EVERETT — A Snohomish woman under investigation for allegedly using her espresso stands as drive-through brothels is demanding that cops give her back the $250,000 in cash they confiscated.
Carmela Panico, the owner of Java Juggs and Twin Peaks coffee stands, recently filed a lawsuit against Everett and the city’s police chief. She alleges detectives wrongfully seized a quarter of a million dollars and a 2012 Ford Expedition. Panico, 51, is asking a Snohomish County Superior Court judge to order Everett to return her property and to award her legal fees.
The lawsuit was filed after the city officials notified Panico that they planned to keep the cash, alleging that it was proceeds from criminal activity, including money laundering. Detectives allege that Panico is “living a lavish lifestyle” financed through “organized crime.”
City officials declined to comment on the lawsuit.
Panico’s attorney, Gil Levy, did not respond to The Herald’s request for a comment.
Panico was arrested in June for promoting prostitution and permitting sex to be sold out of her espresso stands. A Snohomish County sheriff’s sergeant also was caught up in the prostitution sting. Darrell O’Neill, a 30-year veteran, allegedly tipped off baristas to ongoing undercover police investigations focused on Panico’s businesses. Detectives say O’Neill was given sexual favors for his help.
He has since resigned from the sheriff’s office.
No charges have been filed against anyone in the case.
Everett police continue to investigate Panico’s businesses, including her finances. Last year, she reported gross revenues in excess of $1.1 million — that’s double what she said she earned the previous year. 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.
Police were told that Panico’s bank deposits often were in $20 bills and much larger than typically seen from other espresso stands.
Detectives searched Panico’s Snohomish home and seized $250,000 in cash. They also took computers, cameras, cellphones and a money counter. Investigators also raided her Snohomish County coffee stands. All are located along Highway 99, except for the Java Juggs on Broadway Avenue in Everett.
Investigators say that Panico bought the seven espresso stands in the last five years. She bought an eighth stand in the last few weeks. Panico also reportedly has bought a home in Snohomish and a vacation home. She has invested more than $300,000 in recent years and appears to have “expensive hobbies,” including horses and boats. She also allegedly has paid for several plastic surgeries, according to a search warrant.
Panico, a former nude dancer, was prosecuted in the past for lewd acts at her coffee stands. More than two years ago, 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” along with their coffee.
Panico never went to 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 is accused of turning a blind eye to illegal activities at the stands and also helping Panico and her baristas 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.
Police documented numerous calls between Panico and O’Neill.
FBI agents also installed surveillance cameras to monitor at least three of the stands. Court papers say federal agents agreed to help with the investigation because of Panico’s past. She had ties 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 in 2010 as part of a federal prosecution.
Panico opened the Java Juggs business in 2008.
Investigators were told that Panico preferred to hire women with previous “dancer” or “escort” experience. Another woman who managed Panico’s stands, and also reportedly engaged in sex with O’Neill, was arrested in Everett’s first high-profile coffee stand scandal in 2009.
Some of Panico’s baristas reportedly performed “car dates” after hours. Sometimes they took johns to neighboring business parking lots to engage in sex, court papers said. They also reportedly used the stands and outbuildings for prostitution, according to court documents.
Some of the baristas told police they were paid a commission and allowed to keep their tips. Others said that Panico set a profit for the day and anything beyond that amount the baristas were allowed to keep. If business was slow, baristas were expected to make up the difference out of their own pockets.
Some of Panico’s employees told detectives that they averaged $100,000 to $350,000 a year performing sexually explicit shows and sexual acts at the coffee stands.
Diana Hefley: 425-339-3463; firstname.lastname@example.org.