The five people arrested as a result of yesterday’s 30-count indictment on charges ranging from racketeering to obscenity have been released on bonds pending their next hearing, which has not yet been scheduled. Two more individuals mentioned in the indictment are still at large.
John Kenneth Coil and his family turned themselves in, as did business associate Curtis Wayne Castro, when the indictment was unsealed yesterday. They were released and are awaiting a date for their preliminary trial. Their lawyer John Sweeney had no comment regarding the case.
Coil and his co-defendants are accused of owning and operating numerous adult bookstores and arcades that sold and distributed "obscene, lewd and lascivious" materials that crossed state lines and depict incest, sado-masochism and child exploitation.
Coil’s wife Patricia, his son John, his daughter Katherine Dagnino and Curtis Wayne Castro of Dallas, a business associate and employee, are named as co-defendants in the indictment. Coil and his family turned themselves in earlier today, as did Castro.
The indictment comes from a five-year probe conducted by the IRS Criminal Investigation, the Dallas County District Attorney’s office and the U.S. Bureau of Immigration and Customs Enforcement.
Charles Phelps Jr., 47, San Juan; and his son, both of San Juan are also named in the indictment and are still at large.
Charles Phelps Jr., also known as “Mr. D” or “Dave Smith”, is charged with two RICO counts, one count of conspiracy to defraud the IRS, five counts of importation of obscene material, five counts of interstate transportation of obscene material and five counts of engaging in the business of selling or transferring obscene material and four counts of mail fraud.
Charles Joseph Phelps, 22, is charged with one count of conspiracy to defraud the IRS.
The indictment alleges the owners never paid taxes on millions of dollars in income.
"This is only a piece of this case," said Vincent Klink, resident agent in charge of the bureau's Austin office, where the investigation is centered, told the News-Express. "There are 100 subjects (under investigation). There will be an additional indictment and additional defendants."
For the last month, Coil, known to answer his own phones, has been unavailable. A John Coil listed in Lewisville, Texas
Three stores that Coil owns that operate under the generic name Adult Video, located near access ramps, are subject to criminal forfeiture laws, though the reason why is not yet established. Those stores are located at 4828 Loop 410 N.W.; 3310 N. Interstate 35; 9911 N. Interstate 35 in the San Antonio area.
Word of the indictment had yet to reach staff at the retail stores. "As far as I know, everything is okay," a clerk who refused to give his name told AVN.com Employees at all of the Adult Video stores claimed to be unaware that they worked for Coil, and had no contact information for reaching supervisors.
The stores, described as small, sell adult videos, novelties, magazines and more. None of the employees were aware of
A & Kola Inc., Arcadia Enterprises Inc., B.A.P. Inc., Crystal Cinema, Dee and Dee Enterprises Inc., Rex Temple Inc., and Sun Development Inc are names that corporations that Coil owns that are believed to represent his stores. Coil is believed to have a few stores under each corporation.
