Kenneth Denning: Charged with Prostitution and Fraud (What Happened?)

A Holland, Massachusetts, man and owner of a Connecticut strip club was arrested this week alongside two of his employees on federal charges involving prostitution, tax fraud, and financial misconduct tied to the club’s operation. The announcement came Wednesday from U.S. Attorney for the District of Connecticut, Vanessa Avery.

Kenneth Denning, 67, is the longtime owner of Electric Blue, a strip club located in Tolland, Connecticut. Alongside Denning, Joshua Baker, 41, the club’s bookkeeper and manager, and William Mayo, 41, a bouncer responsible for hiring dancers, were also arrested and charged in a sweeping 12-count federal indictment.

Federal prosecutors allege that Electric Blue served as a front for commercial sex acts and a series of financial crimes, including tax fraud and misuse of pandemic relief funds. The indictment claims that the club’s semi-private rooms were used regularly by dancers to engage in prostitution with customers. 

Patrons would reportedly pay an initial fee for access to these rooms, then make direct payments to the dancers for sex acts. Meanwhile, the club collected cover fees from dancers to perform on-site, creating multiple streams of unreported income.

Authorities say that Baker or other staff collected the cash from these transactions, documenting it in envelopes indicating its source, and stored the money in a safe in Kenneth Denning’s office. 

Prosecutors referred to the cash as “Kenny’s money,” a term they say was used internally to describe the funds available for both business operations and Kenneth Denning’s spending, which allegedly included frequent trips to casinos where he spent substantial amounts of money.

The indictment further alleges that from 2016 to 2019, Kenneth Denning and Baker knowingly underreported the club’s income to the Internal Revenue Service. They are accused of omitting nearly $6 million in earnings, resulting in the club underpaying federal taxes by more than $2 million over three years. The omitted income included both club revenue and proceeds from the alleged prostitution taking place on-site.

In addition to the tax fraud charges, Kenneth Denning is also accused of misleading federal authorities during the COVID-19 pandemic. According to the indictment, he falsely certified that Electric Blue did not offer “live performances of a prurient sexual nature” to qualify for an Economic Injury Disaster Loan (EIDL). Based on that application, Kenneth Denning received $150,000 in June 2020 through the federal relief program designed to assist businesses impacted by the pandemic.

The charges laid out in the indictment include:

• Conspiracy to use an interstate facility to promote or facilitate prostitution
  
• Unlawful employment of unauthorized immigrants
  
• Conspiracy to file false tax returns
  
• Conspiracy to commit promotional and concealment money laundering
  

Prosecutors allege that many of the dancers hired by Mayo were not legally authorized to live or work in the United States, further compounding the legal issues facing the club’s management.

The prostitution and employment-related charges carry a maximum sentence of five and a half years in federal prison. 

Kenneth Denning and Baker face additional, more serious charges related to the club’s financial operations. The false tax return conspiracy and money laundering conspiracy charges carry potential penalties of five years and 20 years, respectively.

In addition to the conspiracy counts, Kenneth Denning faces several individual charges, including:

• Engaging in a financial transaction involving criminal proceeds, linked to a $22,000 deposit at Mohegan Sun Casino, which prosecutors say stemmed from prostitution earnings.
  
• Aiding and abetting the filing of a false personal tax return for the 2020 tax year.
  
• Willful failure to file a personal tax return for 2021.
  
• Wire fraud, related to the fraudulent EIDL loan application submitted during the pandemic.
  

As of now, all three men are awaiting further legal proceedings. The case is being prosecuted by the U.S. Attorney’s Office for the District of Connecticut and reflects the federal government’s continued efforts to address illegal financial activity, commercial sex trafficking, and fraud involving pandemic relief funds.

Tolland Strip Club Owner, Manager, and Bouncer Indicted on 12 Federal Charges

A federal grand jury has returned a 12-count indictment charging three individuals with a range of offenses linked to the operations of Electric Blue, a strip club located in Tolland, Connecticut. The announcement was made by Vanessa Roberts Avery, U.S. Attorney for the District of Connecticut, alongside federal and state law enforcement officials.

The defendants Kenneth Denning, 67, of Holland, Massachusetts; Joshua Baker, 41, of Willimantic, Connecticut; and William Mayo, 41, of Manchester, Connecticut, were arrested on Wednesday following the indictment.

According to federal prosecutors, Denning owned and operated Electric Blue, while Baker served as the club’s manager and bookkeeper. Mayo worked as a bouncer and was primarily responsible for hiring dancers. Many of those dancers, investigators allege, were not legally authorized to work or live in the United States.

Allegations of Commercial Sex Acts and Financial Misconduct

The indictment outlines an array of illicit activities allegedly occurring at the club. Prosecutors say that Electric Blue featured semi-private “lap dance” and “VIP” rooms, where dancers routinely engaged in commercial sex acts with customers.

The payment model, as described in the indictment, involved customers paying the club an entry fee for room access and then an additional cash fee directly to the dancer for the sex act. Additional revenue streams included cover charges at the entrance and fees paid by dancers to perform at the club.

The indictment alleges that Baker or other staff members would collect this revenue, record the source of the cash on envelopes, and place it in a safe located in Denning’s office. This cash was reportedly referred to internally as “Kenny’s money” and was allegedly used to pay club expenses and cover Denning’s spending, including significant expenditures at casinos.

Tax Fraud and Pandemic Relief Abuse

Denning and Baker are also accused of falsifying financial records and misleading the club’s tax preparer during the tax years 2020, 2021, and 2022. Specifically, they are charged with underreporting the club’s gross income, including earnings from illegal sex work.

Prosecutors allege that approximately $5.7 million in business receipts were concealed from the IRS, resulting in a tax underpayment of more than $2 million.

Further, Denning is accused of fraudulently obtaining a COVID-19 Economic Injury Disaster Loan (EIDL) by falsely certifying that Electric Blue did not host “live performances of a prurient sexual nature.” Based on that false statement, he received a $150,000 loan in July 2020.

Federal Charges and Possible Sentences

The indictment includes a series of charges against the three defendants:

• Conspiracy to use an interstate facility to promote or facilitate prostitution, punishable by up to five years in prison.
  
• Unlawful employment of unauthorized immigrants carries a maximum sentence of six months.

Denning and Baker face additional charges:

• Conspiracy to file false tax returns (maximum sentence: five years).
  
• Conspiracy to commit promotional and concealment money laundering (maximum sentence: 20 years).

Denning alone faces several more counts:

• Engaging in a financial transaction with proceeds from prostitution, related to a $21,700 cash deposit at Mohegan Sun Casino (maximum: 10 years).
  
• Aiding and abetting the filing of a false tax return for the 2020 tax year (three years maximum).
  
• Willful failure to file a tax return for 2021 (one year maximum).
  
• Wire fraud, tied to the EIDL loan (up to 20 years in prison).

Presumption of Innocence

U.S. Attorney Vanessa Avery emphasized that these charges are allegations only, and all defendants are presumed innocent unless and until proven guilty in a court of law.

Investigation and Prosecution

This case is the result of a joint investigation by:

• Homeland Security Investigations (HSI)
  
• IRS Criminal Investigation Division
  
• Connecticut State Police
  
• Connecticut Department of Consumer Protection – Liquor Control Division
  
• Massachusetts State Police

Additional support was provided by the Willimantic and Manchester Police Departments.

The prosecution is being handled by Assistant U.S. Attorneys Ross Weingarten and Robert S. Dearington.

Overview of Prostitution & Fraud in Massachusetts

Massachusetts has recently seen several high-profile prosecutions involving intricate prostitution rings intertwined with financial fraud and human trafficking. Cases often involve elaborate brothel operations, interstate coordination, and the use of shell companies or deceptive websites to facilitate activities. These cases frequently lead to substantial financial penalties and custodial sentences.

Major Prostitution & Fraud Cases

1. High-End Brothel Network (Greater Boston & VA)

• Defendant: Han Lee (42, Cambridge, MA)
  
  • Guilty plea: September 2024 — conspiracy to induce interstate prostitution & money laundering.
    
  • Background: Operated luxury brothels in Cambridge, Watertown, Fairfax, and Tyson’s from 2020 to 2023, mainly serving affluent clients via marketing websites offering “professional photography” as a front.
    
  • Revenue: Estimated illicit gains of $5.6 million, laundered through money orders and accounts.
    
  • Sentence: Four years imprisonment, forfeiture of ~$5.5–5.6 million.
    
  • Clientele: Hundreds of clients (politicians, executives, doctors, lawyers) paid $350–$600/hour; 28 men later faced public misdemeanor hearings.
    
• Co-defendants:
  
  • James Lee (70): rented six high-end apartments, facilitated the brothel operations, and helped launder brothel money and commit PPP/EIDL loan fraud totaling ~$580,000. Sentenced in May 2025 to 27 months and ordered to pay ~$569k restitution plus $63k forfeiture.
    
  • Junmyung Lee (31, Dedham): pleaded guilty; sentenced April 2025 to 12 months plus financial restitution.

2. Human Trafficking & Coercion-Based Prostitution

• Trevor Jones (47, Everett):
  
  • Pleaded guilty May 15, 2025, to sex trafficking four women through force, fraud, or coercion. Operated from 2016–2023, targeting victims with substance use disorders.
    
  • Sentencing set for August 12, 2025; faces mandatory minimum 15 years to life imprisonment.
    
• Jermall Anderson (45, Tewksbury):
  
  • Pleaded guilty in November 2024 to trafficking seven victims via controlled substance dependency, coercion, and interstate transportation (New England/New York/New Jersey network).
    
  • Faces 15 years to life minimums under federal law.
    
• Melando Streety (41, Lowell):
  
  • Indicted in December 2024 on sex trafficking and interstate transport charges (MA, NV, RI, NY).
    
  • Faces mandatory 15-year minimum and up to life imprisonment; multiple counts of interstate prostitution transport.
    
• Jonathan Vaughan (37, Boston):
  
  • Pleaded guilty September 19, 2024, for running a drug-and-sex trafficking hub at “Mass & Cass,” involving sex trafficking and cocaine distribution.
  • Sentencing scheduled for December 19, 2025; plea includes 180 months (15 years) recommendation.

Patterns & Statistics

• Scale & Scope:
  
  • Thousands in illicit revenue—e.g., $5.6 million gross in the Han Lee operation.
    
  • Multiple victims per trafficker; Trevor Jones alone trafficked four women, and Anderson seven.
    
• Modus Operandi:
  
  • Use of deceptive websites, false company fronts, and luxury apartment rentals.
    
  • Tactics include money laundering via money orders and COVID-19 relief loan fraud.
    
• Legal Measures:
  
  • Massachusetts employs aggressive federal & state prosecution.
    
  • Public hearings for accused clients aim to ensure transparency and accountability.

Conclusion

Massachusetts continues to confront complex prostitution and fraud networks through robust legal action, enhanced transparency, and collaboration across law enforcement agencies. While brothel operators and traffickers now face harsher consequences, the ongoing public hearings and prosecutions serve to deter similar future schemes.