Fleiss Sentenced to 37 Months for Tax Evasion

A disheveled and tearful Heidi Fleiss, the “Hollywood Madam” who supplied call girls to some of the world’s richest men, was sentenced Tuesday to 37 months in prison for tax evasion and money laundering, bringing a quiet end to one of the more lurid chapters in recent Los Angeles history.

The once-defiant Fleiss closed her eyes in relief as U.S. District Judge Consuelo B. Marshall imposed a prison term far below the maximum suggested by federal sentencing guidelines. As interpreted by Marshall, Fleiss’ crimes should have brought 78 to 97 months.

But Marshall, calling the Fleiss case “atypical,” said that even the minimum sentence would have been far too harsh. Among other things, the judge cited testimony from an expert witness who had testified that the guidelines for money laundering had been drafted with mobsters and cocaine cartels--not madams--in mind.

Moreover, the judge said, Fleiss had already suffered the unusual duress of undergoing simultaneous state and federal trials.

And, in a rare political statement, Marshall said that to some extent, Fleiss had been a victim of gender-based discrimination because the prosecution of prostitution offenses so rarely extends to the male customers involved.

Now 31 and recovering from an addiction to crystal methamphetamine, the Heidi Fleiss who stood before the judge was a far cry from the party girl who had mugged behind her sunglasses for the paparazzi when she first appeared in court 3 1/2 years ago.

Her eyes raw, her face bereft of makeup, she was taken from the courthouse in a blue, prison-issue work shirt and pants that were too big--the wardrobe of choice at the federal Metropolitan Detention Center downtown, where she chose to remain after her release from court-ordered drug treatment last month.

Her demeanor had changed, too. Once so full of wisecracks that she would joke about bringing an entourage of call girls to court “in hats that said ‘Heidi-Ho,’ ” Fleiss--who now markets a line of sportswear from a Santa Monica boutique--wept throughout much of the two-day sentencing hearing.

In brief remarks to the judge, she struggled to express her regret in a voice that was choked with tears.

“I wish. I knew words. To tell you how sorry. I am,” Fleiss sobbed, barely able to complete a sentence. “I’m a different person now. I was young. I made terrible choices. Mistakes I wish I’d never made.”

But Marshall told her at the end of the trial that “when you are released from custody, hopefully you’ll do many of the things you’ve dreamed about. I believe you’ll be a positive role model for other young women just by the experiences you’ve had.”

The punishment--which includes three years of supervised release, 300 hours of community service, mandatory attendance at a substance abuse program and a $400 fine--addressed only Fleiss’ conviction on federal charges of tax evasion, conspiracy and money laundering. It did not deal with pandering charges on which she is scheduled to be retried in Los Angeles Superior Court.

However, after a prolonged legal battle, Fleiss said she is ready to end her standoff with state authorities.

Her attorney, Anthony Brooklier, said there is a “high likelihood” that she will agree next week to a plea bargain in the state case, a move toward which county prosecutors have been open, but that Fleiss has resisted for years. Such an agreement would allow the district attorney to avoid the expense of retrying a high-profile Superior Court conviction that ended up being thrown out last year on appeal. The deal would also let Fleiss serve her state and federal sentences concurrently.

Brooklier said that with credit for time served at a locked drug treatment facility--where, over two visits, Fleiss spent about five months--she could qualify for a federal “boot camp” in Texas. (“Think Goldie Hawn in ‘Private Benjamin,’ ” Brooklier joked.)

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Once there, after several months of hard work and rehabilitation, Fleiss could be moved to a community correctional facility and possibly even spend the final part of her sentence in home detention, authorities said.

Fleiss’ family credited the judge for displaying leniency. Even the prosecutor, Assistant U.S. Atty. Alejandro Mayorkas, had argued that Fleiss should not receive the full measure of punishment.

Mayorkas noted, however, that Fleiss had waited until the bitter end of her trial to acknowledge that she had done anything wrong. And even then, the prosecutor said, Fleiss’ letters to the court blamed, not her own bad judgment, but her abusive relationship with her then-boyfriend, sometime director and convicted bookmaker Ivan Nagy, for her decision to start a prostitution ring.

Fleiss’ arrest in 1993 in an elaborate vice sting sounded the opening volley in what was to become a seeming endless cavalcade of scandal in Hollywood. By the time her federal case ground to its end this week, the accusations against her seemed penny-ante compared to those against such celebrity defendants as O.J. Simpson.

But at the time, the Fleiss matter sent shock waves through the studio corridors and power-breakfast nooks of Hollywood because her clients were rumored to include some of the industry’s biggest names. Within weeks of her arrest, producers were scrambling to keep their names out of print and her mentor-turned-rival, Elizabeth “Madam Alex” Adams, was chortling in glee.

Court documents and statements from her psychologist during this week’s sentencing hearing traced Fleiss’ destiny to her character: The daughter of a popular Los Feliz pediatrician, Fleiss had grown up in an affluent and loving family. But an attention deficit disorder impaired her education and her confidence, and her impetuous nature made matters worse.

Nancy Kaser-Boyd, Fleiss’ therapist for the past year, testified Tuesday that Fleiss’ wild streak worsened after she turned 18, when her parents’ marriage fell apart and her younger sister was disabled in a car accident with Fleiss at the wheel.

The therapist primarily blamed Fleiss’ quest for love for her subsequent involvement with much older boyfriends who hurt and exploited her. The therapist echoed Fleiss’ contention that it was one of those boyfriends, Nagy, who introduced her to Madam Alex and urged her to become a madam herself.

Prosecutor Mayorkas disputed that analysis, and castigated Fleiss for depicting herself as a helpless puppet of unscrupulous men. Fleiss, he said, squandered her opportunities with “unfortunate life choices.”

Although Fleiss’ customers--who included such marquee names as actor Charlie Sheen, Australian mogul Kerry Packard and “Top Gun” producer Don Simpson--were well known, none of them were ever prosecuted. That fact, and Fleiss’ own lightheartedness at the nature of her crimes, rekindled the timeworn debate over whether prostitution should be considered a crime.

That public ambivalence carried over into the state case against her, when jurors who had initially found her guilty in Superior Court of felony pandering recanted after they learned that the conviction carried a mandatory prison term.

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In May, those jurors’ admissions that they had traded votes to avoid a deadlock prompted a state appeals court judge to throw out the state court conviction and order that her case be retried.

Less sensational was the federal court case against Fleiss, where the morality of pandering was less important than the bottom line of Fleiss’ income tax return.

Specifically, the government asserted that the madam avoided taxes on hundreds of thousands of dollars of ill-gotten gains by funneling her cash into relatives’ savings accounts and into a Benedict Canyon house that had been bought in the name of her father, Dr. Paul Fleiss.

The doctor eventually pleaded guilty to a single count of conspiracy, and to making false statements on loan documents for the $1.6-million house. He was sentenced last year to three years probation, 625 hours of community service and a $50,000 fine.

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Heidi Fleiss Chronology

Key events in the case of Hollywood madam Heidi Fleiss.

June 9, 1993: Fleiss is taken into custody on felony pimping, pandering and narcotics charges at her Benedict Canyon mansion after four of her employees are picked up in a vice sting.

June-August, 1993: Rumors swirl in Hollywood about a so-called black book linking the rich and famous to Fleiss operations.

July 28, 1994: Fleiss and her father, Dr. Paul Fleiss, are indicted by a federal grand jury on charges of depositing checks for prostitution services into the pediatrician’s bank account and lying about income on tax returns.

Dec. 2, 1994: Fleiss is convicted on three counts of pandering. Jury deadlocks on two other counts and finds her not guilty on one count of supplying cocaine to an undercover police officer.

May 25, 1995: Calling Fleiss’ call-girl ring a “highly sophisticated and lucrative criminal enterprise,” judge sentences her to three years in prison on the pandering conviction and fines her $1,500. The verdicts are later overturned by an appeals panel on a finding of juror misconduct and a new trial is ordered.

Aug. 11, 1995: Fleiss is convicted of conspiracy, tax evasion and money laundering in federal case.

Sept. 19, 1995: Paul Fleiss is sentenced to three years probation for conspiring to hide the profits from daughter Heidi’s call-girl ring.

Jan. 8, 1997: After telling a federal judge in a letter at her sentending hearing that she was “young and stupid and . . . wrong” when she launched her high-priced call-girl ring, x Fleiss is sentenced to 37 months in federal custody.

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(Valley Edition, B6) Heidi Fleiss Chronology

Here are some key events in the arrest and prosecution of Hollywood madam Heidi Fleiss.

1992

December: Onetime Beverly Hills madam Elizabeth “Alex” Adams accuses a rival--unnamed in press accounts--of stealing her wealthy clientele and masterminding the theft of a cache of jewels. Others are eventually convicted of stealing the jewels, but the notoriety prompts a months-long investigation by police of Fleiss, the long-rumored heiress to Adams’ call-girl ring.

1993

January-June: Police prepare a sting operation involving Beverly Hills police, the FBI and Los Angeles vice officers. It includes a Beverly Hills detective posing as a Ferrari-driving Hawaiian businessman seeking drugs and sex.

June 9: Fleiss is taken into custody on felony pimping, pandering and narcotics charges at her Benedict Canyon mansion after four of her employees are picked up in the vice sting.

June-August: Rumors swirl in Hollywood about a so-called black book linking the rich and famous to Fleiss’ operation.

Aug. 9: Fleiss pleads not guilty to felony pandering and cocaine possession charges, while remaining free on $100,000 bail.

1994

July 15: Fleiss opens Heidi Wear clothing boutique.

July 28: Fleiss and her father, Dr. Paul Fleiss, are indicted by a federal grand jury on 14-count charges of depositing checks for prostitution services into the pediatrician’s bank account and lying about income on tax returns.

Nov. 14: Pandering trial begins.

Dec. 2: Fleiss is convicted on three counts of pandering. The jury deadlocks on the other two counts and finds her not guilty on one count of supplying cocaine to an undercover police officer.

Dec. 13: Fleiss’ attorneys file a motion asking for a new trial, two days after five jurors sign sworn statements saying they improperly discussed the case outside court.

1995

May 25: Calling Fleiss’ call-girl ring a “highly sophisticated and lucrative criminal enterprise,” judge sentences her to three years in prison on the pandering conviction and fines her $1,500.

June 30: Tax evasion trial begins in federal court.

Aug. 11: Fleiss is convicted of conspiracy, tax evasion and money laundering in federal case.

Sept. 19: Paul Fleiss is sentenced to three years probation for conspiring to hide the profits from daughter Heidi’s call-girl ring. He is fined $50,000, ordered to serve 625 hours of community service and sentenced to one day in prison--a punishment offset by credit for the day federal authorities booked and processed him.

1996

May 30: Citing juror misconduct, a state appeals court panel overturns Heidi Fleiss’ 1994 pandering conviction and orders a new trial.

1997

Jan. 7: At sentencing hearing on the federal conviction, Fleiss tells the judge in a letter that she was “young and stupid and . . . wrong” when she launched her high-priced call-girl ring, adding that “I will be paying for the crimes I have committed for the rest of my life.”

Jan. 8: Fleiss is sentenced to 37 months in federal custody.

Compiled by CECELIA RASMUSSEN AND LES DUNSEITH / Los Angeles Times