Brothel made £3.5m profit for its owner

The Black Country owner of a highly-lucrative brothel made profits of at least £3.5 million which he "invested" in a series of money-laundering companies in a bid to hide the profits, a court heard.

Carl Pritchett, who was jailed for two years in 2006 for running Cuddles massage parlour in Bearwood, Smethwick, was accused by the prosecution of "fighting tooth and nail to keep his ill-gotten gains". The Crown Prosecution Service has launched a court battle for the cash.

The 56-year-old from Holbeache Road, Wall Heath, Dudley, had employed 19 foreign women, mainly from Eastern Europe, as sex slaves at the Hagley Road business.

Police told Wolverhampton Crown Court yesterday that papers found at the brothel showed they served an average 490 clients a week which made Pritchett a profit of more than £6m over six years.

However the figure being claimed back at the hearing was reduced to £3.5mon the evidence of one employee who said the prostitutes would pay £20 to management for each customer and then £10 on each return visit.

Pritchett set up Cuddles on the Hagley Road in 1999 with money he made from another brothel in Selly Oak, Birmingham, bought in 1991 in his mother's name but using his money, the court was told.

Detective Constable John Baker, of the Birmingham-based financial investigation team, said the purchase money was the profit Pritchett had made from previously renting the brothel over a period of years.

In 1998 he created a company called Sphere, set up with the sole purpose of selling the property for £320,000 to Aldi for a supermarket.

The money went abroad, first to a firm in Malaysia where it was refunded to a Hong Kong bank and finally found its way into an account in Pritchett's name in Malaga, Spain.

He succeeded in hiding his financial assets by using false names and creating shadow companies.

He was always careful to keep his name off the books so that the audit trail could not be traced back to him, said John Butterworth, prosecuting.

The proceeds of crime hearing, expected to take a week, continues.