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The kingpin behind the latest corruption scandal to roil the New York Police Department is a former detective who allegedly used his Vice Squad know-how and friendships with active officers to run a prostitution and gambling ring in which cops were paid in cash and sex for protection and tips.
In announcing charges on Thursday, prosecutors said that accused cop-turned-criminal Ludwig Paz, 51, knew from his training that undercover detectives were not allowed to expose their genitals during interactions with prostitutes during investigations.
So Paz devised a detailed screening process that required new brothel clients to undress and allow themselves to be fondled, proving they weren’t law enforcement, authorities said.
Paz allegedly relied on his contacts within the NYPD, enlisting the help of at least seven officers who helped with daily duties that included providing protection and confidential police information that would help him avoid raids.
“Am I angry? Of course I am angry,” said Police Commissioner James O’Neill said Thursday, noting that the scandal was not department wide problem but instead the work of a small group that “tarnished” the good work of tens of thousands of others in the department.
The arrests come as the department has been working more aggressive over the past several years to route out bad officers in the department.
“I think, especially over the last four-and-a-half years, we have done a lot to build up trust all over the city,” O'Neill said. “By taking this step and being transparent and acknowledging that there are people out there that wear shields and do break the laws, there are consequences, there are severe consequences for everyone involved in this case.”
The latest scandal is most significant since a gun-licensing scandal in which several officers, including some in top jobs, were charged with federal corruption for trading handgun licenses for cash, prostitutes, and expensive trips. If that case was reached the upper echelons of police and society, this one was on the opposite, a seedy underbelly that harks back to a time not all that different from one portrayed by David Simon in the HBO series “The Deuce.”
The investigation, which was dubbed Operation Zap, began after a tip in April 2015 to the Internal Affairs Bureau command center at NYPD headquarters in downtown Manhattan from a uniformed police officer who reported that “someone who may be involved in illegal activities was having conversations with someone in the vice enforcement division.”
That someone turned out to be Paz.
Det. Paz joined the department in October 1990 and assigned to a precinct in Brooklyn. In 2001, he was transferred to the vice unit. He was promoted to detective in 2002 and retired in October 2010, almost 20 years to the day after he started, the minimum number of years required to leave the police force and collect a full pension. He retired from the NYPD in “good standing.”
“Up until this investigation started, it is unknown what Paz did as far as employment is concerned, but is now obvious that he was involved in illegal gambling and promoting prostitution,” said Joseph Reznick, the head of the NYPD’s Internal Affairs Bureau.
The investigation, which officials said began immediately, involved hundreds of hours of police work, undercover investigators, physical surveillance and court-ordered electronic surveillance, the same wire taps that are used in to investigate organized crimes cases, to determine the structure and scope of Paz’s operation, authorities said. “It was only because we were up on so many phones that we were able to get the full scope of the corruption,” said Queens Assistant District Attorney Gerard Brave, the head of organized crime and rackets bureau.
Paz controlled a ring of brothels in Queens, Brooklyn and Long Island, authorities said. Working with his wife, Arelis Peralta, he also set up a number of gambling rooms in businesses, including beauty salons, in Queens and Brooklyn, they said.
Several people who work near one alleged brothel in Brooklyn said they had seen suspicious activity for about five years.
A local craftsman who works within view of the building told The Daily Beast that he reported suspicious activity to a women's organization about 5 years ago, which then reported it to a human trafficking honcho at the NYPD.
“There was a constant stream of guys that would come by, on their cells,” said the man, who didn't want his name used due to safety concerns. “They'd go in and come out 20 minutes later.”
The man said there are lots of police in the area, so “heres no way they didn't know. The activity was mostly during lunchtime and appeared to serve men who worked in the neighborhood, he said.
Another man who works within view of the alleged brothel also said prostitution wasn't kept secret. “It was a known thing,” he said. “You'd see scantily dressed women show up at the same time,” explaining how men who appeared to be johns would also routinely show up to the building.
The probe revealed that the prostitution ring collected more than $2 million between August 2016 and September 2017 and that the brothels used online ads to attract customers, who paid $40 for 15 minutes to $160 for a full hour of sex.
It culminated Wednesday when Paz, the seven officers and roughly three dozen people outside the NYPD were charged Wednesday as part of the operation. Two other officers who face departmental charges have been stripped of their badges and guns and placed on desk duty and police believe there may be others involved who face internal charges.
Paz became friends with the other defendants while he was a cop and personally knew each one of the officers who has been charged or disciplined, officials said.
“If a book was ever written about this case,” Reznick said, “I would probably name it 'Loyalty or Disloyalty Versus Friendship,' because that’s what it came down to, friendship with a retired member of the service, maintaining the friendship with active members of the service.”
Those who allegedly helping Paz include Brooklyn South Vice Det. Rene Samaniego, 43, who is accused of helping the retired detective in both the prostitution and the gambling rings; Sgt. Carlos Cruz, 41, and Detective Giovanny Rojas Acosta, 40, who are accused of giving Paz information on law enforcement activities related to prostitution. The three are all charged with enterprise corruption.
Additionally, Sgt. Cliff Nieves, 37, and his brother Sgt. Steven Nieves, 32, were charged with promoting prostitution after they allegedly operated a brothel for a one-night bachelor party Police Officer Giancarlo Raspanti has been charged with giving Paz confidential police information in exchange for discounted sex at a brothel, while Police Officer Louis Failla is accused of helping Paz after a brothel was raided.
In all, six indictments were unsealed Thursday in Queens Supreme Court with charges that include promoting prostitution, promoting gambling, hindering prosecution receiving reward for official misconduct
Samaniego, Cruz, Acosta were charged as accessories to the those who ran the prostitution enterprise because they provided protection by sharing confidential information about ongoing investigations into the prostitution ring. Samaniego was also charged as an accessory in gambling indictment, said .
Officer Raspanti was charged with official as part of the operation, is accused of providing information to Paz from NYPD computers in return for “discounted sex” at a brothel. Officer Louis Failla with official misconduct for giving Paz information about a raid in Brooklyn.
Reznick said the officers provided information on active and ongoing investigations, misused department computers by conducting unauthorized inquiries on people and locations, and provided information including the photo of an informant.
They had sex in the brothels on and off duty, he said. One member accepted cash payment for information. One member had discussions to set up his own prostitution operation and gambling business after he retired.
Reznick said the there are other current police officers that the department is interested in as well as a few retired ones, but unless there is a new development or information about new officers, he does not expect there to be any more arrests of NYPD officers, only internal discipline.
As part of the investigation, Reznick said authorities worked to determine if any of the prostitutes were the victims of sex trafficking and determined “all of them appeared to have volunteered for that type of work.”