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A quote from Thomas Jefferson is etched into a wall outside the Mark O. Hatfield U.S. Courthouse in downtown Portland.

(Bryan Denson/The Oregonian)

A 73-year-old man who authorities say operated 11 adult entertainment businesses in the Portland metropolitan area is now facing federal indictment, accused of promoting prostitution based on an unusual allegation.

Lawrence George Owen, said to have operated eight strip clubs, two adult video stores and one restaurant in the metro area between 2006 and 2010, is accused of placing ATM machines in each of the businesses that gave customers ready cash to spend on prostitution, according to a recently unsealed indictment.

The formal charge Owen faces is "conspiring to use facilities of interstate commerce,'' the ATM machines, in the promotion of prostitution.

Lawrence George Owen, 73

Owen, who had been living in Mexico during much of the multi-agency investigation, was booked into the downtown Portland jail last week on a U.S. Marshals' hold and is due in U.S. District Court in Portland Tuesday afternoon for a detention hearing.

Owen has entered a not guilty plea to the charge.

"Most of the dancers, manager co-conspirators and bartenders stated that customers who wanted a private show involving prostitution routinely withdrew cash from the ATMs in operation at the businesses,'' IRS special agent Maranda L. Cole wrote in an arrest warrant affidavit. "This means the ATMs were interstate facilities that were used to promote and facilitate prostitution.''

Based on federal court documents, law enforcement has been investigating these businesses for at least nine years.

A Portland police undercover vice squad held undercover sting operations from 2006 to 2009 at the strip clubs, sending in a man to see if he could obtain prostitution services from dancers.

The man made 21 visits to three of the businesses and paid for prostitution services on 18 of the visits. By June 2010, federal agents obtained warrants to search 10 of the businesses and five residences tied to alleged family conspirators, the affidavit said. The federal court records do not identify the businesses associated with Owen.

Agents seized about 85 boxes of business records and $843,000 in cash during the searches.

Federal investigators interviewed about 30 people who worked at the 11 businesses. About 20 of those people testified before a grand jury in Portland, according to the affidavit.

At the strip clubs, dancers performed in 19 private show rooms. Customers had to pay "the house'' $60 in cash and the dancer at least $100 for a 30-minute private show, the affidavit said.

The dancers routinely performed acts of prostitution with customers during the investigative period from 2006 through June 2010, Cole wrote in the affidavit.

Customers who paid for private shows "routinely withdrew cash from the ATMs in operation at the businesses,'' and every transaction involving an ATM involved an interstate electronic transfer of funds.

"This means the ATMs were interstate facilities that were used to promote and facilitate prostitution,'' the affidavit said.

Many of those who testified before a grand jury said Owen and the manager and family co-conspirators "knew about, promoted and with respect to some of them, actively managed the prostitution activities,'' according to the affidavit. Owen also regularly paid dancers to have sex with him, the document said.

Owen lived in Mexico during most of the investigation, but he regularly came to Portland for meetings, according to federal agents.

Owen was detained on the federal allegations first in Southern California in late February and transported to Portland last week to face the federal charges. Last week, a federal magistrate judge ordered him to remain in custody, finding there's a serious risk he would flee.

--Maxine Bernstein

mbernstein@oregonian.com

503-221-8212; @maxoregonian