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American Express Sues Man Over Charges for Prostitution

March 21, 1989 GMT

BALTIMORE (AP) _ An American Express cardholder apparently trying to give new meaning to the slogan ″Membership has its privileges″ has refused to pay $6,700 in charges he claims he made for an illegal act - hiring prostitutes.

″It is axiomatic that a contract which has as its purpose an underlying illegality cannot be enforced by either of the parties,″ said Thomas Waxter Jr., attorney for Michael Gianakos.

In an affidavit filed in Baltimore Circuit Court, Gianakos said he used his American Express card during July and August 1987 to purchase the services of prostitutes at the Club Pussycat and the Jewel Box in downtown Baltimore.


The bills submitted to American Express showed the charges were for champagne.

″If he’s right, everyone is going to be lined up on The Block (the city’s red-light district) with their charge cards in their hands,″ said Sidney Friedman, a Baltimore attorney representing American Express.

Bartenders at the two establishments denied Gianakos’ claims, and it was not immediately clear how he could prove them.

″I don’t know if he was in any other places, but he wasn’t in here because we don’t have prostitution,″ a bartender at the Club Pussycat who declined to give his name said Monday. Down the street at the Jewel Box, another bartender also denied prostitution took place at the bar.

″Absolutely not. Not in this bar, anyway,″ he said.

The court papers say American Express permitted clubs to accept charges from Gianakos, resulting in unpaid charges of $6,716.92.

But in his sworn statement, Gianakos said, ″The use of my American Express card was for the purchase of the services of prostitutes, which is illegal in the state of Maryland.″

Asked if Gianakos could get into legal trouble for his claim about the services purchased, Waxter said Friday, ″I don’t think so.″

The Maryland Court of Appeals has ruled several times that contracts based on illegal sexual acts are unenforceable.

Waxter said American Express is responsible for deciding what businesses can accept its credit card.

″American Express sends out sales people. Those people and the company make a judgment about who’s going to get a card. The place is called the Pussycat Club - they had to know what kind of business it was.″

Friedman declined to discuss American Express’ strategy in the case.