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High Tech Hookers

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South Bay law enforcement gave itself a mission: to save the good citizens of Silicon Valley from the ravages of high-class San Francisco call girls. But why didn't they bust more of the men?

By Will Harper

RAESHEL KEAVY DIDN'T need a college degree to know how to run an escort service. The former call girl's formula for success was simple: Offer a high-quality product and let lonely guys with disposable cash and high credit limits come calling to get a taste of the girls they could never have in high school.

According to former Keavy employees, the young madam boasted an impressive client list of 15,000 names that included corporate executives, engineers, professional athletes, movie stars and television personalities.

For an hourly fee ranging from $275 to $350, Keavy's regulars came to expect furtive rendezvous with "models" reputed to resemble Hollywood nymphs like Morgan Fairchild, Dana Delany, Elizabeth Hurley, Bridget Fonda and Winona Ryder.

And the 32-year-old madam expected her girls to have the air of an Oscar-night princess, not an MTV-award fashion victim. For the prices she charged, Keavy didn't want the approximately 100 employees of her three intertwined San Francisco-based businesses--Business Class Escorts, the Platinum Club Premier Model Agency and the Men's Club--looking cheap.

"Renee," as her employees knew her, demanded that the escorts dress businesslike and classy. She wanted her ladies to wear nylons, but not fishnets. Jeans were out, but a tasteful pantsuit was OK. Nose-rings and visible tattoos were definitely prohibited.

On the night of June 3, however, a new escort named Angel didn't obey the company's librarian-look dress code. Keavy's lieutenant, Mark Dudgeon, would later express dismay about how Angel arrived at San Francisco's elegant Pan Pacific Hotel "looking extremely inappropriate" and "made up."

The escort caught the attention of hotel security, which detained her as she was leaving the building after meeting with her new boss in a suite on the 10th floor.

As Keavy did every Wednesday evening, this night she was meeting the escorts for the weekly money reconciliation everyone called "the drop." Models brought the credit card receipts and cash they collected during the previous week and Keavy cut them each a check.

At the previous week's drop, Keavy pocketed an estimated $30,000 in cash and credit card slips, a figure that if spread over the entire year put her gross receipts in the $1.6 million range.

The site of the drop rotated each week among some of San Francisco's better hotels: the Westin St. Francis, Holiday Inn of Chinatown, Holiday Inn on Van Ness, and the Pan Pacific.

When security nabbed the conspicuous Angel, it was actually something of a blessing in disguise for Keavy, albeit a blessing in a discount-store disguise.

The commotion caught the attention of a hotel valet who quickly and discreetly tipped off the madam--who, after years of coming to the hotel, was well known to the valets and doormen--that there were a bunch of cops in the alcove.

Keavy quickly dispatched her right-hand man, Dudgeon, to go to the office and get the number of an attorney.

Within a few minutes of the valet's warning, a knock came at the door of Room 1002 at half-past eleven. One of the escorts went to answer. "San Jose Police," barked one officer in a blue raid jacket, "we have a search warrant."

Raeshel Keavy
The Madam: Raeshel Keavy

AS THE POLICE FILED IN, Keavy, according to one account, reached forward to get her laptop computer, which held all the previous week's financial data. An officer quickly grabbed it away from her.

A witness recalls Keavy standing up and demanding, "Would someone tell me what is going on here?"

Keavy spotted a new escort of hers named Deanne coming in with police and assured her everything was going to be fine. Earlier in the night, Keavy had been worried sick that her new employee had encountered harm whenshe didn't answer repeated pages at the end of a trick.

Only later, when she saw "Deanne" writing a police report, did Keavy realize she had been consoling an undercover cop.

The police separated the eight to 10 people in the room and soon discovered they hadn't brought along enough handcuffs. "We had not anticipated having that many people in the room," San Jose vice cop Ken Willey would later acknowledge.

Dudgeon, meanwhile, never made it back to the office as the madam had hoped. Police stopped him a few blocks from the hotel trying to make a getaway with an escort in her 1997 Honda Prelude.

Had he made it back to the Business Class office, he would have found its door busted open by San Jose cops. Before they barged in, one of the company's "bookers"--people who answered the phones and scheduled dates for the escorts--jumped from the office's second-story window and ran off, but in her haste she left behind her driver's license.

An officer spent the next two hours answering the phones (which were ringing nonstop), pretending to be a booker.

Many of the callers were surprisingly indiscreet.

A guy named Jim phoned from the Cabana Hotel and said he wanted someone "extremely relaxed and extremely liberal, if you know what I mean." For good measure, he added that he "liked to kiss" but "didn't like to use a rubber." Sahil called and declared, "I want sex." Marvin wanted to "get laid." David reluctantly disclosed that he preferred "general services with a condom."

Back at the Pan Pacific, shortly after midnight three officers brought Madam Keavy down to a business office on the fifth floor so they could interrogate her privately.

They began with a few minutes of chitchat about Keavy's remodeling of her San Mateo condo. (In fact, the remodeling surprised the police, who had a warrant to search Keavy's home. The cops were forced to make a late-night call to the judge, who drowsily authorized them to search Keavy's hotel room at the nearby Marriott where she was staying while her condo got a face lift.)

Then the cops got down to business.

Detective Willey asked her if she knew her employees were engaging in acts of prostitution with their clients. At first, Keavy denied knowing anything. Then she backpedaled slightly, allowing that she couldn't control "what adults negotiate with each other behind closed doors."

The young madam wondered aloud whether the cops were suckering her into talking. She kept asking: Is that a real search warrant?

Indeed it was.

By the end of the night, the cops had seized computers which included Keavy's prodigious client data base, booking logs, financial records and $19,000 in credit card receipts and $170,000 in cash.

BY ANY METROPOLITAN police department's standards, the Business Class bust was a big one--definitely a headline-grabber. The bust was a top story for several local newscasts the next day.

News accounts told the sexy basics: Following a five-month investigation, San Jose police exposed what they called a "large and sophisticated" million-dollar-a-year prostitution ring infiltrating Silicon Valley and the whole Bay Area. The two alleged ringleaders--Keavy and Dudgeon--were arrested and booked on suspicion of pimping and pandering.

Still, one basic question remained: Why were San Jose taxpayers footing the bill to investigate what was ostensibly a San Francisco escort service?

San Jose detectives, hot on the trail of the hookers up north, had spent hundreds of hours outside city limits over the past few months building a case against Keavy, the Bay Area version of Heidi Fleiss.

They performed days of round-the-clock surveillance of the madam's comings and goings, tailing her silver four-door 1998 BMW and keeping an eye on her San Mateo home; they posed as clients from San Jose and would follow escorts home as far away as Hunters Point and Fremont; they would watch the hotel lobbies on drop night for attractive young women who went inside alone and then reappeared 15 to 25 minutes later; two female officers went undercover and applied for jobs with the escort service and traveled to the city for interviews and orientation.

At the time of the bust, San Jose justified its lengthy investigation by saying that the San Francisco madam was recruiting escorts from San Jose and trying to expand the business into wealthy Silicon Valley.

Lt. Jack Farmer, one of the San Jose cops present during the June raid of the Pan Pacific, observed in a recent interview that many escort operations in the Bay Area don't serve just one city, but try to cater to the entire region. So even though Business Class was based in San Francisco, it sent prostitutes all over the Bay Area, including San Jose, he said.

"We do a whole lot of investigations of things in town," Farmer explained, "but a lot of [Keavy's] escorts were coming down here. ... I would think the taxpayers would want us to look into these kinds of cases."

Asked to estimate what percentage of Keavy's business came from San Jose, Farmer would only say that it was "significant."

short picture description
The Mister: Mark Dudgeon

MADAM KEAVY posted $30,000 bail the same day police booked her into Santa Clara County's main jail. She returned to a much different world than the one she had known just the day before.

The police had confiscated $170,000 in cash from her (much of it kept in envelopes stashed inside a Louis Vuitton travel bag), and the phones that once rang off the hook inside the business office at 1524 California St. had been disconnected. Within a week, authorities froze her bank accounts.

Certainly, Keavy knew the risks when she bought Business Class and its gay counterpart, the Men's Club, four years ago.

Before she became the owner, Keavy began as a call girl for what was then known as J.B. Phillips Escorts. She soon graduated to working in the office as a booker.

Bookers didn't make nearly as much money as an escort, but it was safer, easier work. A former booker recently told her probation officer that she made between $2,000 and $3,000 every other week.

At the time Keavy decided to buy the business, it was owned by Steven Muro, known to everyone as "Vincent." Vincent once bragged that he was "the Heidi Fleiss of the Bay Area."

That moniker, however, much better suited Vincent's successor.

Like Fleiss, Keavy defied the Hollywood stereotype of the madam as a past-her-prime, overweight matriarch in a bustier. She was a young (29 at the time), slender, attractive brunette.

She may not have been stereotypical, but she did have something of a maternal relationship with some of her employees. Keavy discouraged her escorts from using drugs and even put one of them through rehab. Keavy was a bridesmaid at one of their weddings and referred to her companies as "our loving, dysfunctional, politically incorrect little family."

A few of the escorts later brought to testify in court generally had good things to say about their former boss. "She was a great business person and she really cared about the girls," an escort who worked under the name Terry testified four months after Keavy's initial arrest.

That's not to say everyone always loved the boss. Former employees recall "Renee" being something of a control freak, not above giving preferential treatment to the younger escorts who were in high demand.

But if Keavy prized anything more than young, hot babes it was discretion. The babes made Keavy's businesses a success; discretion allowed them to be a continuing success.

BUSINESS CLASS and its offshoots practiced a "don't ask, don't tell" policy regarding sex. Escorts were hired by the company as independent contractors, and Keavy didn't want to hear specifics about what they did during their paid time with a client. In Keavy's mind she was only responsible for the front end of the transaction--the client referral. (The company made its money by charging an $85 to $100 referral fee for each date.)

Neither Keavy nor her second-in-command, Mark Dudgeon, ever used the dreaded three-letter word "sex," and they never directly instructed escorts that making the beast with two backs was part of their duties.

She and her employees occasionally used code words to disguise the subject of their conversations: party hat (condom), party favors (drugs), speak Greek or go to Greece (anal sex), speak French (oral sex), Jenny (the police).

Keavy's cautiousness, however, went beyond the industry-common use of code words and maintaining plausible deniability.

Whereas Heidi Fleiss ultimately fell prey to the IRS, Keavy tried to be a model taxpaying citizen. She filed her income taxes using the innocent-sounding business name on her corporate credit account, "Corporate Event Services." She issued 1099 tax forms to the escorts at the end of the year from CES. (Authorities say that pure cash transactions often didn't get reported to the IRS, though.)

But Keavy didn't always follow her own rules championing discreet behavior.

In an uncharacteristically brazen move, she wrote a letter on Corporate Event Services stationery petitioning the Santa Clara County Probation Department to furlough a former employee. The Probation Department granted her wish, and the woman returned to Business Class' "loving, politically incorrect family" under the auspices of the county's work-furlough program as an event planner.

Business Class also ran half-page ads in Yellow Pages throughout the Bay Area: San Francisco, Alameda County, San Mateo County and northern cities in Santa Clara County like Palo Alto and Los Altos.

A former agency booker confided to her probation officer that Keavy made it seem like she was "untouchable" as long as she paid her taxes and didn't get involved in anything more serious like drug trafficking.

And in a way she had good reason to feel secure.

Although Business Class sent escorts all over the Bay Area, the company was based in liberal San Francisco. District Attorney Terence Hallinan once declared on national television that prosecuting prostitution cases was a low priority. Furthermore, San Francisco juries didn't often hand down guilty verdicts for women toiling in the world's oldest profession.

San Jose, she knew, was a different story. The South Bay's population was more socially conservative, as befits an area of suburban communities known as good places to raise families. The aggressive reputation of San Jose vice cops also gave her pause.

She deliberately avoided placing ads in the San Jose Yellow Pages so as not to catch the attention of the city's police force, which in 1995 made a well-publicized bust of another Bay Area escort agency.

And for the first three years she owned Business Class, Keavy managed to avoid arousing the interest of San Jose vice. Lt. Jack Farmer recalls that his squad became wise to Keavy's operation early last year when an informant tipped them off.

Farmer says that the inquiry was "coordinated" with the San Francisco Police Department, though a law enforcement source familiar with the case insists that SFPD's role was "minimal." No other South Bay law enforcement agencies helped out because San Jose didn't ask for their assistance. "We [San Jose officers] were the ones with a majority of the concern," Farmer explains.

On June 7, three days after her arrest, Keavy realized she definitely was "touchable," in spite of all her precautions.

She found herself without a business, without her livelihood. So she sought the easy refuge of time immemorial: She got liquored up.

In fact, Keavy got so tanked she ended spending another night in the pokey--this time in San Mateo. If being charged with pimping wasn't bad enough, now she was facing three other charges: public drunkenness, resisting arrest and vandalism.

Devon Rexman Porn-Star Witness: Mark Dudgeon, seen in an earlier incarnation as actor Devon Rexman, served as the leading witness for the prosecution in the case against co-worker Raeshel Keavy.

MARK DUDGEON couldn't believe what he was hearing. With more than 10 years of prison time hanging over their heads, Madam Keavy floated the wild idea of starting up business again as they sat in the office of Dudgeon's Menlo Park lawyer, Evan Prieston.

"The reaction was, at least on my part," Dudgeon recalls, "one of disbelief and later confirmed by others [in the room] that it seemed a pretty absurd and dangerous idea."

Everyone in the room quickly shot down Keavy's suggestion.

(Dudgeon declined to comment for this story. His observations and quotes are taken from his grand jury testimony.)

Dudgeon didn't have any major criminal history to speak of, at least nothing authorities found worth mentioning. He did nonetheless have a sordid past, which police accidentally discovered during the June bust.

Among the other evidence they seized that night, officers stumbled across hardcore X-rated videotapes with a familiar face on the covers.

Suspect Mark Dudgeon had another identity, the cops learned: gay porn star Devon Rexman.

Actually, calling Devon Rexman a porn star is generous. Though the handsome 41-year-old blonde has more than a passing resemblance to pop-music star Sting, Rexman toiled mostly in the gay porn bondage subculture.

When contacted by Metro, even porn-industry veterans had no idea who Rexman was without consulting their computer database.

Mike Youens, the promotions director for Falcon Studios--considered the Cadillac of gay video producers--does remember Rexman from a couple of productions he made three to four years ago for Falcon.

"He was always into that tie-me-up, bondage thing," Youens recalls.

Rexman has appeared in at least a dozen romantic classics such as Midnight Run, Puppy Dog Tales, The Abduction Series, Bodybuilder Bondage Wrestling 3, Muddy Pig Sex and Truckers Pig Stop, a complex Freudian saga where our hero is forced to lick a public toilet bowl clean by a dildo-wielding redneck wearing a wife-beater undershirt.

Despite his movie exploits, Dudgeon kept his day job.

His entry into the escort business--where he also used the alias of Devon--was initially as a solo act, placing ads in the Bay Area Reporter, a gay newspaper. Devon's first paid date, he told undercover officer Connie Solma, was with a physically disabled man. At first the situation felt awkward, but as the hour went on he grew more comfortable.

In the spring of 1994, Dudgeon decided to "model" for Steven Muro's agency, the one which also employed Raeshel Keavy as an escort.

Ultimately, he, like Keavy, graduated to becoming a booker, though he still occasionally went out on calls. But it wasn't until company higher-ups Daniel Love and his wife, Rachel, left the company for New York in mid-1997 that Devon became second-in-charge under Keavy.

When the big bust happened in June, police and the press initially portrayed Dudgeon as Keavy's co-conspirator. In truth, however, he was little more than a glorified office manager, who oversaw the gay branch of the escort service in the Keavy empire, the Men's Club, interviewed applicants and made hiring recommendations to Renee.

If an escort applicant asked him if the job duties included sex, Dudgeon testified to the grand jury that he would say no while literally nodding his head yes.

Even if he wasn't the mastermind behind the operation, Dudgeon was still looking at felony counts of pimping and pandering with mandatory state prison time.

Two weeks after the strange meeting in his lawyer's office where Keavy reportedly raised the idea of starting business again, Dudgeon met with San Jose police.

He was about to become a porn-star witness for the prosecution.

LOCAL LAW ENFORCEMENT officials showed no mercy when they served up the next round of arrest warrants in late August. Once again they picked up Keavy (though not star witness Mark Dudgeon) and set her bail at $3 million. Her court-appointed attorney, Edward Sousa, later pointed out that even confessed serial killer Wayne Ford--the man who walked into the Eureka Police Department with a severed breast of one of his victims--was held on $1 million bail after he was arrested and charged with killing four people.

Six other women bookers were also arrested, all brought in on $250,000 warrants.

Even people who had left the business more than a year before--for instance, "Nicolette" was working as a nanny in the Los Angeles area--were sought out. Others were brought in for breaking the law as far back as 1995.

In the two-and-a-half months leading up to the second round of arrests, San Jose police had continued investigating the case, going through all the evidence they seized, interviewing Keavy employees and breaking into encrypted software programs.

"She [Keavy] was very secretive," San Jose police Lt. Jack Farmer says. "She took steps to insulate herself from having what she did found out. That's why it took six to seven months to investigate."

The prosecutor for the case was Deputy District Attorney Chuck Gillingham Jr., the son of the former sheriff and a one-time offensive lineman for Stanford's football team.

Gillingham is something of a friendly galoot, an amiable big-boy whom defense attorneys grudgingly admit they can't help but like outside the courtroom. Still, defense lawyers couldn't understand why SJPD and the Santa Clara County district attorney were prosecuting this case so aggressively.

"Why they [the San Jose vice squad] would want to spend all the time and money to go after something that was really not a San Jose situation isn't clear," says San Francisco defense lawyer Pamela Herzig, who represented one of the bookers.

"Everybody was wondering if this was something political," says Andy Tursi, an attorney representing Nicolette. "There were thousands of pages of discovery; the amount of money they spent on this is unbelievable. ... I asked the DA [Gillingham], 'Are you out of your fucking mind?' "

Gillingham, however, was sure of his sanity.

In October, he brought his case to the grand jury, which conducts its proceedings in secret. One reason prosecutors like going to the grand jury is that defense lawyers can't cross-examine witnesses or ask any questions. Gillingham argues that because there were so many witnesses and defendants in this case--many with their own attorneys--going through a public pretrial review would have taken "weeks and weeks."

The case before the grand jury took seven days, with 19 witnesses producing 600 pages of transcribed testimony.

What the grand jury heard didn't always support the theories pushed by San Jose police to the press after the June bust.

As to the issue of whether Keavy was "recruiting" people from San Jose and elsewhere, defense attorney Pam Herzig points out that the escorts who testified all said they had come to Business Class asking for work.

True, Business Class had an employment phone line, which undercover officers contacted to apply for jobs. Officer Connie Solma, who posed as an applicant, testified that "Devon" told her she had a good chance to get a job working for the agency because "he did not have a whole lot of models in San Jose."

Even DA Gillingham concedes that "the vast majority" of Keavy's business was north of Santa Clara County. He also acknowledges that there wasn't any direct evidence to suggest that Business Class was trying to "expand" into Silicon Valley.

Nevertheless, he still asserts that Keavy sent plenty of business down this way.

Most of the clients Gillingham named during the court proceedings didn't even hail from San Jose, but rather from northern cities in the county such as Mountain View, Sunnyvale, Los Altos and Palo Alto.

It didn't really matter to the grand jury.

The prosecutor didn't have to prove any theories.

To win the case, Gillingham just had to show that, yes, indeed, Business Class was from time to time sending escorts down to Santa Clara County to prostitute themselves, which he clearly showed.

And on Oct. 27 the grand jury handed down an indictment of the madam and her appointed minions.

A FEW LOOSE STRINGS of the case still remain to be tied as it nears its conclusion. At press time, final sentencing still awaited some of the accused, practically all of whom pleaded guilty or no contest in late December. Rachel and Daniel Love are the only two defendants to enter not guilty pleas so far.

Three days before Christmas, Keavy pleaded no contest to nine counts of pimping, two counts of pandering and two counts of money laundering. On Wednesday, wearing all black, she was sent to prison by Superior Court Judge LaDoris Cordell for the minimum required sentence of three years; Gillingham had asked for six years.

Keavy also has filed a civil claim in Superior Court challenging the district attorney's attempt to confiscate $252,600 in cash and stocks from her.

One of the bookers, who worked under the name "Cameron," is facing three years in state prison for pandering and violating an earlier probation. Another has agreed to serve one year in jail. The other four bookers charged in the case are slated to get probation and community service.

Mark Dudgeon faces one felony count of conspiracy, which suggests a much more lenient fate for him than if he had been charged with pimping and pandering, which police initially rapped him for in June.

None of the escorts or clients were prosecuted, a fact Gillingham attributes to the difficulty of proving prostitution cases beyond a reasonable doubt unless there is an eyewitness or a confession under oath. "Also," Gillingham adds, "the emphasis on our case was on the people who were making money from the work being done by the prostitutes."

None of the male escorts--who represented 20 percent of the business--were even called to testify, let alone face criminal charges.

As the case winds down, the question still remains: Was it worth all the cost for local taxpayers to bust Business Class Escorts?

Deputy DA Gillingham answers the question in a roundabout way. "Has [prostitution] been going on since time immemorial? Yes. Will it go on again? Yes." Gillingham Jr. answers his own rhetorical questions. "The bottom line is, these people will not send [escorts] to Santa Clara County again. And with their background, I doubt that we'll ever see them in the criminal justice system again."

Before being escorted to state prison this week, Keavy hugged her lawyer and comforted friends. She knew the risks.

And already, someone else in the Bay Area has appropriated the name Business Class Escorts. It does, however, have a new phone number.

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From the February 4-10, 1999 issue of Metro.

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