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Ex-NYPD Detective, Wife Admit To Running Multi-Million Dollar Gambling, Prostitution Ring

Ludwig Paz
Ludwig Paz Photo Credit: Facebook

A former NYPD detective and his wife both pleaded guilty to running a multi-million dollar gambling and prostitution ring that reached from Queens to Long Island and allegedly involved seven active duty NYPD officers.

Ludwig Paz, 51, who was assigned to the NYPD vice squad, pled to two counts of attempted enterprise corruption and one count of promoting prostitution, acting Queens District Attorney John Ryan said.

He also agreed to turn over $20,840 in illegal profits.

His wife, Arelis Peralta, pleaded guilty to two counts of attempted enterprise corruption. She has already been sentenced to 364 days in jail.

“The vast majority of police officers are honest, hardworking professionals who have sworn an oath to enforce and uphold the law," said Ryan. "Regrettably, there are a few members of service who are willing to tarnish the badge they wear for the chance to make a few easy bucks."

According to Ryan, Paz, a Queens resident, used his knowledge of the inner workings of the New York City Police Department to run a string of brothels in Queens, Brooklyn and Hempstead, Long Island, as well as to use established lotteries to run illegal gambling in beauty salons and other locations in Brooklyn and Queens.

"This kind of corruption will not be tolerated and the guilty pleas and promised time behind bars to be meted out should serve as a warning to all residents – including members of service – that lawlessness will not be tolerated in New York City," he added.

An investigation into Paz's enterprise began in April 2015 following an anonymous tip to the NYPD’s Internal Affairs Bureau that some police officers – active and retired – were involved in a complex illegal operation, said the DA's Office.

According to the charges, it was determined that Paz, who worked with his wife Peralta, headed up the two illegal enterprises and, as a partner or sole operator, assisted with the day-to-day business at seven of the eight brothels.

The brothels were located at Liberty and Onderdonk Avenues in Queens; on Gates, Foster and Fourth Avenues and 42 Street in Brooklyn and on Front Street in  Hempstead, Long Island.

Paz was successful by working closely with his NYPD cohorts, including a vice detective, who has also already pleaded guilty, who would provide him with intel on police procedures, scheduled raids and other vital information that kept the brothels open and in business, the DA's Office said.

In addition, the detective disclosed detailed descriptions of undercover officers – what they were wearing and their exact location when they were conducting an undercover operation and approaching a brothel. This information greatly compromised the safety of the undercover officers, the DA said.

The intel on vice procedures enabled Paz to set up protocols for new brothel clients that weeded out undercover detectives. Knowing those police officers could not expose their genitals when interacting with prostitutes, new clients were required to undress and allow themselves to be fondled before getting past security.

Paz also used his contacts within the NYPD to thwart raids by paying for confidential police information.

The prostitution ring alone is alleged to have raked in more than $2 million in 13 months using online ads to attract customers. After getting through the screening process, clients were given their choice of prostitutes and paid up to $40 for 15 minutes of sex or up to $160 for a full hour, the DA said.

Paz, who is scheduled to be sentenced in June, faces four to 12 years in prison.

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