BAD CREDIT

DALLAS MEN WHO USED THEIR credit cards to purchase services from high-priced call girls could end up being witnesses in court when federal prosecutors begin trying cases resulting from “Operation Out Call,” one of the largest-ever 1RS undercover operations. “I imagine there’s going to be some upset spouses and significant others out there,” said Marty Sheil, branch chief of the Dallas 1RS Criminal Investigation Division.

The investigation centered around Dallas-based Tejas Financial Services, Inc., which offered a unique service: processing credit-card charges for pimps and madams running high-priced call girls. Johns who didn’t have cash-or who wanted the frequent flyer miles- could put their payments to Trixie and Tiffany on their Visa, MasterCard or American Express. The average fee for services rendered was $300, but some bills went as high as $10,000. Prostitutes carried portable credit card machines. Tejas verified the Johns’ identifications, then wrote checks to the madam or pimp, taking a 16to 18 percent fee off the top.

Tejas drew the attention of a similar New Jersey firm called Entertainment Management Services, Inc., run by a 35-year-old entrepreneur named Kenneth Byrnes, who approached Tejas with a joint business proposal. For about a year, Byrnes and his associates divulged all they knew about the business of prostitution to Tejas officials in Dallas. They boasted that they had laundered more than $16 million in credit-card sex fees in two years, netting up to $3 million.

Byrnes didn’t know that his eager pupils were federal agents, and every word he said to them had been videotaped. In late March, 1RS agents used die information to serve search warrants on Byrnes and the operators of 100 other such businesses in more than 24 states. “Dallas was one of the hubs,” says Van Carlton, an 1RS special agent.

One of the biggest local operators was Richardson resident Allen C. Walker, who told undercover agents he controlled 75 percent of the Dallas call-girl business and that he was raking in over $10,000 per week. Running Operation Out Call was expensive, but the 1RS actually made a small profit from processing fees and $450,000 in seizures, Carlton says. The ripples from the undercover operation may not be over. Woe to any roving businessman who charged off expenses to Tejas Financial Services, Inc. on his income tax.