Shoreline woman arrested in Everett latte stand prostitution case

On June 25, 2013, law enforcement from multiple jurisdictions served search warrants on eight locations in Everett, Edmonds, Kent, and unincorporated Snohomish County and made eight arrests. The arrests came after the Everett Police Department (EPD), in conjunction with the Kent Police Department (KPD), the Federal Bureau of Investigation and several other law enforcement entities concluded an extensive criminal investigation and developed evidence that several latte stands were being used to promote prostitution and lewd conduct. Seven of the locations were latte stands and one was a residence.

The owner of the seven stands, 51 year-old Carmela A. Panico of Snohomish, was arrested for conspiracy to promote prostitution and permitting prostitution.

Panico’s manager, a 22 year-old Shoreline woman, was arrested for prostitution and conspiracy to promote prostitution. Charges against the manager will be referred to the Snohomish County Prosecutor’s Office. 

Also arrested was 58 year-old Darrell L. O’Neill of Everett, a 30 year veteran Sergeant with the Snohomish County Sheriff’s Office (SCSO). It is anticipated he will be booked into the Marysville Jail for conspiracy to promote prostitution and official misconduct.

The initial investigation began in October of 2012 when the KPD investigated complaints of lewd conduct at a latte stand. Several baristas were identified and arrested for prostitution and lewd conduct. At that time, the seven latte stands were linked to Panico. During the investigation, a barista told detectives that a SCSO sergeant had engaged in inappropriate behavior while on the job and was providing information about ongoing undercover investigations targeting the latte stands.  The KPD notified the SCSO of the allegations and they immediately requested the EPD conduct a criminal investigation. Everett detectives examined information, conducted undercover surveillance and interviewed baristas. The EPD investigation led to arrests and search warrants at the seven latte stands.

On January 16, 2014, Penico was arrested again, and booked into the Snohomish County Jail for three counts of tampering with a witness and one count of intimidating a witness.

Since June 2013, Everett Police detectives have continued investigating Panico and her associates by conducting interviews and examining physical evidence collected during search warrant seizures. Over 100 baristas, either current or former employees of Panico, have been identified through the investigation. Many baristas were contacted and interviewed by Everett Police detectives.

During interviews, detectives learned that Panico allegedly pressured potential witnesses to not cooperate with police and falsely say they were being represented by an attorney. It was said that Panico also singled out one potential witness and applied pressure for her to change statements made to police. The evidence and testimony established probable cause to arrest Panico.

The investigation into Panico’s operations is ongoing for alleged prostitution and other crimes.