A former Lexington accountant allegedly took part in a sex-trafficking conspiracy in Southern Kentucky that victimized young women addicted to pain pills.
Mark Milslagle, 49, was charged Monday in federal court with conspiring to distribute drugs and conspiring to engage in sex trafficking.
Accused drug dealer Logan Ray Towery, who is charged in a separate case, allegedly provided young women to Milslagle for sex, often delivering them two at a time to him at motels in London or Corbin.
Some of the women told authorities that Towery reeled them into the degrading world of prostitution for pills by giving them free drugs at first, then requiring them to have sex with him — and providing them to Milslagle — to pay off their drug debts.
The women went along because they needed the drugs to keep from getting sick from withdrawal.
For instance, one woman identified in court records as Victim 3 told police she met Towery in 2015 when she was 17, and he gave her two or three oxycodone pain pills at a time.
Later, he started providing her with more pills, and within a few months she got “dope sick” if she didn’t get them.
The woman said Towery then started requiring her to perform sex acts to get the drugs, according to a sworn statement from Todd E. Tremaine, a special agent with the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
In early 2017, Towery set up Victim 3 and another young woman to meet Milsgagle at a motel in London.
Milslagle was supposed to pay each woman $500 for sex, but Towery kept $300 of the other girl’s pay because he had paid for heroin for both women before the date, Victim 3 told Tremaine.
Victim 3 said that was the first time she’d tried heroin. She said the other young woman recommended getting “really high” before the sexual encounter, Tremaine said, presumably to be able to stomach the encounter.
“Victim 3 stated that she shot up heroin in Milslagle’s s hotel bathroom before every encounter,” Tremaine reported in his affidavit. “Victim 3 stated that she passed out during sex with Milslagle and was in and out of consciousness during all their encounters.”
Milslagle, being held at the Laurel County Correctional Center, was scheduled for an initial court appearance Tuesday.
His attorney declined comment.
State records list Milslagle as the agent for MJM Tax and Accounting Services LLC in Lexington, as well as the manager for two business consulting services and the registered agent for several businesses.
He was the registered agent until earlier this year for a coal company called Mark Energy LLC, which acquired some assets from the bankrupt Blackjewel company.
Blackjewel, which caused a good deal of consternation in southeast Kentucky and nearby areas of Appalachia by issuing cold checks to hundreds of employees when it filed for bankruptcy last summer, published a notice Aug. 28 in The Mountain Eagle, Letcher County’s newspaper, that it planned to transfer the permit to a mine to Mark Energy.
The Kentucky State Board of Accountancy revoked Milslagle’s individual license in 2010 after he admitted he stole checks from a client because he was having financial trouble, according to an order from the board.
Milslagle was charged in that case with forgery and theft, but pleaded guilty to a reduced misdemeanor charge of attempted forgery and was sentenced to 360 days of supervised probation, according to the board order.
Tremaine said he received information in the fall of 2018 that Towery, of Laurel County, was using Facebook to arrange for young women to engage in prostitution with clients of Towery’s.
After Towery was arrested, he told Tremaine that Milsgagle was his biggest customer. Towery described him as a former certified public accountant from Lexington.
Towery said Milslagle started “buying women” from Towery through a web site that advertised prostitution services.
Towery said that after federal authorities shut down the site, Milslagle dealt with him directly, paying him $100 for each girl delivered and paying for the pills Towery gave them, according to Tremaine’s affidavit.
Milslagle knew the women were drug addicts; one of the first ones that Towery provided to Milslagle died of a drug overdose in Corbin in 2018, according to the affidavit.
Towery and Milslagle texted each other to set up meetings and discussed the young women in crude terms, according to messages included in the federal affidavit.
Towery has been indicted on charges of conspiring to engage in sex trafficking in Whitley, Knox, Laurel, Rockcastle and Fayette counties; conspiring to distribute drugs; and possessing a gun in connection with a drug crime.
There are two men charged with him in that case in the drug conspiracy, Albert D. Davis of Knox County and Gary Cupp of Williamsburg.
Towery told authorities that he supplied pills to Davis and that Davis would befriend a woman, give her pills until she was hooked and in debt to him, then tell her “it was time to pay” by taking part in sexual acts with him, according to a federal affidavit.
Towery, Davis and Cup have pleaded not guilty in that case.