When six FBI and IRS agents awoke her at 6:05 a.m. on a muggy Monday in August 2002, the Gold Coast madam didn’t bat an eye.
Rose Laws said she was just a little surprised she didn’t get advance warning — as she had before a 1988 Chicago police raid and during a 1975 federal investigation.
The 68-year-old brothel madam asked the agents for a few minutes to dress, bathe and take her daily medications, an FBI report shows. Coping with arthritis, an aching back and history of heart disease, she swigged bottled water to wash down countless pills.
Fifteen minutes later, one of Chicago’s storied blonds emerged, and began to unspool the secrets of her trade. Laws’ cooperation with authorities would make her a figure in the current prosecution of Chicago insurance executive Michael Segal, who is accused of misspending customer insurance premiums on personal luxuries including prostitutes. Segal says he ran his company properly and accuses prosecutors of raising salacious personal allegations to bolster their case.
Another co-defendant, real estate investor and former bookie Michael Giorango, is scheduled to be sentenced Friday.
From Laws’ 20th-floor condo at 405 N. Wabash Ave., the muscular riverfront skyline spilled into a crosshatched quilt of lights. Here, perched near the Sun-Times building, Laws ran a lucrative arm of the “Circuit,” an upscale prostitution ring that flourished in Chicago and 10 other U.S. cities between 1995 and 2002, federal court papers show.
The prostitutes, who charged $350 to $1,000 an hour, stayed in each city a week or two, in swank apartments maintained by madams such as Laws. The Circuit’s midtown Manhattan penthouse was a romper room of cocaine and Viagra, courtesans in slinky eveningwear and pay-for-sex pathos.
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Laws directed the agents to a desk in her living room, and they began leafing through her client telephone book, the list of prostitutes she used and her scheduling calendars. These were “the most complete records” law enforcement officials had ever seized from her, she remarked, according to the FBI report.
Laws’ client list — also seized by Chicago police in 1988 — has never been made public, but it reportedly has included powerful businessmen, lawyers and elected officials.
After pleading guilty last year to a racketeering charge stemming from the August 2002 federal raid, Laws is serving a 22-month sentence in the Oklahoma City federal prison. She declined to comment for this article, but has cooperated with federal authorities, who have convicted 13 Circuit defendants from five states.
Tight-lipped about past
Born in the Cumberland Mountains of central Tennessee, Laws has been close-mouthed about her own background, and how she got into her profession. In one 1989 FBI-monitored meeting, a mob crew underling greeted Laws by calling her “the famous Rosie.” “I don’t want to be famous,” Laws shot back. No photo of her could be found this week.
Handwritten numerals and figures were scrawled next to some of the names on Laws’ 2002 client list. “Laws was asked to explain the notations, but declined to do so,” an FBI report said.
Laws pointed out the shredder behind her living room couch, and agents filled a plastic bag with confetti.
In a black folder on her desk, she kept the Circuit “rules” she provided to incoming prostitutes.
Look fresh for every customer. Never exchange phone numbers with a client, or discuss one client with another. Drugs were forbidden.
Before taking on a “new girl,” Laws told the federal agents, she scheduled a meeting with the woman, usually at a restaurant. Arriving early, Laws would observe the woman without identifying herself. If the prospect was “up to Laws’ standards, Laws would call the woman and put her to work,” the FBI report said.
Agents found $4,000 in cash-stuffed envelopes in a side table.
Two business telephone lines ran to the desk in Laws’ living room — one for prostitutes “booking in” when they arrived from Los Angeles or Miami, the other for the discreet men who met them in tony apartments on North Dearborn Parkway and West Illinois Street.
Laws carefully selected the men, accepting only those who paid quickly, were not violent and would not compromise the Circuit operations. While the brothel madams shared prostitutes and clients, each ran her operation independently. They were “a bunch of ex-working girls who understood the business and what men demand: variety,” said New Orleans madam Jeannette Maier, who served six months in a federal halfway house for operating the Circuit’s Canal Street brothel. “It’s the people running our country who visited our house — mayors who did drugs and Republicans in pantyhose,” Maier said in an interview.
Now that the nationwide racket is busted, “the girls will probably go to more violent places to work,” said Pittsburgh madam Paula Cherish.
Well-connected clients
What sort of man paid for sex on the Circuit? Court records show they included well-connected business executives such as Giorango, a twice-convicted Chicago bookmaker who reinvented himself as a real estate investor who controlled Miami Beach hotels and more than a dozen Chicago properties. Giorango’s tenants at his 5533-39 N. Broadway office building include U.S. Rep. Jan Schakowsky (D-Ill.), state Sen. Carol Ronen (D-Chicago), state Rep. Harry Osterman (D-Chicago) and Ald. Mary Ann Smith (48th). (After learning about Giorango’s criminal background from a Tribune reporter last week, those four officials said they plan to move unless Giorango sells the building soon.)
Federal prosecutors alleged that Giorango promoted the Circuit operation of Miami madam Judy Krueger by encouraging her prostitutes to work from one of his Miami hotels and by using the women to entertain and entice his business associates. “There was a parasitic relationship between [Giorango] and Judy Krueger’s prostitution business,” federal prosecutors wrote in court papers.
Giorango declined to comment. In January, a federal jury in Miami convicted him of violating the Travel Act by using a telephone in interstate commerce to promote Krueger’s operation, according to a Justice Department press release and court records. He is scheduled for sentencing Friday.
Giorango laid bare his own sad love life and the Circuit’s operations during a 60-day period from January to March 2002, when he made more than two dozen calls to Krueger to secure prostitutes for his associates at the Lorraine Hotel in Miami Beach, where he was a part-owner.
“Send as many girls as you could because, I’ll tell you what, it’ll make me look good,” Giorango said in one call as he arranged a Super Bowl party for Chicago associates. That party was for some “really, really high-rollers.” One “guy, like, owns Lear jets, so he’s a big money guy.”
Working Giorango’s party that night was a 28-year-old who called herself Aloha — a slender woman with golden skin and long, ebony hair who reported to Laws in Chicago and Krueger in Miami.
“Nice-looking, really pretty girl,” Krueger remarked on an FBI-wiretapped phone conversation with Giorango.
Her FBI-wiretapped phone conversations hint at the casual exploitation of the high-end sex-for-hire racket.
“Although we call it a victimless crime, some of these girls had very sad histories,” said Miami Assistant U.S. Atty. Richard Daniel Gregorie.
Stumbling back to Giorango’s Super Bowl party from an upstairs hotel room after an assignation with a man she knew as “Freddie from Chicago,” Aloha made a cell phone call to Krueger.
“I have, OK, I have, I have a question to ask you,” Aloha began. “When I, I went upstairs with a guy, who is supposed to pay me? . . . This guy Freddie, he gave me, like 50 bucks. . . . I didn’t, like, wanna make a big deal out of it.”
Just then, Aloha fell and smashed a glass she was carrying, cutting her arm.
“I like, broke the glass, and then I think I got a piece of glass in my arm,” she told Krueger.
Over the phone, the 58-year-old Miami madam took charge. “See if you can get it out. Can you get it out?”
Aloha extracted the glass.
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Krueger instructed her to approach Giorango and ask him who was paying for her. Aloha was reluctant.
“Can you ask him? I, um, I just don’t . . . “
A moment later, Aloha handed the cell phone to Giorango.
“Should I just give her four dollars [$400] and tell her to leave?” Giorango asked Krueger.
“Why don’t you do that and that way she can go do something else,” the Miami madam said.
Family business
As federal agents questioned her that August morning in 2002, Laws asked if they also planned to arrest her 46-year-old daughter, Linda Laws, who helped run the Chicago business.
Linda Laws had already been picked up, the agents said.
Rose Laws “became distraught” about the welfare of her 6-year-old grandson, according to the FBI report.
The agents abruptly ended the interview, and drove Laws to the federal building at 219 S. Dearborn St., where she was fingerprinted and photographed. Allowed to make a phone call, Laws spoke for 15 minutes with one of her sons, an FBI report says.
Agents offered her food, but she accepted only two bottles of water.
Nearly three hours after the knock on her door, at 8:50 a.m., the Gold Coast madam was remanded to the custody of U.S. marshals.
She began what federal authorities called “full and complete disclosure” of Circuit operations. Laws encouraged her children to cooperate and was forthright in identifying forfeitable assets, court records show.
And, prosecutors wrote in court papers, the Gold Coast madam is cooperating in “unrelated and ongoing investigations in the Northern District of Illinois.”