LOS ANGELES—On Friday morning, adult industry talent agent and LA Direct agency owner Derek Hay was sentenced to 270 days in county jail and two years probation for his guilty plea on two counts in what the State of California called a “prostitution racket.”
Hay, who appeared in court with his attorney for sentencing, wore a black sweatshirt and jeans and showed no emotion as he was led away to immediately begin his jail sentence.
In late May, Hay pleaded guilty to two felony counts of perjury and conspiracy to commit pandering as part of a plea agreement in the case against him and the two co-defendants originally brought in 2020 by then-California Attorney General Xavier Becerra.
A total of 12 felony counts were initially filed against Hay and his co-defendants, but current California AG Rob Bonta secured a new grand jury indictment in September of 2022 that brought more charges, including counts of pimping, pandering, conspiracy, money laundering and perjury. Hay was arraigned on the grand jury indictment in March 2023.
Five actresses involved in the case, referred to as the “Jane Does,” originally accused Hay and his agency LA Direct of labor code violations in 2018 via a complaint filed on their behalf by attorney Allan Gelbard before the California Labor Commissioner's Office. The labor hearings stretched throughout 2019, and in 2020, Labor Commissioner hearing officer Patricia Salazar found for the five models, ruling that Hay violated the law when he withheld commission payments to the performers. Hay was ordered to pay back the commissions, including attorney fees and court costs. Hay's attorney, Richard Freeman, told AVN at the time that he immediately filed an appeal for trial de novo in the Los Angeles Superior Court.
Eventually identifying themselves, all five models—Charlotte Cross, Shay Evans, Sofi Ryan, Andi Rye and Hadley Viscara—appeared at a July 17 sentencing hearing under their performing names to testify in the penalty phase of the proceedings. In addition, an impact statement was read on behalf of onetime adult performer Bobbi Dylan.
Unable to complete sentencing at the July 17 hearing, Judge Charmaine F. Olmeda this morning cautioned lawyers to be brief with any additional exhibits or arguments, having already spent a day on witness impact statements and closing arguments at the July hearing.
Regarding Hay, State Attorney Jeffrey Segal asked the court for the maximum penalty—six years in state prison followed by probation. He cited Hay’s violation of fiduciary duty with the use of a state-issued license to perpetrate a criminal enterprise.
Segal also revealed to the court that Hay had successfully applied to legally change his name to “Andrew Gallagher” in August 2022, one month before the original indictment in the case was filed in September of that year. The timing of the name change, as well as Hay’s status as a resident of Nevada, created significant concerns for compliance with any probation orders issued in California, Segal said. Hay’s “also known as” moniker was added to the record by the court, while Hay’s attorney stated that he had not been aware of the name change previously.
The state attorney also pointed out that Hay had deliberately perjured himself under direct examination by his attorney Freeman, and that the court should take into consideration Hay’s “dishonesty and lack of remorse.”
Segal added that no contact orders against defendants should be issued to protect the witnesses, who feared retribution and harassment. He noted also that the co-defendant in the case who was sentenced separately on August 26, received a sentence of 270 days in county jail with probation, and was “out by Sunday” due to jail overcrowding. Segal recommended to the court that if Hay were to be released early on probation, a more appropriate sentence would be to allow Hay to serve his sentence with a period of community service, so that he might experience some form of punishment.
The court recognized his statement and noted that early release due to jail overcrowding was outside of its purview.
Freeman made a short statement on Hay’s behalf and said that Hay stood before the court, in full acknowledgment of the offenses to which he’d pleaded guilty and that he accepted responsibility for his actions. However, regarding additional accusations made against his client, Freeman reiterated that Hay was not guilty of other charges made in the case and that his involvement with the witnesses had been minimal, all of which should be taken into consideration during sentencing.
Hay’s co-defendant who was sentenced this morning received six years in state prison on all counts, to be served concurrently. The judge noted the sentence was subject to California’s “three strikes” legislation since the co-defendant had been charged with a felony in 2016, and was on probation when the current offenses were committed. The state had asked the court to impose a maximum sentence of 18 years, citing the previous conviction.
Hay and his co-defendants are also facing a civil suit on behalf of the “Jane Doe” victims. The only Jane Doe in court this morning to witness sentencing was Hadley Viscara.
She told AVN, “It’s been six years of emotional turmoil for me, and Derek Hay got 270 days in jail. He will never understand what he put me through—but I hope he forgives himself. I have, but he still needs to pay for his crimes.”
She added that she felt pity for him.
UPDATE (4:18 p.m.): Attorney Gelbard, who also attended this morning’s hearing, was asked about the significance of today’s sentencing.
“It should let performers know that when their agents break the law, there will be a price to pay. We do believe the sentence is light, but the Judge, who usually handles murder trials and gang cases, didn’t see this as deserving of a harsher sentence. But even if Derek Hay (aka Andrew Gallagher) gets out in a few weeks, he’ll be on probation for several years and he’s now going to live his life as a convicted felon. Obviously, I expect his talent agency license to be revoked very quickly.”
As to whether he expects Hay to be released early from county jail due to overcrowding, as one of his co-defendants reportedly has been, Gelbard said, “Overcrowding is a serious issue that involves constitutional issues as well as basic humanity. There are too many criminals and only so many jail cells. The sheriff’s department has to choose between releasing murderers or lesser-grade criminals. It seems reasonable that non-violent criminals would be released to make room for more dangerous individuals. So, I wouldn’t be surprised if he serves way less than the 270-day sentence he’s received.”
Regarding the still pending civil case against Hay and his co-defendants, Gelbard commented, “The judge in the civil case has been apprised of the recent developments and has asked that we file a renewed Motion for Summary Judgement. I’ll be filing that motion shortly. The guilty plea, while obviously significant, isn’t the only recent major development in my clients’ favor. Several new cases have held that agents using unapproved contracts and charging fees not on the approved fee schedule—including booking fees—is unlawful. The Labor Commission has disapproved of a line of cases that Hay’s attorney has been arguing allowed for booking fees.”
He added, "There are multiple findings of fact and conclusions of law regarding Direct Model’s illegal activities including their use of unapproved contracts, charging fees not on the approved Schedule, and sending their performers to unsafe jobs that appear to be dispositive as to several causes of action in our case. We obtained Direct Model’s accounting files which have been examined by our forensic accountant, which show that they altered their records, trying to evade liability."
AVN has also sought comment from Freeman, Hay's attorney, regarding the possible impact of today's sentencing on the forthcoming civil trial, but had received none as of post time. This story will be updated when and if any such comment is received.
