New details have emerged that shed light on how a respected former NYPD detective became the alleged leader of a massive prostitution game after a bitter divorce.
Ludwig Paz, 51, and his second wife Arelis Peralta, 43, of Queens, New York, were indicted Thursday along with seven NYPD officers on active duty and 40 others.
Prosecutors say they had a prostitution network that consisted of brothels in Brooklyn, Queens and Long Island, and illegal gambling halls tucked away in beauty parlors, using the proceeds to fund a lavish lifestyle filled with expensive cars and South American vacations.
He was a far cry from the days of Paz as a fresh-faced patrolman in force, whom he joined in 1990 as a beat cop who worked at Precinct 84 in Brooklyn Heights.
Ludwig Paz, 51, and his second wife, Arelis Peralta, of Queens, New York, were accused on Thursday of allegedly running, playing and prostituting themselves.
It is said that the couple won $ 2 million of the plan for a year. They are photographed on a tropical vacation
Paz, a native of Ecuador, often mocked his stature as a NYPD rookie.
"They bothered him because he was short, and he did not look like other Latinos in Puerto Rico or the Dominican Republic," a former supervisor told the New York Post.
"They said," What, you worked at a pizza place before this? "Then he developed a quick wit, he gave it back to them, and at work he quickly learned."
After her promotion to detective in the Vice Brigade, Paz had ample opportunities to learn the ins and outs of the sordid world of illegal gambling and prostitution.
He had at least one son with his wife Sonia when, in 2007, he sued him for divorce, according to court records.
Paz contested the filing and the divorce became ugly, until a judge ordered him to pay "child medical support" in a 2008 order that ended the division.
The city takes automatic deductions from alimony and child support from pay checks for employees who divorce, and soon Paz would have seen a big bite of her income.
Paz (above) went through a divorce in 2008 and a former supervisor says she had trouble getting to the end of the month after deducting alimony and alimony from her paychecks.
You see Paz's second wife, Arelis Peralta, posing with a Range Rover in this picture taken in Brooklyn, just a few blocks from the police precinct where Paz began his career in 1990.
Paz fought to make ends meet, looking for parallel performances with little luck. "I was tied up," said the former boss.
He applied for Chapter 13 Bankruptcy in 2009, but ultimately did not get relief when he missed a deadline to submit additional documentation.
Paz retired from the NYPD in 2010, and it is not clear when he remarried with Arelis Peralta.
The police were informed for the first time to the criminal enterprise in 2015, when someone from the force alerted investigators who suspected that someone involved in illegal activities was in talks with a member of the Vice Division.
The investigation proceeded slowly due to the need for absolute secrecy, to prevent corrupt cops from discovering that the operation was under scrutiny.
Prosecutors said Paz used his internal connections to obtain information before raids on any of the seven brothels he allegedly ran: one of them was a dirty apartment in Bedford-Stuyvesant furnished only with a mattress and a red bulb on his head.
He also subjected prospective clients to a selection process that he knew would eliminate undercovers, causing them to drop their pants and be subjected to genital caresses before allowing any transaction, prosecutors said.
Peralta is seen earlier this year on his 43th birthday on a tropical vacation in Colombia
Peralta used to travel on vacation, according to the photos of his social networks
Investigators say that Paz gave active duty police officers a high discount on their brothels, in exchange for protection from the investigation.
The brothels charged clients $ 40 for 15 minutes of sexual activity and $ 160 per hour.
Arisbel (above) is accused of conspiracy and crime of business corruption
Prosecutors say Paz y Peralta raised $ 2 million over the course of 13 months from August 2016 to September 2017.
The profits of the company supposedly went to fund a luxurious lifestyle for Paz and his wife Peralta in recent years.
The photographs of the social networks show them in the South American vacations and in the nightclubs surrounded by bottles of champagne.
Prosecutors say Peralta was involved in the scheme, and faces a charge of corporate corruption and dozens of felony charges of gambling promotion.
His two adult daughters, who live with the couple in Ozone Park, were also arrested in the investigation.
The daughters, Jarelis Guzman, 22 and Arisbel Guzman, 20, were released without bail.
Court records show that Arisbel pleaded not guilty to charges of conspiracy and the crime of business corruption. It is not clear if Jarelis has been accused.
Peralta (center) is seen with his two adult daughters, Jarelis and Arisbel, who were also arrested on Thursday by the police.
The neighbors say that Peralta and his daughters always had designer clothes and they wore designer handbags.
"They had these expensive cars, SUVs and Mercedes, children were parking everywhere, blocking the driveways," a neighbor told The Post.
The luxury cars grew so much that the neighbors complained that there was no place left in the block.
Along with Paz and his wife, seven police officers on active duty were charged in the ring: Rene Samaniego, 43, Sergeant Carlos Cruz, 41, Giovanny Rojas Acosta, 40, Sergeant Cliff Nieves, 37, Steven Nieves, 32, Giancarlo Raspanti and Sergeant Louis Failla.
In total, however, 49 people were accused.
According to police, Peralta (above) and her husband also operated illegal lottery betting services in beauty salons.
In a statement, commissioner James O & Neil of the NYPD assured the public that the officers involved would be dealt with quickly and severely.
"These NYPD officers, who swore to defend ideals bigger than themselves, have ruined their own careers and reputations," said O'Neill.
"More importantly, the great work of tens of thousands of other honest and ethical policemen has diminished."
Paz faces serious accusations of corporate corruption, promotion of prostitution, reward for official misconduct, bribery of a public servant, obstruction of prosecution, promotion of gambling and minor charges of conspiracy.
He pleaded not guilty and is being held at Rikers Island pending bail of $ 250,000 or $ 150,000 bail in cash.
The next peace hearing will be in court on October 30.