No more jail for madam behind espresso-stand prostitution

EVERETT — A former exotic dancer won’t spend any more time in jail for running a multimillion-dollar prostitution ring out of her Snohomish County roadside coffee stands.

Carmela Panico faced up to a year in jail at Monday’s hearing, but a judge agreed to grant the espresso madam a first-time offender waiver. That spared her any more time behind bars. Panico served two days in jail after her stands were raided in 2013.

The former Snohomish woman, 53, was forced to walk away from her lucrative bikini espresso stands in 2014 after pleading guilty to promoting prostitution and money laundering. Prosecutors alleged that the stands were operating as drive-through brothels, raking in millions.

Snohomish County deputy prosecutor Bob Hendrix said Panico engaged in predatory behavior, profiting from women with drug problems and financial troubles.

Hendrix agreed not to push for jail time because Panico helped make the case against a corrupt police officer, Superior Court Judge Thomas Wynne was told.

Former Snohomish County Sheriff’s Sgt. Darrell O’Neill’s “abuse of public trust” demanded action and the case against him was weaker without Panico’s promised testimony, Hendrix said.

“Her cooperation helped secure a felony conviction for former Sgt. O’Neill,” Hendrix said.

O’Neill was accused of providing Panico with information about police investigations into her coffee stands and turning a blind eye to the prostitution operation. Investigators were told that Panico engaged in sex with O’Neill in exchange for his help.

The longtime police officer pleaded guilty in October to felony conspiracy to commit money laundering and two counts of misdemeanor official misconduct. He faces up to a year in jail when he’s sentenced later this week. He resigned from the sheriff’s office shortly after his 2013 arrest.

Panico, dressed conservatively on Monday, chose not to speak at the sentencing. She also declined to talk with reporters afterward.

Wynne noted that Panico hasn’t been charged with any new crimes since her guilty plea. She’s made substantial progress toward rehabilitation and sending her to jail now wouldn’t serve any “useful purpose,” the judge said.

Panico moved away from Snohomish County to start over, defense attorney Jennifer Kaplan said. She lives in a small town in eastern Washington, where she works as a waitress in a short-order restaurant. She’s learning to design and install kitchens. She volunteers at an animal shelter, and she raises money for her community’s food bank, according to her lawyer.

“For the first time in her adult life, she’s not involved in the adult entertainment industry,” Kaplan said. “She has no plans to return.”

Panico will be on probation for a year.

Before she went into the coffee business, Panico was connected to Talents West, a company owned by Frank Colacurcio and his son, according to police records. 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 “escort” experience.

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.

Some of the baristas reported earning hundreds of thousands of dollars a year.

Investigators dug deep into Panico’s finances. She had deposited more than $2 million in her bank accounts over 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.

Panico forfeited $250,000 and her stands to the city of Everett as part of her plea agreement. The city flattened at least two of the stands.

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

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