Human trafficking victims freed in U.S. prostitution bust

NEW YORK (Reuters) - Authorities on Tuesday broke up a $7 million three-state prostitution and money laundering ring, rescuing two human trafficking victims and arresting more than a dozen people, New York's attorney general said.

The crackdown was the result of a 16-month investigation into Somad Enterprises Inc., an advertising agency with offices in New York, New Jersey and Pennsylvania that placed classified ads for five escort services, Attorney General Eric Schneiderman and New York City Police Commissioner Ray Kelly said at a joint news conference.

In a 180-count indictment, 19 people and one corporation were charged with enterprise corruption, money laundering, falsifying business records, narcotics sales and prostitution. In addition, three prostitution clients have been charged.

"This was almost like the 'Mob Goes to Business School' kind of a situation," Schneiderman told reporters.

Authorities said Somad kept about half the $7 million in revenue the ring earned in the past 2 1/2 years with the other half going to the escort groups that prostituted about 40 women at any given time, many from China and Korea. In breaking up the ring, authorities rescued two women who were victims of human trafficking, one of whom was from Korea, Schneiderman said.

So far, 17 people have been arrested in connection with running the prostitution ring. In addition, police arrested three prostitution clients, including the former dean of students at well-respected Scarsdale High School, David Mendelowitz, Schneiderman said. Mendelowitz, who served on the suburban New York school's drug task force, was charged with patronizing a prostitute, possession of crack cocaine and hindering prosecution.

Two of the 19 people indicted remain at large, the New York Police Department said.

(Editing by Barbara Goldberg and Bill Trott)