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Financial Crimes

Houston woman pleads guilty to 'structuring' prostitution proceeds

DENVER - A woman from Houston, Texas, was sentenced Tuesday by U.S. District Court Judge Marcia S. Krieger to serve three years probation, with the first six months on home detention, for structuring prostitution proceeds. The sentence was announced by: Acting U.S. Attorney David Gaouette, District of Colorado; U.S. Immigration and Customs Enforcement (ICE) Special Agent in Charge Jeffrey Copp; and Internal Revenue Service Criminal Investigation Special Agent in Charge Christopher Sigerson. Gates was also order to pay a $2,000 fine.

Yong Gates, 71, was charged by Information on May 28, 2008. She pleaded guilty before Judge Krieger on Dec. 17, 2008, and was sentenced June 9.

According to the facts contained in the original charging document, as well as the stipulated facts contained in the plea agreement, beginning on or about December 2001, and continuing through Aug. 6, 2003, Gates knowingly sought to employ prostitutes at her business, Sun Health Spa, located at 10763 Turner Blvd. in Longmont, Colo. Gates admitted that Sun Health Spa generated much of its revenue from prostitution.

Also, beginning on June 30, 2003, and continuing through Aug. 14, 2003, Gates knowingly concealed prostitution proceeds totaling $26,050. The defendant deposited the prostitution funds in amounts less than $10,000 into her business bank account in an attempt to evade currency-reporting requirements, also known as structuring.

Gates has agreed not to contest a civil forfeiture action, where she will forfeit certain assets valued at less than $125,000, as well as seized assets, including: $550 in currency seized from Sun Health Spa in August 2003; $4,069.33 seized in December 2005 from a bank account in the name of Sun Health Spa; $2,050 in currency seized from Sun Health Spa in December 2005; and $6,000 in currency seized from Yong Gate's residence.

"The United States Attorney's Office is grateful to both ICE and the IRS Criminal Investigation for their thorough investigation of this case," said Acting U.S. Attorney David Gaouette.

"As demonstrated in this criminal case, it is illegal to structure deposits to avoid the bank-reporting requirements for deposits over $10,000," said Jeffrey Copp, special agent in charge of the ICE Office of Investigations in Denver. "ICE routinely works with our law enforcement partners to help identify, investigate and pursue prosecution of those who try to mask their criminal activity through regular and suspiciously calculated bank deposits under the $10,000 threshold." Copp oversees the states of Colorado, Montana, Utah and Wyoming.

"The prosecution of individuals who intentionally violate our anti-money laundering laws by concealing income from illegal activities, constitutes a serious threat to our community, and the integrity of our financial system," said IRS Criminal Investigation Special Agent in Charge Christopher M. Sigerson.

This case was investigated by ICE, IRS's Criminal Investigation, Colorado Police Department, and the Front Range Financial Task Force.

Gates was prosecuted by Assistant U.S. Attorney Joseph Mackey. Assistant U.S. Attorney Tonya Andrews with the U.S. Attorney's Office's Asset Forfeiture Unit is handling the forfeiture