Agents charge key player in Las Vegas escort service
One of the operators of a large escort service authorities allege is tied to prostitution has been arrested by federal agents and charged with unlawfully structuring more than $1.8 million in transactions to evade financial reporting requirements.
Emmanouil "Manny" Varagiannis, 42, also the general manager of the popular strip club Olympic Garden, was ordered released Friday on his own recognizance with electronic monitoring while he fights a single felony structuring count.
Between December 2008 and October 2011, Varagiannis is alleged to have made 208 cash deposits under $10,000 to four bank and credit union accounts under his control. Federal laws designed to prevent money laundering require the reporting of all cash transactions above $10,000.
The criminal case, brought by a financial crimes task force run by the Internal Revenue Service, is thought to be the first in a crackdown on the lucrative escort service business, long regarded as a haven for prostitution on the Strip. Las Vegas police are part of the task force.
In an 11-page criminal complaint unsealed Friday, authorities said Varagiannis is not listed as an officer of the escort service, Midnight Inc., which does business as Midnight Entertainers. But he and his wife, Amy, are the signers on all of the company's business accounts.
State records show that Amy Varagiannis, who has not been charged, is the president of Midnight Inc., which was incorporated in 2003. The company provides female outcall "entertainers" directly to the hotel rooms of tourists on the Strip.
Longtime local lobbyist Jay Brown is listed as the resident agent of the Midnight Inc.
Brown and his son, attorney David Brown, appeared in court representing Emmanouil Varagiannis, who was arrested Thursday morning. They declined to comment afterward.
The elder Brown, also an attorney, has represented both Midnight Inc. and the Olympic Garden in business matters over the years.
According to the complaint, Dolores Eliades, the daughter of longtime Olympic Garden operator Pete Eliades, cooperated with IRS agents in the investigation when they interviewed her in July.
Agents described her as the topless club's co-owner who was involved in several "proposed business transactions" with Varagiannis.
"Dolores has had conversations with Manny where he stated that he gets
60 percent of the earnings from the girls who work for his escort business," the complaint said. "Manny told Dolores he was aware of the fact that the girls were having sex with customers for money.
"Manny stated that he trains the employees who work in the phone bank at the escort business on how to detect the police."
The complaint, written by Las Vegas police Detective Robert Whiteley, who is assigned to the federal financial crimes task force, said escort services "depend on prostitution as their main source of income."
According to the complaint, IRS agents learned that Midnight Inc. put out a flier promising kickbacks to cabdrivers who refer customers to the escort service.
Las Vegas police conducted an undercover sting during the financial investigation uncovering direct evidence that female entertainers working for Midnight Inc. were involved in prostitution, the complaint alleged.
Contact reporter Jeff German at jgerman@reviewjournal.com or 702-380-8135.
