Prosecutor Luege said these businesses "would not stand on their own. If you shut off the illegal income, the businesses would not survive."
On top of the purchase price, Mao "must have spent $50,000 to $80,000 getting the track ready," said Charles E. Dickens, a jewelry store owner whose cattle graze next to Mao's track. "I know how much it costs to lease the earth-movers and equipment. I'm a businessman. It just didn't make sense to me."
The government, in its indictment and a 74-page search warrant affidavit, alleged that the real source of the money for the tracks were six brothels Mao owned in Southern California, including a tanning and foot salon and a massage parlor in Inglewood, two health clubs in South Gate and a massage parlor in Baldwin Park.
Mao hid her involvement through elaborate fronts, the government alleged. Three others charged with her -- Edward Lutt, Charles E. Fields and Randall Johnson -- posed as owners of the businesses while funneling the bulk of earnings to Mao, according to the affidavit.
All have pleaded not guilty and, along with Mao, are awaiting trial in February.
In 2002, for instance, Randall Johnson, the legal owner of Health Therapy in Baldwin Park, reported making $29,000 in profits, while paying Mao $550,000 in "consulting fees," according to the indictment.
The pattern was repeated by the other businesses, authorities contend. From 2000 to 2005, Mao's firm, ZNC Plaza Inc., received $6.6 million in "royalty payments" or consulting fees from the businesses owned by Lutt, Fields and Johnson, the government alleged.
In 1988, Mao was charged with pimping and conspiracy, and in 1995 she was charged in Los Angeles County with keeping a house of ill fame. Diamond said she was not convicted on any of the charges.
According to a search warrant affidavit filed in the current case, a woman at one of Mao's buildings told an Immigration and Customs Enforcement agent that Mao had confided that she once worked as a prostitute. Diamond denied the allegation.
The lawyer compared Mao's situation to a hypothetical case of vendors at Staples Center selling beer to underage customers. "Should Jerry Buss or Donald Sterling be held responsible?" Diamond asked, referring to the owners of the Lakers and Clippers. "It's possible there was an isolated act of hanky-panky" at Mao's properties, Diamond said, but "that doesn't make the whole enterprise illegal."
Meanwhile, Mao's website, www.mxoasis.com, has announced that her group has been able to "work through" events "better fit for a Hollywood blockbuster" and refocus on the "original vision." Motorcyclists are still gunning around the Palestine track as federal authorities and Mao contest whether the property can be seized as the fruit of the alleged prostitution.
Anderson County Sheriff Greg Taylor and others in Palestine don't care about the particulars of the federal case against Mao, as long as the track is shut down.
"It'll suit me just fine," Taylor said. "My problems will be solved."
