Former cop sent to jail for shielding coffee-stand brothels

EVERETT — A former Snohomish County sheriff’s sergeant was sentenced to a year in jail Thursday for betraying his oath and helping a woman transform roadside espresso stands into drive-through strip clubs and brothels.

Darrell O’Neill, 60, apologized to his family, friends and the community. He said he’s now focused on trying to rebuild damaged relationships and to win back trust.

The 31-year veteran of the sheriff’s office in October pleaded guilty to one count of felony conspiracy to commit money laundering and two counts of misdemeanor official misconduct.

The sentence was the maximum under the law. Superior Court Judge Millie Judge declined a defense request that O’Neill be allowed to serve his time in work release.

Evidence showed O’Neill shared information about undercover police investigations at the coffee stands. The businesses were then raking in millions of dollars a year selling sex. The investigators had no way of knowing how those responsible may react to scrutiny, the judge said.

“You put their lives at risk and I can’t ignore that,” she said.

O’Neill was taken into custody at the conclusion of Thursday’s hearing. He’ll serve his time in neighboring Skagit County’s jail.

Deputy prosecutor Robert Grant told the judge the maximum punishment was the least O’Neill deserved. The prosecutor said his young son usually has two questions for him each day when he comes home from work. Did he send any bad guys to jail? Did he talk to any cops?

A preschooler understands that cops and bad guys run in different circles, Grant said. O’Neill crossed boundaries.

“He’s a bad guy who was a cop,” he said.

O’Neill pleaded guilty as his trial approached on the more serious charge of second-degree promoting prostitution. If convicted, he risked a long stretch behind bars. Prosecutors said they planned to prove there were aggravating circumstances supporting harsh punishment, including evidence of the deputy repeatedly abusing his position of trust and the amount of money involved in the illegal activity.

O’Neill came under investigation after baristas in Kent began talking about a “dirty cop” in Snohomish County who reportedly was supplying their boss with confidential police information.

The “boss” was Carmela Panico, who then owned the Java Juggs and Twin Peaks chains in Snohomish and King counties. Prior to entering the coffee business, the former exotic dancer had for years worked for the Colocurcio family, helping to run strip clubs in Washington. Those businesses, including the notorious Honey’s north of Lynnwood, were shut down by federal prosecutors who proved the clubs were being used as prostitution fronts.

The coffee hut investigation by Everett police and the FBI found Panico was raking in multimillion-dollar profits in her new venture. She installed stripper poles and hired former nude dancers to serve up sex along with coffee drinks. Workers were paid in tips, and she took her cut. She also kept a separate set of books to hide her profits — a strategy that had been part of the Colocurcio business model, too.

In addition to tipping off stand workers about undercover investigations, detectives found O’Neill’s electronic fingerprints on dozens of license-plate checks, including on vehicles used by undercover officers or driven by their spouses, and the cars used by baristas and their friends.

O’Neill later told investigators it all started because he was bored and, in his words, “stupid.” He struck up a friendship with Panico that over time grew into an infatuation and a type of intimacy.

When the arrests came in June 2013, however, O’Neill was on his own.

Panico and one of her managers reported trading sex for information from the deputy.

O’Neill at first repeatedly denied any inappropriate behavior. His story changed during a day of questioning, however, as he was confronted with phone records showing repeated calls with Panico and video of him, in uniform, in intimate embrace with coffee hut employees.

Both Panico and her former manager cut deals and agreed to testify for the prosecution.

On Monday Panico was given a first-time offender waiver. That spared her any time behind bars other than the two days she served in jail when the stands were raided in 2013. As part of her agreement to plead guilty to promoting prostitution and money laundering, the former Snohomish woman also gave up her bikini espresso stand business and abandoned her claim to $250,000 in cash seized by investigators. Sentencing for Panico’s former manager is set for next week.

On Thursday, defense attorney Mark Mestel told the judge he wasn’t excusing his client’s misbehavior, but he believed O’Neill shouldn’t be jailed when Panico largely avoided serving time behind bars.

Judge Judge was unmoved by that argument. Investigators talked with stand workers who reported how O’Neill had groped them, pulled aside their clothing and took other liberties. The young women said they didn’t object because it was understood the “dirty cop” who hung out around the stands at all hours was in tight with the boss, records show.

O’Neill exploited those women, the judge said.

“He used his position which he only was in because he was a police officer,” she said.

Scott North: 425-339-3431; north@heraldnet.com. Twitter: @snorthnews

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