Sex Crimes

How a Business Owner Becomes Criminally Liable for How Customers Spend ATM Withdrawals

When is an ATM an "interstate commerce facility"? When the FBI needs to make federal prostitution charges stick.

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ChrisGoldNY/Flickr

Until 2010, Oregon entrepreneur Lawrence George Owen, 73, owned one restaurant, eight strip clubs, and two adult-video stores in the Portland area. At these businesses, Owen installed ATM machines in case customers needed to take out cash. With that cash, customers could do an assortment of things—tip dancers, buy food and drinks, leave the establishment and go grocery shopping. And sometimes, customers used the cash to privately pay some strippers for sex. 

Now Owen faces federal charges for "conspiring to use interstate commerce" in promotion of prostitution. 

The charges are the results of a nine year joint-effort by Portland's vice squad and the FBI. Between 2006 and 2009, undercover Portland police officers arranged for 18 acts of prostitution with dancers at three of the clubs. After that federal agents took over, searching Owen's businesses and the homes of his alleged co-conspirators and seizing $843,000 in cash. 

Owen, it should be noted, was living in Mexico most of this time. He is currently on a U.S. Marshall's hold in a Portland jail, after being detained by federal agents in late February.

You might be wondering how Owen faces federal charges if all of the alleged prostitution-promoting took place in Portland. Promoting prostitution is only a federal crime under certain circumstances, such as when the perpetrator transports or coerces an individual across state lines for prostitution purposes. Using mail, telephone calls, or other "facilities of interstate commerce" in service of prostitution will also do the trick. But the FBI has no evidence that Owen enticed or transported strip-club employees from outside Oregon, nor that he used mail or telephone calls to help facilitate their prostitution efforts.

When the FBI wants to make a case against someone, however, they'll find a way. In this case, the FBI decided that ATM machines count as "facilities of interstate commerce."

The affidavit for Owen's arrest states that customers "routinely withdrew cash from the ATMs in operation at the businesses"—cash which involved the interstate electronic transfer of funds—and used this cash to pay for prostitution. "This means the ATMs were interstate facilities that were used to promote and facilitate prostitution," it concludes. 

This isn't the first case where federal prosecutors have considered ATMs interstate-commerce facilities in order to bring charges. Still, "courts have difficulty resolving what it means to use a facility in interstate commerce,'" notes Jason Weathers in a 2002 Western New England Law Review paper. "The increasingly complex and expansive nature of communications technology magnifies the problems associated with interpreting the reach of federal jurisdiction where· such jurisdiction is founded on the use of interstate commerce facilities."

There are quite a few disturbing things about the Owen case, including the fact that federal and local law enforcement spent years (and who knows how much money) investigating and prosecuting consensual sex between adults. But that's (sadly) pretty standard. What's especially worrying is the idea that merely providing a means for people to withdraw money makes business owners liable for what they spend that money on, and that using money withdrawn from an ATM in the commission of a crime could automatically elevate it from a city or state matter to a federal offense. 

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79 responses to “How a Business Owner Becomes Criminally Liable for How Customers Spend ATM Withdrawals

  1. Just as distressing is the interstate commerce ban on alt-text.

    1. Can I crowdsource my alt-text?

      1. Crowdsourced art generally sucks.

      2. “That doesn’t mean ass-to-mouth.”

      3. It’s cheaper to outsource. I could hook you up with some Indian freelancers I know.

        1. Are they funnier than south african mulattos?

          1. You mean absolutely or on a per dollar basis?

      4. “A facility of interstate commerce”

      5. “Dispenses pieces of paper that say ‘FEDERAL’ on them.”

        1. “Dispenses pieces of paper that say ‘FEDERAL’ on them.”

          So Bernanke is an unindicted co-conspirator?

          1. The $41 in federal reserve notes in my pocket has seven signatures among them. I’d go after them first and hope one of them rats out the others. Apply enough pressure and we may finally get to Bernanke.

  2. I got it!!!! What if government limited itself!!??

    What a novel idea this limited gov’t thingy would be. Just think, we can elect the right people and they will drastically reduce gov’t and increase individual freedom. They will limit themselves so much, the result of this experiment will be that people will govern themselves.

    1. The problem, of course, is that government *does* limit itself.

  3. Wouldn’t the bank/financial agent the ATM connects to also be guilty of the ‘crime’?

    1. We’re all guilty. Full stop.

      1. There are two types of people:

        The guilty and the unindicted conspirators.

        1. “Unindicted co-conspirator A is a large bank that…”

    2. Not only that, but every single person who deposits money in that bank is partially responsible, because it’s not just that the bank has a single pile of money in each person’s account, right? Don’t forget the guy who drives the armored car and re-fills the ATM with cash when necessary?

      I mean, these prosecutors are off their game. Think of the asset forfeiture possibilities they’re missing there!

    3. Who printed that money. For if we hold the bank accountable, isn’t it an indictment of our entire federal financial system?

      And I, for one, am not going to sit here, and listen to you bad-mouth the United States of America!

      Gentlemen!

      1. “Arrest the Fed, the Treasury and the Mint!”

        1. Nah, thievery and whoring of that magnitude are perfectly legal.

        2. Who signed those bills?

      2. Comments like that will put you on Double-Secret Probation.

    4. I’d argue that the bank is exclusively guilty of this “crime”. The strip-club owner never brought cash in from out of state to fill up those ATMs. The bank did that. Not only did they supply the money, the bank collected a transaction fee for each prostitute paid.

      It doesn’t make any sense. But that’s another problem with these ridiculous ad hoc “crimes”. They’re really just ex-post-facto pretexts for whatever punishment the prosecutor has already decided is appropriate. They exist long enough to serve the immediate purpose and then disappear before they get the righteous legal smack-down that they deserve.

      1. the bank collected a transaction fee for each prostitute paid.

        My understanding is that the business owner gets the fee, or at least a good chunk of it, if they own the ATM. That’s why you see varying ATM fees at different places, and high fees in captive markets.

        1. These weren’t official bank ATMs like at your local Bank America. These were private stand alone ATMS. There are two fees you pay at these machines. One to the bank your card is from for using a foreign ATM, and the other to the owner of the ATM and the business owner (sometimes the same person but sometimes these are leased).

          If you’ve ever been to a sleazy strip club and needed $20 RIGHT NOW and used one of these you’d understand that’s why you pay $5 or more for the withdrawal.

    5. I was just thinking that. Deeper pockets for fines, too.

  4. This case demonstrates how utterly broken and worthless the Grand Jury system has become.

    If the Feebs can convince a bunch of citizens that installing an ATM = using interstate commerce to facilitate a crime, then the citizens are no longer checking the state.

  5. DON’T CRITICIZE OUR PROTECTORS!!!

  6. WRT ATM withdraws –

    With that cash, customers could do an assortment of things?tip dancers, buy food and drinks, leave the establishment and go grocery shopping…

    No one orders a hamburger at a strip club. There are just some things widget knows, and leave it at that for now. The purpose for offering food and a strip club comes from some the owner breaking through a gauntlet of ordinances to make his club legal.

    1. Someone must order food, because those ordinances generally require a percentage of sales be food for certain licenses.

    2. The staff just rings some of the cash up as food. That’s covered in hour 1 of the training.

    3. I don’t care what you say, widget, Crystal City Restaurant had excellent burgers.

      1. It is dinner and a show. So far no luck getting anyone to pick it for their going-away lunch.

  7. Why the fuck is the FBI investigating prostitution anyway?

    1. I would be very surprised if a federal charge doesn’t allow them more freedom in asset seizure.

    2. Federal Booty Inspectors. DUH.

    3. It’s not prostitution! It’s sex trafficking! Trafficking sex! Like kidnapping teenage girls and transporting them to far away places! It’s terrible! We need to involve the feds! For the children!

    4. The way I heard it, at the time of the 9/11 attacks the FBI had dozens of agents investigating prostitution in New Orleans and one or two looking into domestic terrorism. Don’t know if it’s true, but it wouldn’t surprise me. Hey, isn’t it the job of the FBI to enforce prevailing morality???

      1. You come off sounding like Ron Paul and his preoccupation with investigating the cause of 9/11.

        There are bad guys out to get us all the time and we hire good guys to stop them. What if the good guys we hire are fucking off? We don’t want to investigate that because that is crazy.

        1. There are no good cops. Evidence of this is the existence of bad cops.

    5. Because they didn’t get any free pussy like the DEA boys?

    6. It would have been a crime if the agent paid for prostitutes with his own money.

  8. Wow. I feel so much safer knowing that they got this madman off the streets.

    1. “The investigation took 9 years because we needed to be…uh…sure…that illegal sex was taking place there.”

      1. “They strippers figured out we were cops and stopped fucking us, so we concluded the investigation.”

      2. It took them 9 years (and lots of staff turnover) before they found a stripper gullible enough to be entrapped.

      3. Sounds like a “very special” ‘Law and Order: SUV’ mini-series.

        1. Except there were no victims in this case- except for the dude who will get his life wrecked over an ATM by a special brand of rooting hogs called the FBI.

  9. “After that federal agents took over, searching Owen’s businesses and the homes of his alleged co-conspirators and seizing $843,000 in cash. ”

    There is the motivation for charging the guy. He was rolling in cash and they wanted it.

    Also, investigators arranged for sex 18 times over a three year period without Owens being tipped off? Go ahead, try to convince me they didn’t actually have sex and I will laugh in your face.

    1. investigators arranged for sex 18 times over a three year period

      Sounds like investigators committed 18 crimes over a three year period, to me.

    2. They probably didn’t charge it every time, they saved it all up to build a RICO case.

  10. Does this ATM dispense ones?

    1. Strippers make change, don’t they?

    2. No, you take the $20 over to the cashier who makes change for you.

  11. This is just hetero sex right? Maybe Owen is being charged for not accommodating gay customers.

  12. Out of the number of men who allegedly took money out of that ATM and used it to pay prostitutes for sex, I wonder what percentage of those were FBI agents doing that “in connection with the investigation”

    1. I shoulda read the article:

      A Portland police undercover vice squad held undercover sting operations from 2006 to 2009 at the strip clubs, sending in a man to see if he could obtain prostitution services from dancers.

      The man made 21 visits to three of the businesses and paid for prostitution services on 18 of the visits. By June 2010, federal agents obtained warrants to search 10 of the businesses and five residences tied to alleged family conspirators, the affidavit said. The federal court records do not identify the businesses associated with Owen.

      So, the answer is probably somewhere around 100%.

    2. Taxpayer money, at that. Must be nice work, getting to boink hookers on someone else’s dime.

  13. Someone please explain to me how to distinguish between this government and organized crime.

    1. Organized crime is more honest about extorting money from people?

    2. The mob is usually pretty upfront that they’ll hurt you if you don’t pay them.

      1. No, I don’t see how that helps me sort one from the other.

        1. OK, try this:

          The mob is usually upfront that they are the mob?

    3. You’ll have to visit either Breitbart or Slate. Opposing ends of devious control can always distinguish the other’s despotism.

      As you well know, in these threads most of us realize the fucking entire political mass is a mangled interaction of loathing and debilitating hatred for the other which brings them together in a colluding soup that casts an iron net on total freedom. Fuck the future and its rancid past. Nothing is being learned. Nothing is being advanced. Intelligence is being wasted on trivial shit that promotes practically zero expansion of the open society.

      1. mangled interaction of loathing and debilitating hatred for the other which brings them together in a colluding soup that casts an iron net on total freedom.

        Fuckin’ poetry, right there.

    4. I’ll tell you. Government marinara sucks. They don’t use fresh tomatoes, they don’t cook it long enough, and they use jarred garlic.

      1. JARRED GARLIC?!

        1. Only the government is capable of such horrors.

    5. If they have a defined benefit retirement package it’s the government.

      1. Ah, ok. You win.

  14. Where are all the fucking trafficked victims the goddamn Federal Bureau of FUCKING Idjits delivered from this supposed unholy hell of consensual sex-for-bucks? The single beneficiary of this immoral assault on consensual adult activity is the slime pit of callous pigs called the FBI.

  15. In addition, when the customers farted during sex, their farts might drift across state boundaries, making this a federal matter.

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