Man Sentenced for Operating a Multi-State, Internet-Based Prostitution, Money Laundering, and Identity Theft Operation

The United States Attorney’s Office for the Middle District of Pennsylvania today announced the sentencing of an individual convicted of operating a multi-state, Internet-based prostitution, money laundering, and identity theft operation.

According to United States Attorney Peter J. Smith, Roger Sedlak, 47, formerly of Perkasie, Pennsylvania, was sentenced to a total of 145 months in prison and a fine of $5,000. The sentence, imposed by Senior United States District Judge William W. Caldwell, included a sentence of 121 months for the prostitution and money laundering charges followed by a consecutive sentence of 24 months for the identity theft.

In June 2010, Sedlak pleaded guilty to four counts of a superseding indictment: (1) conspiracy to commit prostitution, and to persuade, coerce, and entice interstate travel for the purpose of prostitution; (2) knowingly persuading, inducing, enticing, and coercing individuals to travel interstate to engage in prostitution; (3) aggravated identity theft in connection with wire fraud; and (4) money laundering.

Smith said that the charges stemmed from an investigation by the Harrisburg offices of the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation that revealed Sedlak began operating an “escort service” known as Diamond Escorts through the Internet. Sedlak pleaded guilty to devising a scheme through which women would apply to be “escorts” and would have to meet personally and have sex with Sedlak to be accepted. Clients submitted personal information online to gain access to the service. Smith said that Sedlak held himself out as an executive of a non-existent airline known as CQ Air. Using various aliases, Sedlak would rent rooms at a variety of local hotels claiming that he was using them for airline business. The “escort service” actually was a prostitution operation through which appointments could be made to purchase sex for cash. Prostitutes would travel from various states to Pennsylvania to engage in prostitution and that their earnings would be split with Sedlak.

Smith said the aggravated identity theft charges stemmed from Sedlak’s unauthorized use of the identity information of another person to set up accounts with NetSpend Corporation, a pre-paid credit card provider. Smith said Sedlak would set up accounts with the stolen identity information, deposit proceeds of the prostitution operation into the accounts and then use the NetSpend cards to rent hotel rooms and make other purchases for the prostitution operation.

The money laundering charge resulted from Sedlak’s financial transactions using proceeds of the prostitution operation in an effort to conceal the true nature of those proceeds.

Smith thanked the Harrisburg offices of the FBI and IRS-CI for their excellent investigative work. Smith said, “In sentencing Sedlak, Judge Caldwell noted that Sedlak had been involved in fraudulent activities for his entire adult life. The investigative efforts of FBI Special Agent Timothy Lynch and IRS-CI Special Agent Christopher Kegerreis were outstanding in this case. Their hard work laid the groundwork for this very successful prosecution. My thanks goes to them for their tenacity and professionalism. The sentence imposed today should send a resounding message to those who would engage in similar fraudulent activity that the punishment for making those choices is severe indeed.”

The case was prosecuted by Assistant U.S. Attorney James Clancy.