Java Juggs owner pleads guilty in prostitution case

EVERETT — A Snohomish woman admitted Tuesday that she operated drive-through brothels out of her bikini espresso stands and laundered the hefty profits to conceal her crimes.

Carmela Panico was in Snohomish County Superior Court to answer to allegations that her coffee huts, Java Juggs and Twin Peaks, were prostitution operations that made her millions. In an agreement reached before the hearing, Panico pleaded guilty to second-degree promoting prostitution and money laundering, both felonies.

In exchange, the former exotic dancer will surrender her claims to the nearly $250,000 Everett police seized from her home in 2013. Panico also agreed to walk away from her coffee businesses, turning her five Snohomish County stands over to the city of Everett. She also promised not to operate any new coffee huts in the county.

Panico, 52, also must provide “testimony against others who were involved in her criminal activities.” That could mean she will testify against Darrell O’Neill, a former Snohomish County sheriff’s sergeant accused of helping Panico avoid detection by police. O’Neill allegedly was given sex in exchange for his help. Panico admitted on Tuesday that she personally provided sexual favors to the former sergeant.

O’Neill’s trial is scheduled to begin in November.

Snohomish County deputy prosecutor Bob Hendrix plans to recommend that Panico be sentenced to two days in jail and be given credit for two days already served. She is scheduled to be sentenced in March and faces up to a year in jail.

After Tuesday’s hearing, surrounded by television cameras, Panico shook hands with Everett police investigators. She declined to speak with reporters.

Detectives say that before Panico went into the coffee business, she was connected to Talents West, a company owned by Frank Colacurcio and his son. The Colacurcios ran multiple strip clubs, including Honey’s in Lynnwood. The Colacurcios were forced to shut down their nightclubs as part of federal organized-crime prosecution.

Court papers say FBI agents agreed to help with the investigation into Panico’s stands because of her past.

Panico, a college graduate, opened Java Juggs in 2008 and operated as many as eight stands, mainly along Highway 99. She preferred to hire women with previous “dancer” or “escort” experience. Her stand in Edmonds included a “stripper pole.”

Baristas were expected to make a certain amount of money during their shifts. They kept what was left over. The women engaged in sex shows and prostitution to earn bigger tips. Baristas told investigators that Panico knew about the illegal activity and at times encouraged it.

She discouraged her employees from calling police to report customers who engaged in lewd behavior. She said the “customers paid more to be allowed to do this and that it was allowed at her stands,” Hendrix wrote in court documents.

Some of the baristas reported earning hundreds of thousands of dollars. One baristas told detectives she made $500,000 working for Panico.

Investigators dug deep into Panico’s finances. They learned that she had deposited more than $2 million in her bank accounts over a period of about three years. She purchased multiple espresso stands, often with cash. Detectives alleged that Panico used proceeds from criminal activity to finance a “lavish lifestyle” that included expensive hobbies, including horses and boats. She also paid for several plastic surgeries, court papers said.

Investigators say the profit margin at the Java Juggs stands at times was twice that of well-run, established coffee huts.

Panico was arrested in the past for lewd conduct at her Edmonds stand. Her businesses came under scrutiny again when Kent police launched an investigation into sexually explicit shows at her Twin Peaks stand there.

It was during that investigation that police were told about a “dirty cop.” Everett police began investigating O’Neill’s alleged involvement and the nature of Panico’s businesses.

Both were arrested last year after raids at the stands. Since then, Panico has sold off a couple of coffee huts and leased others. She sold her Snohomish home in February.

The city of Everett is expected to give Panico a month’s notice when they plan to take possession of the stands. Panico agreed to “terminate all leases or other entanglements” and prepare the huts to be seized.

The city hasn’t finalized what will happen to the stands.

“We are currently exploring our available options, and will likely sell the stands, but not for operation at their current location,” city spokeswoman Meghan Pembroke said. “Under no circumstances will the city go into the coffee business at these locations, either as operators or landlords.”

Everett leaders also are developing new legislation to address some of the associated crimes that have turned up at bikini coffee stands such as Panico’s, she said.

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

More in Local News

A Democrat and ex-Republican team up to end two-party politics

Brian Baird and Chris Vance unveil a new organization called Washington Independents.

The beavers weren’t happy, either, about Mill Creek flooding

A tree fell on their dam, sending a rush of water into a neighborhood near Jackson High School.

Aerospace workers adjust to changing industry

The number of Boeing workers dropped almost 10 percent since last year

Lynnwood, Marysville, Sultan consider ban on safe injection sites

If approved, they would join Lake Stevens and Snohomish County, which have temporary bans.

Mill Creek councilman no longer lives in city, panel finds

The Canvassing Board determined Sean Kelly is not eligible to vote there.

A whole life ahead. Five-month-old Felix Shope lies in his stroller ready to go home from the Snohomish County Courthouse with his new mom and dad, Alicia and Josh Shope of Edmonds. A family down the hall tends to a child and are likely awaiting their own adoption proceedings. (Dan Bates / The Herald)
16 youngsters get the gift of home on National Adoption Day

A joyful day at county courthouse tempered with the great need for stable, loving homes.

Stranger offered candy to student walking home from school

The Granite Falls School District is warning families about… Continue reading

Man arrested after stolen car crashes in Everett

The accident occurred in the 100 block of SE Everett Mall Way.

5-vehicle crash in Arlington kills 62-year-old woman

Medics had transported her to the hospital, where she later died.

Most Read