Nader

I. Background

Nader owned and operated a massage studio in Billings, Montana from 1994 to 2004, and another massage studio in Great Falls, Montana from 1993 to 2006. Lake managed the Billings studio and worked for Nader until 2003 or 2004. It is undisputed that the businesses involved prostitution. Card catalogs show that the two businesses had approximately 5000 customers from Montana and at least five other states.2 Many of the prostitution transactions were initiated by a tele- phone call from the customer.

Nader and Lake were indicted for violating 18 U.S.C. §§ 1952 and 2 by using the telephone to carry on a business enterprise involving prostitution in violation of Montana Code Ann. § 45-5-601. The government notified Nader and Lake that it intended to prove that they used a “facility in interstate or foreign commerce” with evidence of only intrastate tele- phone calls. Nader and Lake jointly moved to dismiss the indictment, arguing that their intrastate use of the telephone was not the use of a “facility in interstate or foreign com- merce” under the Travel Act. The district court denied the motion. Nader and Lake pled guilty pursuant to plea agree- ments in which…