Israeli Man, U.S. Associate Charged in Multimillion-dollar Prostitution Operation

Prosecutors say more than $10 million landed in the accounts they used for payments to their 'VIP Escorts' enterprise

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File photo: a man under arrest.
File photo: a man under arrest.Credit: Olivier Fitoussi

A Colorado woman and an Israeli man are charged with laundering millions of dollars that U.S. prosecutors say came from a high-end prostitution operation they ran for years.

Tracy Reynolds of Alamosa, Colorado, was arrested Tuesday at the Tampa, Florida, airport, where the 45-year-old was trying to board a flight to Mexico, according to a statement by the U.S. Attorney's Office for the Southern District of New York.

Izhak Cohen, 53, was arrested in Hadera, Israel, and prosecutors will seek his extradition to the U.S., according to the statement.

Reynolds and Cohen started VIP Escorts in 2012, according to prosecutors. Their prostitutes charged between $700 and $1,000 in New York and other locations, with the money going into different bank accounts controlled by Reynolds, according to the complaint filed in court.

More than $10 million passed through those accounts, and Reynolds sent more than $1 million to Cohen in Israel in small transactions meant to hide where the money came from and who controlled it, according to the charges.

They are each charged with one count of conspiracy to commit money laundering and two counts of money laundering. Each charge carries a maximum sentence of 20 years in prison if they are convicted.

A phone number listed under Reynold's name in Alamosa was disconnected on Saturday. It is not clear whether she or Cohen have attorneys representing them who can speak on their behalf.

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