EVERETT — A former nude dancer who jumped into the controversial bikini coffee stand business deposited more than $2 million in her bank in just three years.

She bought property and coffee huts with other cash, sometimes bringing along a money counter to dole out the bills. Her baristas reported making hundreds of thousands of dollars out of her stands, working mainly for tips. The women told cops the price for a cup of coffee started at $6 and customers typically paid with a $20 bill. The baristas kept the rest to shake their breasts or expose their genitals. They charged more for sex acts with the droves of men who stopped at the stands, mainly located along Highway 99 in Snohomish County.

Prosecutors on Thursday charged Carmela Panico, 52, of Snohomish, with promoting prostitution and money laundering. They allege that Panico was the madam of drive-through brothels, raking in millions of dollars and laundering the illegal profits through property acquisitions.

“Panico’s businesses were driven by prostitution and lewd behavior,” Snohomish County deputy prosecutor Bob Hendrix wrote in charging documents.

Her profit margin at times was twice that of well-run, established coffee stands, Hendrix said. Panico allegedly under-reported her earnings to the Internal Revenue Service, dealing in large quantities of cash. Investigators seized nearly $250,000 from her Snohomish home during a raid last year. The city of Everett has taken legal steps to keep the cash, alleging the money is profits from a criminal enterprise.

Panico is scheduled to appear in Snohomish County Superior Court next week to answer to the felony charges. She remains out of custody. Her attorney had told the court that Panico is no longer in the coffee business and has sold off some of her stands and leased others.

A former Snohomish County sheriff’s sergeant also remains charged with multiple crimes in connection with the lengthy investigation into Panico’s Java Juggs stands. Darrell O’Neill is accused of tipping off Panico and baristas to ongoing police investigations.

O’Neill was given sexual favors in exchange for the information, according to court documents. Five of Panico’s stands were located in his patrol area in south Snohomish County, mainly along Highway 99.

O’Neill, a 30-year veteran with the sheriff’s office, resigned after his arrest last year. He has pleaded not guilty to the charges. His trial is scheduled for November.

Detectives say before Panico 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.

Panico opened Java Juggs in 2008. One of her stands burned down that same year. Police suspected a rival coffee stand owner was to blame. She rebuilt the stand and opened up six more. Panico preferred to hire women with previous “dancer” or “escort” experience, police were told.

Baristas were expected to make a certain amount of money during their shifts. Panico collected that money and her employees kept whatever was left over. Panico gave more hours at busier stands to the women who made more money for her.

“The sales goals were effectively rent that the girls paid to have the opportunity to perform lewd conduct or acts of prostitution,” Hendrix wrote.

Baristas said Panico fined them for what she called infractions. Those included not wearing high heels throughout their shifts, failing to maintain a tan or not wearing proper makeup. The baristas were fined if they wore boots in the winter or didn’t keep supplies up in the stands. The fines came out of their paychecks, but they weren’t regularly paid by Panico.

They worked for tips and sex acts and sexually explicit shows, which garnered more money than just slinging coffee. Some women reported earning between $15,000 and $30,000 a month.

One barista told investigators she earned half a million dollars working at Panico’s stands.

The boss allegedly encouraged the women to do shows but other times warned them against exposing themselves, court papers said. Each stand had video cameras and Panico regularly reviewed the surveillance footage, according to the baristas.

Panico was prosecuted in the past for lewd acts at her coffee stands. In 2011, she 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. She never spent any time in jail in connection with the Edmonds case.

Her stands 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. It was during that investigation when detectives learned of O’Neill’s alleged involvement. Witnesses told police about a “dirty cop.”

Everett police launched an investigation in concert with other police agencies. Detectives pored over Panico’s finances. Investigators reportedly documented Panico making dozens of large cash deposits since spring 2010. 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.”

She allegedly kept two sets of books, one detailing her actual profit and another for the earnings she reported to the IRS.

Panico was arrested in January based on allegations that she was pressuring baristas not to cooperate with Everett investigators. Her manager also alleged that Panico was threatening to fire her and kill herself if the woman cooperated with detectives.

Diana Hefley: 425-339-3463; hefley@heraldnet.com. Twitter: @dianahefley.