Michelle Schramm Indictment

Case 1:10-cr-00571-PAB Document 1 Filed 11/15/10 USDC Colorado Page 1 of 13
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO
Criminal Action No.
UNITED STATES OF AMERICA,
Plaintiff,
v.
1. MICHELLE SCHRAMM,
a/k/a UK CHIN SCHRAMM,
Defendant.
INDICTMENT
18 U.S.C. § 1952(a)(3) & (b)
18 U.S.C. § 2422(a)
18 U.S.C. § 1957(a)
26 U.S.C. § 7206(1)
18 U.S.C. § 982(a)(1)
The Grand Jury Charges that:
COUNTS 1 - 24
(Travel Act – Use of Interstate Facility to Promote a Business
Enterprise Involving Prostitution Offenses)
The Business Enterprise
1. Beginning on or about December 7, 2005, and continuing
through and including March 17, 2009, in the State and District of
Colorado, the defendant MICHELLE SCHRAMM, a/k/a UK CHIN SCHRAMM
(“Schramm”), controlled and operated three businesses in the Denver
Metropolitan area. The three businesses were: (1) Bali Spa located
in Arapahoe County, (2) Malley Spa located in Northglenn, and (3)
Green Garden Spa (also known as Beach Tanning Spa) located in
Edgewater. (collectively referred to as “spas”). In the course of
running her spas, the Defendant regularly provided prostitution
1
services.
2. The Defendant typically staffed her spas with a rotating
staff of female workers (also referred to as “prostitutes”). In
exchange for money, the prostitutes would provide massages as well
as routinely perform sexual acts for customers (also referred to as
“Johns”).
3. To facilitate operation of the spas, the Defendant
employed a housemother. The housemother served as an on-site
manager of the spas. She was typically responsible for scheduling
a customer’s spa session, collecting funds from customers,
providing towels and linens, cleaning, and attending to the various
needs of the prostitutes and Johns. The housemother reported to
SCHRAMM and was responsible for providing the money collected from
the spa during the course of the day.
4. The Defendant promoted, managed, established, carried on
or facilitated the operation of each of the spas in various ways,
including but not limited to:
(A) arranging for the spas’ business locations

and furnishings;
(B) arranging for or obtaining the spas’ business

licenses;
(C) paying for or arranging for the payment of

various bills connected with the spas
including utilities and rent;
(D) paying for or arranging for advertisement for

the spas through Westword magazine, internet
websites and other media outlets;
(E) collecting the proceeds from the spas and
2
paying the various workers and housemother;
(F) providing lodging for various workers

including at times allowing such workers to
stay at her personal residence or sleep
inside the spas;
(G) arranging for or providing interstate

transportation for the prostitutes to or from
Colorado by airplane;
(H) arranging for transportation of workers

within Colorado through taxicabs or use of an
automobile controlled by the Defendant; and
(I) supplying the prostitutes with condoms;
Use of the Mail or a Facility in Interstate Commerce

5. On or about the dates set forth below, in the State and
District of Colorado, and elsewhere, the defendant SCHRAMM used the
mail or a facility in interstate commerce as set forth below, with
intent to otherwise promote, manage, establish, carry on, or
facilitate the promotion, management, establishment, or carrying
on, of unlawful activity, namely, a business enterprise involving
the prostitution offenses of Pimping in violation of Colorado
Revised Statute 18-7-206, and Keeping a Place of Prostitution in
violation of C.R.S. 18-7-204.
Count Date Mailing or Facility Used in Interstate

Or Foreign Commerce
1 1-4-2006 Credit card charge for prostitution

services by CH for $220 using Wells
Fargo Bank and connected charge terminal
2 1-16-2006 Telephone Call from Defendant’s cellular

phone to Bali Spa

services by MK for $210 using Wells
3
services by BH for $210 using Wells


services by CH for $210 using Wells

services by JR for $165 using Wells
7 12-6-2006 Airline flight by DL from Colorado

connected with providing prostitution
services
8 1-15-2007 Bulk condom delivery from Okamoto, USA,

Inc. using Federal Express
9 2-16-2007 Internet purchase of airline ticket for

UI through Orbitz connected with
providing prostitution services
10 3-4-2007 Airline flight by UI to Colorado

services

services by LB for $250 using Wells

phone to Bali Spa

14 7-26-2007 Airline flight by LV to Colorado

services
15 7-26-2007 Internet purchase of airline ticket for

LV through Orbitz connected with
providing prostitution services

services by MG for $210 using Wells

services by TC for $165 using Wells
4


phone to Bali Spa

Inc.using Federal Express

22 12-16-2008 Airline flight by SL to Colorado

services

services by MK for $210 using Wells

6. Thereafter, the Defendant performed or attempted to
perform an act, as described above in paragraphs 1-5 of the
Indictment, that promoted, managed, established, carried on, or
facilitated the promotion, management, establishment, or carrying
on of such business enterprise involving the prostitution offenses
of Pimping in violation of C.R.S. 18-7-206, and Keeping a Place of
Prostitution in violation of C.R.S. 18-7-204.
Each of the foregoing counts was in violation of Title 18,
United States Code, Section 1952(a)(3) & (b).
COUNT 25
(Knowingly Persuading, Inducing or Enticing Travel of Person in

Interstate Commerce to Engage in Prostitution)
The Grand Jury charges that:
7. On or about March 4, 2007, in the State and District of
5
Colorado, and elsewhere, the defendant, MICHELLE SCHRAMM, a/k/a UK
CHIN SCHRAMM, did knowingly persuade, induce, or entice an
individual, namely, UI, to travel in interstate commerce in the
United States, to engage in prostitution, or in any sexual activity
for which any person can be charged with a criminal offense, and
attempted to do the same.
The foregoing count was in violation of Title 18, United
States Code, Section 2422(a).
COUNT 26

8. On or about July 26, 2007, in the State and District of
Colorado, and elsewhere, the defendant, MICHELLE SCHRAMM, a/k/a UK
CHIN SCHRAMM, did knowingly persuade, induce, or entice an
individual, namely, LV, to travel in interstate commerce in the

COUNT 27

6
9. On or about December 16, 2008, in the State and District
of Colorado, and elsewhere, the defendant, MICHELLE SCHRAMM, a/k/a
UK CHIN SCHRAMM, did knowingly persuade, induce, or entice an
individual, namely, SL, to travel in interstate commerce in the

COUNTS 28 - 31
(Engaging in Monetary Transaction in Property Derived from
Specified Unlawful Activity & Aiding and Abetting)
10. On or about the dates alleged below as to each count, in
the State and District of Colorado, and elsewhere, the defendant
MICHELLE SCHRAMM, a/k/a UK CHIN SCHRAMM, did knowingly engage and
attempt to engage in a monetary transaction affecting interstate or
foreign commerce, in criminally derived property of a value greater
than $10,000, which property was derived from specified unlawful
activity, namely, Travel Act offenses in violation of Title 18,
United States Code, Section 1952(a)(3), and offenses involving the
Persuasion and Inducement of Interstate Travel for Prostitution in
violation of Title 18, U.S.C. 2422(a), and aided and abetted the
same, as described below:
Count Date Monetary Transaction
7
Withdrawal of $37,241.75 in funds from WaMu

28 2-9-2007 Bank (account ending #7213) for the
purchase of real property located at 11045
E. Louisiana Place, Aurora, Colorado
Wire Transfer of $51,149.76 in funds from
29 3-7-2007 Defendant’s WaMu Bank (account ending
#7213) to Digital Escrow, Inc. for the
purchase of real property located at 4007
231st Street Ct. E, Spanaway, Washington
30 6-6-2008 Exchange of $50,000 in cash for two checks
made payable to “Michelle Schramm” from
Linex Manufacturing Inc. in the amounts of
$30,000 and $20,000 each
Check for $34,255.30 from WaMu Bank
31 9-27-2008 (account ending #7213) to Mercedes Benz of
Westminster for purchase of vehicle
Each of the foregoing counts was in violation of Title 18,
United States Code, Sections 1957(a) and 2.
COUNT 32
(Filing False Tax Return)
11. On or about April 20, 2007, in the State and District of
Colorado, the defendant MICHELLE SCHRAMM, a/k/a UK CHIN SCHRAMM,
did willfully make and subscribe a false U.S. Individual Income Tax
Return, Form 1040, for the year 2006, which was verified by a
written declaration that it was made under penalties of perjury and
was filed with the Internal Revenue Service, which said return the
Defendant did not believe to be true and correct as to every
material matter, in that said return reported business income of
$97,785 (line 12 of Form 1040) which Defendant then and there well
knew and believed was false and understated the amount of business
income.
8
States Code, Section 7206(1).
COUNT 33
(Filing False Tax Return)
12. On or about April 15, 2008, in the State and District of
Colorado, the defendant MICHELLE SCHRAMM, a/k/a UK CHIN SCHRAMM,
did willfully make and subscribe a false U.S. Individual Income Tax
Return, Form 1040, for the year 2007, which was verified by a
written declaration that it was made under penalties of perjury and
was filed with the Internal Revenue Service, which said return the
Defendant did not believe to be true and correct as to every
material matter, in that said return reported business income of
$128,524 (line 12 of Form 1040) which Defendant then and there well
knew and believed was false and understated the amount of business
income.
States Code, Section 7206(1).
FORFEITURE ALLEGATION
13. The allegations contained in Counts 1 through 27 of this
Indictment are hereby re-alleged and incorporated by reference for
the purpose of alleging forfeiture pursuant to the provisions of
Title 18, United States Code, Section 981(a)(1)(C), Title 28,
United States Code, Section 2461(c), Title 18, United States Code,
Section 2428, and Title 18, United States Code, Section 982.
9
14. Upon conviction of the violations alleged in Counts 1
through 21 of this Indictment involving violations of Title 18,
United States Code, 1952 , defendant MICHELLE SCHRAMM, a/k/a UK
CHIN SCHRAMM shall forfeit to the United States, pursuant to Title
18, United States Code, Section 981(a)(1)(C), and Title 28, United
States Code, Section 2461(c) any and all of the defendants’ right,
title and interest in all property constituting and derived from
any proceeds the defendants obtained directly and indirectly as a
result of such offense.
15. Upon conviction of the violations alleged in Counts 22
through 24 of this Indictment involving violations of Title 18,
United States Code, Section 2422, defendant MICHELLE SCHRAMM, a/k/a
UK CHIN SCHRAMM shall forfeit to the United States, pursuant to
Title 18, United States Code, Section 2428, any and all of the
defendant’s right, title and interest in any property, real or
personal, used or intended to be used to commit or to facilitate
the commission of such offense, any property, real or personal,
that constitutes or is derived from proceeds traceable to the
commission of such offense, or any property traceable to such
property.
16. The assets to be forfeited, pursuant to Title 18, United
States Code, Section 981(a)(1)(C), Title 28, United States Code,
Section 2461(c), Title 18, United States Code, Section 2428, for
the violations described herein include, but are not limited to:
a.$599,300.00 in United States Currency seized from

Security Self Storage, 10601 East Iliff Avenue, Unit L-12;
b. $2,006.07 seized from Wells Fargo Bank account ending
10
#6892 in the name of Michelle Schramm;
c. $14,938.32 seized from Wells Fargo Bank account

ending #6553 in the name of Michelle Schramm d/b/a Bali Spa and
d/b/a Malley Spa;
d. $12,275.54 seized from Wells Fargo Bank account

ending #9919 in the name of Michelle Schramm d/b/a Bali Spa and
d/b/a Malley Spa;
e. $1,025.00 seized from Bank of the West account ending

f. $99,622.19 seized from Bank of the West account

ending #1644 in the name of Michelle Schramm;
g. $169,717.42 seized from Washington Mutual Bank

account ending #7213 in the name of Michelle Schramm;
h. $100,583 seized from Washington Mutual Bank account

i. $701 seized from Washington Mutual Bank account

j. $3,039.84 seized from First Bank of Colorado account

k. $99,444.19 seized from First Bank of Colorado account

l. $6,000.00 in Money Orders seized from Malley Spa

located at 466 Malley Drive, Northglenn, Colorado;
m. $10,425.00 in United States Currency seized from

11045 East Louisiana Place, Aurora, Colorado;
n. $2,771.00 in United States Currency seized from

Malley Spa located at 466 Malley Drive, Northglenn, Colorado;
o. All monies held in Charles Schwab Investment Account

p. All monies held in Vanguard Investment Account ending

q. 11045 East Louisiana Place, Aurora Colorado, titled in

the name of Monica Brown;
r. 5065 South Olathe Circle, Centennial, Colorado;
s. A money judgment in the amount of proceeds obtained by
11
the scheme and by the defendant, for violations of Title 18, United
States Code, 1952; and
t. A money judgment in the amount of proceeds obtained by

the scheme and by the defendant, for violations of Title 18, United
States Code, 2422.
17. Upon conviction of the violations alleged in Counts
Twenty-Five through Twenty-Seven of this Indictment involving
violations of Title 18, United States Code, Section 1957, defendant
MICHELLE SCHRAMM, a/k/a UK CHIN SCHRAMM shall forfeit to the United
States, pursuant to Title 18, United States Code, Section 982(a)(1)
any and all of the defendant(s)’ right, title and interest in all
property, real or personal, involved in such offense, or all
property traceable to such property, including, but not limited to:
a. Real property located at 11045 East Louisiana Place,

Aurora Colorado; and
st
b. Real property located at 4007 231 Street Ct. E,
Spanaway, Washington;
18. If any of the property described in the paragraphs
above, as a result of any act or omission of the defendants:
a) cannot be located upon the exercise of due

diligence;
b) has been transferred or sold to, or deposited
with, a third party;
c) has been placed beyond the jurisdiction of the
Court;
d) has been substantially diminished in value; or
e) has been commingled with other property which
cannot be subdivided without difficulty;
it is the intent of the United States, pursuant to Title 21, United
States Code, Section 853(p), incorporated by Title 18, United
States Code, Section 982(b) and Title 28, United States Code,
Section 2461(c), to seek forfeiture of any other property of said
defendants up to the value of the forfeitable property.
12
A TRUE BILL:
Ink signature on file in the Clerk’s Office

FOREPERSON
JOHN F. WALSH
United States Attorney
By: S/ Tim R. Neff

TIM R. NEFF
Assistant United States Attorney
U.S. Attorney's Office
1225 17th Street, Suite 700
Denver, CO 80202
Telephone: (303) 454-0100
Fax: (303) 454-0402
e-mail: tim.neff@usdoj.gov
Attorney for Government
13
Case 1:10-cr-00571-PAB Document 1-1 Filed 11/15/10 USDC Colorado Page 1 of 2
(Rev. 05/05)
DEFENDANT: MICHELLE SCHRAMM a/k/a Uk Chin Schramm
YOB: 1955
ADDRESS: Unknown
COMPLAINT FILED? YES X NO
IF YES, PROVIDE MAGISTRATE CASE NUMBER:

IF NO, PROCEED TO “OFFENSE” SECTION
HAS DEFENDANT BEEN ARRESTED ON COMPLAINT? YES NO
IF NO, A NEW WARRANT IS REQUIRED
OFFENSE: - Counts 1 - 24, 18 U.S.C. §1952 (Travel Act – Use of Interstate Facility to
Promote a Business Enterprise Involving Prostitution Offenses)
Count 25 - 27, 18 U.S.C. §2422(a) (Knowingly Persuading, Inducing or Enticing

Travel of Person in Interstate Commerce to Engage in Prostitution)
Counts 28 -31, 18 U.S.C. §§ 1957(a) and 2 (Engaging in Monetary Transaction in

Property Derived from Specified Unlawful Activity and Aiding and Abetting)
Counts 32 and 33, 26 U.S.C. § 7206(1) (Filing a False Income Tax Return)
LOCATION OF OFFENSE: Arapahoe and Jefferson Counties, Colorado
PENALTY:
Counts 1 to 24: NMT 5 years imprisonment, a $250,000 fine, or both; NMT 3 years supervised
release; and a $100 Special Assessment Fee (each count)
Counts 25 - 27: NMT 20 years imprisonment, a $250,000 fine, or both; NMT 3 years supervised
Counts 28-31: NMT 10 years imprisonment, a $250,000 fine, or both; NMT 3 years supervised
release; $100 Special Assessment Fee
Counts 32-33: NMT 3 years imprisonment, a $100,000 fine, or both; NMT 1 years supervised
AGENT: Ivan Murray, Special Agent Internal Revenue Service

Case 1:10-cr-00571-PAB Document 1-1 Filed 11/15/10 USDC Colorado Page 2 of 2
Dennis Adams, Eric Smith, Brad Zborowski and Mark Ortler, Investigators
Arapahoe County Sheriff’s Office
AUTHORIZED BY: Tim R. Neff, Assistant U.S. Attorney
ESTIMATED TIME OF TRIAL:
five days or less X over five days other
THE GOVERNMENT
X will seek pretrial detention in this case will not seek pretrial detention in this case
The statutory presumption of detention is not applicable to this defendant. (Circle one)
OCDETF CASE: Yes X No

Michelle Schramm Indictment

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Case 1:10-cr-00571-PAB Document 1 Filed 11/15/10 USDC Colorado Page 1 of 13

IN THE UNITED STATES DISTRICT COURT

Criminal Action No.

UNITED STATES OF AMERICA,

The Grand Jury Charges that:

The Business Enterprise

1. Beginning on or about December 7, 2005, and continuing

Colorado, the defendant MICHELLE SCHRAMM, a/k/a UK CHIN SCHRAMM

(“Schramm”), controlled and operated three businesses in the Denver

in Arapahoe County, (2) Malley Spa located in Northglenn, and (3)

Green Garden Spa (also known as Beach Tanning Spa) located in

Edgewater. (collectively referred to as “spas”). In the course of

running her spas, the Defendant regularly provided prostitution

2. The Defendant typically staffed her spas with a rotating

staff of female workers (also referred to as “prostitutes”). In

exchange for money, the prostitutes would provide massages as well

as routinely perform sexual acts for customers (also referred to as

3. To facilitate operation of the spas, the Defendant

employed a housemother. The housemother served as an on-site

manager of the spas. She was typically responsible for scheduling

a customer’s spa session, collecting funds from customers,

providing towels and linens, cleaning, and attending to the various

needs of the prostitutes and Johns. The housemother reported to

the spa during the course of the day.

4. The Defendant promoted, managed, established, carried on

or facilitated the operation of each of the spas in various ways,

including but not limited to:

(A) arranging for the spas’ business locations

(B) arranging for or obtaining the spas’ business

(C) paying for or arranging for the payment of

(D) paying for or arranging for advertisement for

(E) collecting the proceeds from the spas and

paying the various workers and housemother;

(F) providing lodging for various workers

(G) arranging for or providing interstate

(H) arranging for transportation of workers

(I) supplying the prostitutes with condoms;

Use of the Mail or a Facility in Interstate Commerce

District of Colorado, and elsewhere, the defendant SCHRAMM used the

mail or a facility in interstate commerce as set forth below, with

intent to otherwise promote, manage, establish, carry on, or

facilitate the promotion, management, establishment, or carrying

on, of unlawful activity, namely, a business enterprise involving

the prostitution offenses of Pimping in violation of Colorado

Revised Statute 18-7-206, and Keeping a Place of Prostitution in

violation of C.R.S. 18-7-204.

Count Date Mailing or Facility Used in Interstate

1 1-4-2006 Credit card charge for prostitution

2 1-16-2006 Telephone Call from Defendant’s cellular

3 2-5-2006 Credit card charge for prostitution

4 3-23-2006 Credit card charge for prostitution

services by BH for $210 using Wells

5 10-16-2006 Credit card charge for prostitution

6 12-6-2006 Credit card charge for prostitution

7 12-6-2006 Airline flight by DL from Colorado

8 1-15-2007 Bulk condom delivery from Okamoto, USA,

9 2-16-2007 Internet purchase of airline ticket for

10 3-4-2007 Airline flight by UI to Colorado

11 3-10-2007 Credit card charge for prostitution

12 3-16-2007 Telephone Call from Defendant’s cellular

13 6-5-2007 Bulk condom delivery from Okamoto, USA,

14 7-26-2007 Airline flight by LV to Colorado

15 7-26-2007 Internet purchase of airline ticket for