Ex-brothel madam turned county commissioner sentenced to prison

Scott Sonner

Wednesday, April 5, 2000 | 9:42 a.m.

RENO, Nev. - An ex-brothel madam and county commissioner has been sentenced to nearly four years in prison for her role in a racketeering and money laundering scheme at the Mustang Ranch.

U.S. District Judge Howard McKibben said he took into consideration Shirley Colletti's public service to Storey County in imposing the 46-month sentence, instead of the maximum 57 months.

"It did appear during some of the testimony you had performed some good deeds as far as the county is concerned," he said Monday at sentencing.

Colletti, 63, insisted she was unaware of any illegal activity at the Mustang Ranch, a legal house of prostitution in the county just east of Reno.

"I'm devastated because I'm standing here before you and I've never done anything wrong. If I'd known it was wrong, I would never have done it," Colletti said.

"I'd have never done anything that goes against my being a county commissioner. It's too important," she said.

But McKibben didn't buy it.

"There is little doubt in my mind that she knew what was going on," the judge said.

"It was an elaborate plan to defraud the United States government of income," he said, ordering her to forfeit $220,000 and report to prison June 5.

Her lawyers said they will appeal her conviction and sentence to the U.S. Court of Appeals in San Francisco.

Federal prosecutors said Colletti and others conspired to conceal that they were operating the Mustang Ranch as a front for former brothel owner Joseph Conforte, a fugitive FBI agents think is hiding in South America.

They said she wired payments overseas and remained on the payroll as a consultant to the Mustang Ranch while serving as a county commissioner so she could benefit the brothel.

Colletti's lawyers said she was duped into helping Conforte and pointed to her record of helping the community.

"Ms. Colletti has devoted herself to public service and for far more reason than just the Mustang brothel," lawyer David Houston said.

"Ms. Colletti did not have to do 90 percent of what she did as a county commissioner simply to do the bidding of Joseph Conforte," he said.

Colletti helped to create a fire station, a senior citizen's and day-care center, "additional sheriff's office so the people could be served by law enforcement.

"She established an elementary school, a first in the school district," he said.

McKibben agreed to some leniency because of her public service but rejected arguments by Colletti's lawyers that she deserved an additional break because of a heart condition.

McKibben ordered two of the dummy corporations that prosecutors said served as fronts for Conforte - A.G.E. Corp. and A.G.E. Enterprises Inc. - to forfeit $40 million to the federal government.

The judge tentatively set a May hearing on whether the companies must forfeit the Mustang Ranch to the government. Federal agents padlocked the brothel in August.

Two other people have been convicted in the case.

Peter Perry, former lawyer for Conforte and the brothel, pleaded guilty to a single count of wire fraud and aiding and abetting others in the crimes. He was ordered to serve six months in a halfway house, six months and a day in home confinement, 100 hours of community service and to pay a $20,000 fine.

Joanne Olcese, the brothel's former bookkeeper, was sentenced to six months of home confinement, three years on probation and fined $7,500. She pleaded guilty to participating in a racketeering enterprise.

McKibben said they received lighter sentences partly because they cooperated with prosecutors, while Colletti did not.