Attorney General Becerra Announces Criminal Charges in Alleged North Hollywood Prostitution Operation

LOS ANGELES – California Attorney General Xavier Becerra today announced the filing of charges against Karine Michmichian, Dwight Cunningham, and Derek Hay for the alleged operation of an illegal prostitution scheme. The defendants have been charged with 12 felony counts of pimping and pandering. Michmichian and Cunningham allegedly worked through a company called The Luxury Companion to procure women for the purpose of prostitution from Hay’s pornography talent agency, LA Direct Models. Cunningham was arrested in North Hollywood on Wednesday, March 4, 2020. His arraignment is currently scheduled to take place today, March 5, 2020, at Department 30 of the Clara Shortridge Foltz Criminal Justice Center in downtown Los Angeles. Michmichian and Hay are not yet in custody and a warrant has been issued for their arrests. 

“Exploiting young women takes a cold, hollow heart,” said Attorney General Becerra. “With the #MeToo movement, more and more women are courageously stepping forward and shining light on abuses perpetrated by people in positions of power. At the California Department of Justice, we welcome their voices and will use our authority to hold those involved in criminal, exploitive activity accountable.”

The complaint, filed with the Los Angeles County Superior Court, alleges that the defendants committed the felonies from 2017 through 2018. The charges and arrest announced today are the result of an investigation conducted by special agents with the California Department of Justice’s Division of Law Enforcement. Per the complaint, Hay allegedly introduced female clients to Michmichian and Cunningham, the alleged owners of The Luxury Companion, for the purpose of prostitution. Michmichian and Cunningham allegedly set up hundreds of sex appointments in exchange for a cut of the money. They also allegedly instructed the women on how to operate, including by telling them to secure payment ahead of sexual encounters. In at least one case, to entice models to work with them, Michmichian and Cunningham allegedly promised to secure a film shoot with a well-known producer of pornography films. In another instance, Hay allegedly pressured one of his female clients into prostitution by using exclusivity provisions in one of his contracts to limit her access to work in pornography films. Bail for Michmichian, Cunningham, and Hay is currently set at $175,000, $105,000 and $70,000 respectively. Cunningham is currently being held by the Los Angeles County Sheriff’s Department.

If you believe you have been a victim of misconduct related to anyone who may be involved in this case, please call the case hotline at (323) 765-2099.

Today’s announcement builds on Attorney General Becerra’s ongoing commitment to combat criminal activity and end the exploitation of vulnerable populations in and around California. Earlier this year, Attorney General Becerra filed a criminal complaint against a former Transportation Security Agent for allegedly using fraud or deceit to falsely imprison a woman going through security at the Los Angeles International Airport. Last year, the Attorney General filed multiple charges against an organized crime ring operating across the state for alleged felonies involving sex trafficking, tax fraud, and money laundering. In 2018, Attorney General Becerra announced the seizure and shutdown of the world’s largest online brothel, Backpage.com. He also charged the operators of Rainbow Bright, a California adult residential and childcare company, with dozens of criminal counts for alleged human trafficking and labor-related violations.

It is important to note that criminal charges are only allegations against a person. Every defendant is presumed innocent unless or until proven guilty.