HAMMOND β A prostitution ring that thrived in Lake County during the s turned out to be a disaster for its operators, but at least the federal government made some money on it. Joseph E. The money was split between the U. Department of Justice and the Internal Revenue Service to compensate the agencies for the investigation that closed down his strip clubs.
The payment was part of a sentence U. District Court Judge James T. Moody approved the forfeiture in recent weeks. Johnston is still serving a month prison term imposed as part of a plea bargain that spared him from an even heavier penalty that could have resulted from his conviction by a jury.
A federal grand jury later indicted seven men and women on allegations they worked for or bankrolled the acceptance of prostitution fees through credit card accounts and skimmed off the profits in devious ways that made it look as if the defendants had made money on the stock market or other legitimate investments. A number of lawyers, doctors and other professionals counted Johnston as a friend, golfing partner and business associate, according to letters written to Judge Moody to show him mercy at the sentencing.
McKnight, who was identified as an operator of the Indiana Vending Co. Johnston, a minor figure in the conspiracy, received three years probation. Charges were later dropped against the other defendants. An email has been sent to with a link to confirm list signup. Edit Close. Featured Local Savings.
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