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$3.9 Million Sex Club Fine Upheld

PORTLAND, Maine – A federal judge ruled Monday that a $3.9 million penalty against brothel boss Gary Reiner is not only legal, but less than a third of the possible penalty for his four money laundering and prostitution convictions.

The $3.9 million forfeiture is in addition to a prison sentence, expected to be imposed during Reiner’s Jan. 23 sentencing hearing, on convictions for the crimes he committed as boss of Kittery’s Danish Health Club between the years 2000 and 2004.

U.S. District Court Judge D. Brock Hornby issued a 24-page memorandum Oct. 31, supporting the federal government’s recommended forfeiture against Reiner. Those recommendations include $3.9 million in penalties for each of two counts, $3.9 million for a third conviction and $581,310 for a fourth.

The government recommended, and the judge concurred, that Reiner should be penalized monetarily for the single largest amount of the four possible forfeitures. Therefore, ruled Judge Hornby on Monday, Reiner and his co-conspirators are subject to a $3.9 million penalty.

“(Reiner’s) involvement with this hugely successful interstate prostitution operation for over a decade allowed the business not only to survive, but to flourish,” wrote Judge Hornby. “Without his self-described ‘devot(ion)’ of his best efforts to rescue the club from mismanagement and economic disarray, the club might well have failed, and the women and customers would not have crossed state lines to engage in prostitution.”

Judge Hornby disagreed with Reiner’s argument that he derived some proceeds in exchange for legitimate services as an attorney and that those should not be included in calculating monetary penalties against him. The judge described any payments for legal services to Reiner from the brothel as “irrelevant.”

“Reiner was not merely acting as a lawyer counseling a client on the legal consequences of a proposed course of conduct,” the judge wrote. “Rather, Reiner was assisting his client, with willful blindness if not more, in thwarting the law.”

Judge Hornby rebuked Reiner’s argument that not all of the cash he deposited into Ocean National Bank accounts on behalf of the club was obtained illegally.

“I reject the challenge,” wrote Judge Hornby. “The purpose of this so-called ‘health club’ was prostitution. The deposits all derived from cash and credit card sales from the club’s operations, or payments by the prostitutes to the club for the privilege of working there – all illegal proceeds.”

Reiner was found guilty by a federal jury of conspiracy to commit interstate prostitution crimes, causing someone to engage in prostitution, inducing someone to travel to engage in prostitution and conspiracy to launder money. His trial featured testimony from prostitutes, a Kittery police official, a pimp and several johns who paid for sex at the club.

Guilty pleas were entered by co-conspirators Mary Ann Manzoli for money laundering, pimp Lance Williams and prostitute Cheryl Stilwell for transporting a minor to engage in prostitution and club manager Russell Pallas for prostitution charges.

Reiner is free on bail and also subject to a minimum of five years in federal prison.

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