United States Attorney Deborah R. Gilg announced that William Knox, age 64, was sentenced today in Omaha by Chief United States District Judge Laurie Smith Camp to 12 months plus one day in federal prison, followed by two years of supervised release, following his convictions on two counts of violating federal law. He was also fined $50,000 for each count. Mr. Knox had previously pled guilty to one count of conspiracy to use facilities in interstate commerce in aid of a racketeering enterprise, that is, a business enterprise involving prostitution, and to induce travel in interstate commerce with intent to engage in prostitution and one count of conspiracy to commit money laundering. Mr. Knox also forfeited a 2005 Ford Expedition, a 2004 Nissan Roadster, and three bank accounts totaling $4,641.89. In addition, Mr. Knox paid $225,000 in satisfaction of a money judgment for proceeds of the offense.
Starting in the late 1990s and continuing to 2012, Mr. Knox owned and managed a “spa” in Omaha, Nebraska. The spa had different names over time but was frequently referred to as the Ninety-Third Street Spa.
Ninety-Third Street Spa was, in fact, a front for prostitution. The majority of customers received sex acts from the workers, rather than legitimate spa services, in exchange for money. Some customers traveled to the spas from Iowa and from other states to obtain sex acts for money.
Mr. Knox generally hired someone to work at the front desk, take appointments, collect money, and schedule workers. Customers paid a fee that varied by the length of the “session.” That fee was kept by Ninety-Third Street Spa. Customers separately negotiated a “tip” with the worker, which the worker kept. Mr. Knox had “sessions” with workers, during which he obtained sex acts in exchange for money.
Mr. Knox also negotiated agreements with others to buy Ninety-Third Street Spa as an ongoing business and make payments to Mr. Knox over time. Mr. Knox never ultimately completed the sale of Ninety-Third Street Spa.
Mr. Knox and others acting at his direction deposited revenue generated by the operation of Ninety-Third Street Spa into a bank account that Mr. Knox opened and controlled, under the name NTS Spa Ltd. dba Ninety-Third Street Spa (“spa bank account”). Mr. Knox wrote checks drawn on the spa bank account for “management fees” and deposited them into another account he had opened, under the name Knox Contracting & Development William R. Knox (“KCD bank account”). Mr. Knox wrote checks drawn on the KCD bank account for particular “pay periods” and deposited them into a personal checking account he had opened under his name.
Mr. Knox placed advertisements for Ninety-Third Street Spa on the Internet. Customers arranged appointments using cellular telephones and other facilities in interstate commerce.
During the time when Mr. Knox owned and managed Ninety-Third Street Spa, there were five or more participants operating and managing it and an overall total of more than 20 workers providing commercial sex acts.
The investigation was conducted by the Federal Bureau of Investigation, the Omaha Police Department and the Internal Revenue Service, under the auspices of the Child Exploitation Task Force, which also includes the Council Bluffs Police Department, the Douglas County Sheriff’s Office, the La Vista Police Department, the Mills County Sheriff’s Office, and the Nebraska State Patrol.