Sheriff's Sgt. Darrell O'Neill also was caught up in Tuesday's coffee stand takedown. The veteran cop reportedly tipped off baristas to ongoing undercover police investigations. Court documents say O'Neill was given sexual favors in exchange for his help.
O'Neill, 58, was booked into the Snohomish County Jail early Wednesday for investigation of promoting prostitution and official misconduct. He bailed out just a couple of hours before he was expected to make an appearance in Everett District Court.
The stands' owner, Carmela Panico, also bailed out of jail by Tuesday evening.
No charges have been filed. The investigation continues.
Panico, a former nude dancer, was prosecuted in the past for lewd acts at her coffee stands. More than two years ago, the Snohomish-area woman, 51, was caught breaking the law at Java Juggs in Edmonds. That stand was equipped with a stripper pole and Panico and others were accused of giving customers sexually explicit "shows" along with their coffee.
And the woman Panico hired to manage her stands was caught up in Everett's first high-profile coffee stand scandal.
In 2009, Samantha Lancaster, then 18, was working for Bill Wheeler Sr. at a Grab-N-Go espresso stand. Wheeler's stands made national headlines after Everett cops revealed that baristas were exposing themselves to customers in exchange for money. Lancaster and her fellow baristas never saw any jail time in connection with that case. Instead, they were warned to keep clean or face a criminal conviction. Lancaster later unsuccessfully fought to keep Everett police from releasing the risque photographs of her that were taken during the police investigation.
Court records say Lancaster years ago moved on to manage Panico's stands.
The 2009 Grab-N-Go investigation motivated numerous city and county officials to adopt rules for bikini espresso stands. In the county and some cities the stands are classified as adult entertainment businesses, requiring special licenses for the company and its employees.
Panico never spent any time in jail in connection with the Edmonds case. Her stands, however, again came to the attention of investigators after Kent police detectives in 2012 arrested several baristas at one of her espresso huts in their city. During that investigation detectives learned of O'Neill's alleged involvement. Witnesses told police about a "dirty cop," according to a police affidavit.
O'Neill has been with the sheriff's office for 30 years. Five of Panico's stands are located in his patrol area in south Snohomish County, mainly along Highway 99, according to a police affidavit.
O'Neill is accused of not only turning a blind eye to illegal activities at the stands but also helping Panico and Lancaster avoid arrest. He reportedly advised the baristas when it was best to perform their illicit "shows," and had given them information about police operations, including the descriptions of undercover detectives and their vehicles, court papers said.
Video surveillance shows O'Neill arriving at the stands in his uniform and patrol car. He allegedly is seen hugging and kissing several of the baristas. Investigators say he also used state computers to check the license plates of people visiting the stands.
Witnesses told investigators that O'Neill engaged in sexual activities with Panico and Lancaster.
Court papers indicate that O'Neill knew he was under investigation as early as October. He reportedly gathered a bunch of baristas together and warned them that they were being watched. He also stopped frequenting the stands, but later resumed his patronage.
O'Neill was put on paid administrative leave following his arrest Tuesday. His law enforcement authority also was suspended. An internal investigation will follow the criminal case.
Early in his police career, O'Neill came under investigation for a bizarre off-duty shooting.
In 1986, he was moonlighting as a driver for Lifestyle Limousine of Everett. He used his personal backup weapon to shoot at two teen girls, seriously injuring one.
O'Neill shot the 16-year-old after she and her younger friend reportedly brandished what was described at the time as a "very authentic looking plastic weapon."
Initially, police said that O'Neill had been held for hours at gunpoint, driving the girls from Northgate to the Federal Way area, where the shooting occurred. A different story emerged the next day, less a kidnapping and more an attempted robbery by the young passengers.
"After driving the girls around Seattle for several hours, O'Neill informed them that they were running up a big bill," a King County sheriff's spokesman said at the time.
The girls then pulled out what turned out to be a toy handgun and threatened to rob O'Neill and take the limo. The teens wound up accused of attempted robbery.
In the coffee stand investigation, detectives were told that O'Neill was aware of an escort business being run out of Panico's seven stands. Some of the baristas reportedly performed "car dates" after hours. They also reportedly used the stands and outbuildings for prostitution, according to court documents. Panico was said to prefer hiring women with previous "dancer" or "escort" experience, court papers said.
As part of the investigation, law enforcement probed Panico's finances. Last year, she reported gross revenues for her stands in excess of $1.1 million. Investigators reportedly have documented Panico making dozens of large cash deposits since spring 2010, ranging from just over $10,000 to $66,000, according to a search warrant.
Her bankers told police that the money often had a foul smell, and that Panico told them it was because "she maintained these denominations in her freezer at home with fish."
Panico opened the Java Juggs business in 2008. Detectives say before she went into the coffee business she was connected to Talents West, a sex-oriented entertainment business that for years was operated by the Seattle-based Colacurcio crime family.
The Colacurcios formerly owned Honey's north of Lynnwood, one of several nude nightclubs they operated in the region before being forced to close as part of a federal prosecution.
Reporter Scott North contributed to this story.
Diana Hefley: 425-339-3463; email@example.com.
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