Under the settlement, the U.S. Attorney's Office will not bring any additional criminal charges against the two companies or other ventures connected to the firms, which include Hotmovies.com and PrimeTel Communications. The agreement does not bar the IRS from bringing any tax-related charges and fines.
The plea agreement does not name a Philadelphia man, Richard Cohen, 54, who is a principal shareholder of National A-1, according to a sentencing memo filed by federal prosecutors.
A Philadelphia Daily News investigation last year reported that companies run by Cohen developed and operated Escorts.com out of an office building on Seventh Street near Chestnut.
"The defendants received subscription fees and payments in the form of money orders, checks, and credit cards from escorts and users of Escorts.com throughout the nation," according to the plea agreement.
From January 2007 through October 2010, the two companies received $5 million from subscribers to Escort.com. The site made specific mention of sex acts in exchange for cash, according to court documents.
The money-laundering and criminal-forfeiture charges grew out of a state police investigation in central Pennsylvania, where a trooper uncovered a link between online prostitution in the Williamsport area and Escorts.com, the Daily News reported.
Over two days in late October 2010, the state police and the FBI, joined by the IRS and city police, raided corporate offices and carted out more than 80 boxes of evidence.
Escorts.com was shut down in May. At the time, a note on the website read, "We thank you for all your support and wish you the best."
Cohen's HotMovies.com, one of the world's largest distributors of online porn, reportedly grossed at least $20 million. Cohen, along with several business partners, has amassed more than $10 million worth of real estate in and around Society Hill, the Daily News said.
Contact staff writer Nathan Gorenstein at 215-854-2797 or firstname.lastname@example.org.