictment, said Assistant U.S. Atty. Carmen Luege. The case has not produced trafficking charges either.
Ironically, what Diamond calls the “fundamentalist, evangelical base” could aptly describe Mao. Deeply religious, according to those who know her, she sends her teenage daughter to an evangelical Christian private school in the San Gabriel Valley.
Federal tax records show that Mao has contributed heavily to Christian groups. In 2004 alone, her charitable foundation donated more than $170,000, including $40,000 to her Hacienda Heights church, Hosanna Presbyterian, and $95,000 to MXers for Jesus, a group that holds religious services at motocross races. Neither officials from the church nor the MXers group could be reached for comment.
In the family-centered world of dirt bike racing, Mao was known for her devotion to her 16-year-old son’s budding amateur career.
“She was a motocross mom,” said Andrew Campo, a freelance journalist who met Mao on the racing circuit and is her spokesman.
Mao purchased a motor home to transport her son and his motorcycles to races across the country and arranged for home-schooling to free his schedule. Her racetracks were both a business venture and an investment in her son, Campo said.
Campo, who lived at the Palestine track with Mao and her family most of March, said his boss’ days revolved around her son’s grueling daily training, which began with bike prep at 7 a.m., followed by morning gym workouts and riding through much of the day. Mao prepared healthy fare for her son and other racers in training, Campo said, and ran errands so they wouldn’t be interrupted.
She also prayed a lot, said Alan McDonald, the caretaker who maintains the track, which remains open on weekends. “She prayed for two hours straight,” he said.
McDonald, who believes that Mao is innocent, called her “the best boss I’ve ever had.” She offered to help pay his medical bills after his hospitalization for a heart condition, McDonald said.
Mao charged riders $15 a head to practice their moves on weekends. Eventually, she planned to develop a series of nationally sanctioned races, which would draw thousands of spectators to her tracks, Campo said, and build lodging at the tracks for the spectators.
Prosecutor Luege said these businesses “would not stand on their own. If you shut off the illegal income, the businesses would not survive.”
On top of the purchase price, Mao “must have spent $50,000 to $80,000 getting the track ready,” said Charles E. Dickens, a jewelry store owner whose cattle graze next to Mao’s track. “I know how much it costs to lease the earth-movers and equipment. I’m a businessman. It just didn’t make sense to me.”
The government, in its indictment and a 74-page search warrant affidavit, alleged that the real source of the money for the tracks were six brothels Mao owned in Southern California, including a tanning and foot salon and a massage parlor in Inglewood, two health clubs in South Gate and a massage parlor in Baldwin Park.
Mao hid her involvement through elaborate fronts, the government alleged. Three others charged with her – Edward Lutt, Charles E. Fields and Randall Johnson – posed as owners of the businesses while funneling the bulk of earnings to Mao, according to the affidavit.
All have pleaded not guilty and, along with Mao, are awaiting trial in February.
In 2002, for instance, Randall Johnson, the legal owner of Health Therapy in Baldwin Park, reported making $29,000 in profits, while paying Mao $550,000 in “consulting fees,” according to the indictment.
The pattern was repeated by the other businesses, authorities contend. From 2000 to 2005, Mao’s firm, ZNC Plaza Inc., received $6.6 million in “royalty payments” or consulting fees from the businesses owned by Lutt, Fields and Johnson, the government alleged.
In 1988, Mao was charged with pimping and conspiracy, and in 1995 she was charged in Los Angeles County with keeping a house of ill fame. Diamond said she was not convicted on any of the charges.
According to a search warrant affidavit filed in the current case, a woman at one of Mao’s buildings told an Immigration and Customs Enforcement agent that Mao had confided that she once worked as a prostitute. Diamond denied the allegation.
The lawyer compared Mao’s situation to a hypothetical case of vendors at Staples Center selling beer to underage customers. “Should Jerry Buss or Donald Sterling be held responsible?” Diamond asked, referring to the owners of the Lakers and Clippers. “It’s possible there was an isolated act of hanky-panky” at Mao’s properties, Diamond said, but “that doesn’t make the whole enterprise illegal.”
Meanwhile, Mao’s website, www.mxoasis.com, has announced that her group has been able to “work through” events “better fit for a Hollywood blockbuster” and refocus on the “original vision.” Motorcyclists are still gunning around the Palestine track as federal authorities and Mao contest whether the property can be seized as the fruit of the alleged prostitution.
Anderson County Sheriff Greg Taylor and others in Palestine don’t care about the particulars of the federal case against Mao, as long as the track is shut down.
“It’ll suit me just fine,” Taylor said. “My problems will be solved.”
Feds Say Dirt Track Has Dirty Little Secret - Los Angeles Times
Feds Say Dirt Track Has Dirty Little Secret
By Peter Y. Hong
July 22, 2006 in print edition B-1
When Kimberly Mao paid a local doctor last summer a little more than a million dollars for a sprawling ranch in horse country here, folks thought she was just another well-to-do city dweller seeking a rural retreat in the piney woods of East Texas.
But weeks after the 47-year-old Hacienda Heights woman purchased the property, bulldozers began cutting a winding course of bumps and berms into the soil, turning the tranquil farm into a raceway for the fast-growing sport of motocross.
Neighbors were outraged. “People move to the country for peace and quiet, not to live next to a motorcycle track,” said resident and Dallas Police Det. Warren Martin. Local authorities, however, said there was nothing they could do.
Then things really got racy.
On April 18, Mao was arrested in Madisonville, Texas, for allegedly heading a multimillion-dollar prostitution and money laundering conspiracy. In a 40-count federal indictment, the government said she hid profits from her brothels in Inglewood, South Gate, Baldwin Park and Dallas in the East Texas property and four other tracks she owned in California, Texas and Florida, collectively named MX Oasis.
She has pleaded not guilty and is free on bail.
Federal prosecutors say Mao’s case reveals the vast reach of global organized crime – from prostitutes’ home countries in Asia and Latin America to brothels in Southern California and finally to farm communities in rural Texas.
But Roger Jon Diamond, the Santa Monica lawyer representing Mao, said the government is trying to bootstrap a questionable low-level prostitution case into a major prosecution to feed “the Bush administration pandering to its right wing, fundamentalist, evangelical base.”
“To use an old expression, they have made a federal case out of this,” he said.
He also said Mao didn’t know anything about any prostitution her tenants may have conducted.
Federal action against prostitution involving foreign women “trafficked” by brothel owners has indeed been a Bush administration priority. Justice Department officials say they have tripled the number of sex trafficking prosecutions since 2001.
In an operation in San Francisco and Los Angeles a year ago, hundreds of federal agents and local police swarmed massage parlors, chiropractic offices and apartments suspected of being brothels, arresting 45 people and detaining 150 suspected prostitutes.
No trafficking charges resulted, though two alleged San Francisco brothel owners pleaded guilty to the lesser charge of alien harboring.
The raids led to Mao’s indictment, said Assistant U.S. Atty. Carmen Luege. The case has not produced trafficking charges either.
Ironically, what Diamond calls the “fundamentalist, evangelical base” could aptly describe Mao. Deeply religious, according to those who know her, she sends her teenage daughter to an evangelical Christian private school in the San Gabriel Valley.
Federal tax records show that Mao has contributed heavily to Christian groups. In 2004 alone, her charitable foundation donated more than $170,000, including $40,000 to her Hacienda Heights church, Hosanna Presbyterian, and $95,000 to MXers for Jesus, a group that holds religious services at motocross races. Neither officials from the church nor the MXers group could be reached for comment.
In the family-centered world of dirt bike racing, Mao was known for her devotion to her 16-year-old son’s budding amateur career.
“She was a motocross mom,” said Andrew Campo, a freelance journalist who met Mao on the racing circuit and is her spokesman.
Mao purchased a motor home to transport her son and his motorcycles to races across the country and arranged for home-schooling to free his schedule. Her racetracks were both a business venture and an investment in her son, Campo said.
Campo, who lived at the Palestine track with Mao and her family most of March, said his boss’ days revolved around her son’s grueling daily training, which began with bike prep at 7 a.m., followed by morning gym workouts and riding through much of the day. Mao prepared healthy fare for her son and other racers in training, Campo said, and ran errands so they wouldn’t be interrupted.
She also prayed a lot, said Alan McDonald, the caretaker who maintains the track, which remains open on weekends. “She prayed for two hours straight,” he said.
McDonald, who believes that Mao is innocent, called her “the best boss I’ve ever had.” She offered to help pay his medical bills after his hospitalization for a heart condition, McDonald said.
Mao charged riders $15 a head to practice their moves on weekends. Eventually, she planned to develop a series of nationally sanctioned races, which would draw thousands of spectators to her tracks, Campo said, and build lodging at the tracks for the spectators.
Prosecutor Luege said these businesses “would not stand on their own. If you shut off the illegal income, the businesses would not survive.”
On top of the purchase price, Mao “must have spent $50,000 to $80,000 getting the track ready,” said Charles E. Dickens, a jewelry store owner whose cattle graze next to Mao’s track. “I know how much it costs to lease the earth-movers and equipment. I’m a businessman. It just didn’t make sense to me.”
The government, in its indictment and a 74-page search warrant affidavit, alleged that the real source of the money for the tracks were six brothels Mao owned in Southern California, including a tanning and foot salon and a massage parlor in Inglewood, two health clubs in South Gate and a massage parlor in Baldwin Park.
Mao hid her involvement through elaborate fronts, the government alleged. Three others charged with her – Edward Lutt, Charles E. Fields and Randall Johnson – posed as owners of the businesses while funneling the bulk of earnings to Mao, according to the affidavit.
All have pleaded not guilty and, along with Mao, are awaiting trial in February.
In 2002, for instance, Randall Johnson, the legal owner of Health Therapy in Baldwin Park, reported making $29,000 in profits, while paying Mao $550,000 in “consulting fees,” according to the indictment.
The pattern was repeated by the other businesses, authorities contend. From 2000 to 2005, Mao’s firm, ZNC Plaza Inc., received $6.6 million in “royalty payments” or consulting fees from the businesses owned by Lutt, Fields and Johnson, the government alleged.
In 1988, Mao was charged with pimping and conspiracy, and in 1995 she was charged in Los Angeles County with keeping a house of ill fame. Diamond said she was not convicted on any of the charges.
According to a search warrant affidavit filed in the current case, a woman at one of Mao’s buildings told an Immigration and Customs Enforcement agent that Mao had confided that she once worked as a prostitute. Diamond denied the allegation.
The lawyer compared Mao’s situation to a hypothetical case of vendors at Staples Center selling beer to underage customers. “Should Jerry Buss or Donald Sterling be held responsible?” Diamond asked, referring to the owners of the Lakers and Clippers. “It’s possible there was an isolated act of hanky-panky” at Mao’s properties, Diamond said, but “that doesn’t make the whole enterprise illegal.”
Meanwhile, Mao’s website, www.mxoasis.com, has announced that her group has been able to “work through” events “better fit for a Hollywood blockbuster” and refocus on the “original vision.” Motorcyclists are still gunning around the Palestine track as federal authorities and Mao contest whether the property can be seized as the fruit of the alleged prostitution.
Anderson County Sheriff Greg Taylor and others in Palestine don’t care about the particulars of the federal case against Mao, as long as the track is shut down.
“It’ll suit me just fine,” Taylor said. “My problems will be solved.”
