Oct. 16 (Bloomberg) -- A New York woman once employed in the hedge fund industry pleaded guilty to promoting prostitution and will be sentenced to three months in jail under a deal with prosecutors.

Kristin Davis, 32, had been accused of operating a $2 million-a-year high-end prostitution ring out of New York, California and Pennsylvania that charged as much as several thousand dollars an hour.

Davis pleaded guilty today before state court Judge Thomas Farber in Manhattan. Davis forfeited $476,000 and waived her right to appeal. Davis, who has already served her three-month sentence, will be on probation for five years. Money laundering charges against her were dropped.

Davis ran an efficient, computerized operation and took cash or credit cards using such shell corporations as Davis Investments LLC, Tyler Consulting Partners and Abacus Transportation Ltd., prosecutors said. The corporations all pleaded guilty today to money laundering.

Using Web sites and print media, Davis advertised prostitutes under such pretenses as escorts and massage and concierge services, according to court papers. Davis operated under such names as Wicked Models and Maison de L'Amour.

Davis's lawyer, Daniel Hochheiser, didn't immediately return a call seeking comment. Davis is scheduled to be sentenced Dec. 4.

Spitzer Resignation

High-priced call girl services became big news in New York after then-Governor Eliot Spitzer was identified as a client of the Emperors Club VIP, which federal prosecutors called an international prostitution ring. Spitzer resigned in March. Davis's former lawyer, Mark Hay Heller, has said Davis believes she was prosecuted because of the Spitzer scandal.

Davis worked in hedge fund servicing jobs since the 1990s.

Prosecutors said bank records showed that since March 1, 2007, Davis's ring had grossed about $2 million, and that it had been operating since at least 2004. Davis admitted today she ran a house of prostitution from March 1, 2007, through March 19, 2008.

Assistant Manhattan District Attorney Artie McConnell has said Davis tried to shop her story to the media, claiming she grossed $6 million a year.

McConnell has said Davis sent money out of the country, notably to the Isle of Man, a tax haven, in the U.K.

Davis was originally charged with two counts of second- degree money laundering and one count of promoting prostitution in the third degree.

The case is People v. Kristin Davis, New York State Supreme Court (Manhattan).

To contact the reporter on this story: Karen Freifeld in New York State Supreme Court in Manhattan at kfreifeld@bloomberg.net.

Last Updated: October 16, 2008 18:55 EDT