A Model Prisoner

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At 6:40 p.m. on April 5, 2002, a police task force made up of local and state law-enforcement agencies swarmed around a single-story cinderblock industrial building on South Federal Boulevard. While their actions -- and cries of "Let's go!" -- were captured on film by news crews from two Denver television stations, the cops used a battering ram to smash open the front door. They rushed in. "Get on the floor!" they shouted to the man and two young women working inside the photography studio.

Outside, other cops handcuffed a man who'd just pulled up in a van and pushed him into the back of a patrol car. It was the owner of the studio, James Grady.

The bust, which received huge play on the news over the following days, was a giant success. Arapahoe County Sheriff Pat Sullivan proclaimed it had apprehended "perhaps the largest child pornography ring in Colorado history."

The case was sexually lurid -- and impossible to resist. The coverage was graphic in the suggestive and titillating manner of media outlets that hint about far more than they can say. 9News's Ward Lucas reported that the man named Jim Grady ran several Web sites featuring live sex acts. "And police say there is reason to believe some of those performers were under the age of eighteen," Lucas intoned on the night of the raid. "His Web site shows a number of pictures of girls, obviously underage, in provocative poses."

The young girls who had been lured into the pornography ring were the victims of a sick mind, Arapahoe County Undersheriff Grayson Robinson suggested. Grady, a 42-year-old Coloradan, had recruited pretty teens between the ages of thirteen and seventeen and "encouraged them to pose in several stages of nudity and expose themselves in a sexually explicit manner," Robinson revealed. The photographs were then posted on a Web site called trueteenbabes.com, available to anyone willing to pay the $20-per-month subscription fee. Thousands of pedophiles had already signed up.

Even worse, Grady -- a convicted criminal, the cops noted -- had deceived the children, preying on their innocence, insecurities and ambitions. "These girls were lured in with thoughts that they'd become real teenage models," said Bob Sexton, an agent for the Colorado Bureau of Investigation. "We may have fifty girls who were sexually exploited in some manner."

The case could have "national and international implications," Robinson warned ominously. "We've only hit the tip of the iceberg in terms of the evidence we've evaluated. I believe this will get much bigger."

It certainly looked that way. By the time they finished combing through Grady's studio, the police had confiscated enough computer and office equipment to fill two rental trucks and two vans. Investigators estimated that the haul included "hundreds of thousands of images," and the amount of filth inside the impounded hard drives was unimaginable.

Within days, prosecutors announced that Grady hadn't merely taken pornographic photos of underage girls; some of the young girls had performed on live "Webcasts," doing God knows what for God knows whom.

Soon police revealed that one of Grady's "models" had accused him of assaulting her by plying her with alcohol during a photo session and then trying to force her to perform sexual acts. Prosecutors demanded that Grady be held on $1.5 million bail.

If there was any doubt of the bust's importance, it was erased on April 11 when the Arapahoe County District Attorney's Office filed a mind-boggling 766 accusations of criminal conduct against Grady. That was "easily close to the most" charges ever filed in the 18th Judicial District, Mike Knight, a spokesman for the DA, told reporters.

Six weeks later, on May 28, prosecutors announced that they'd found more compromising photographs of young girls. Citing these forty obscene pictures, they piled an additional 120 charges on top of Grady, bringing the total to 886. All told, Grady was looking at nearly 8,000 years in prison.

And as the weeks passed, the investigation of the Denver-based child-porn ring appeared to be widening. Through his Web site -- which by now had been shut down -- Grady's reach seemed to have extended far beyond the state's borders. The Colorado Bureau of Investigation contacted cops in Florida, Texas and Nevada. The FBI was said to be getting involved.

While Grady remained in jail, the investigation continued for the better part of a year, with dozens of cops and prosecutors helping out. Finally, the case went to trial on March 3.

And, with astounding speed, it fell completely and totally apart.

Prosecutors had already quietly dropped the number of charges against Grady from the dramatic 886 to a fairly pedestrian 39. But even those didn't stick. One by one, witnesses for the Arapahoe County DA's office turned ambivalent. Grady, they shrugged, really wasn't that bad a guy.

A week later, what had begun as the largest child-porn case in Colorado history was turned over to the jury. One of the jurors' first actions was to send out a note suggesting that they didn't understand the law under which Grady had been charged. And then, after considering more than a year's worth of evidence -- photos and testimony and thousands of pages of documents -- the twelve jurors returned their verdict in less time than it takes to watch most movies.

James Grady, they agreed, was not guilty. Of anything.

A free man for the first time in almost twelve months, Grady had lunch with his lawyers and then went home to live in his mother's basement.

In examining how this massive child-porn ring evaporated into thin air, one thing stands out: how little law-enforcement authorities understood the law. A review of court documents, as well as interviews with legal experts and participants in the case, shows that cops and prosecutors had far more than their share of misinterpretations, misunderstandings and flat-out mistakes. Some may have been intentional.

"They jumped in with both feet, without knowing what they were getting into," says Andrew Contiguglia, one of Grady's lawyers. "They didn't understand the law, and they didn't understand the facts."

When all was said and done, James Grady understood the law better than anyone. Today, despite the fact that he spent a year in jail and lost tens of thousands of dollars of equipment in the police raid, his Web site is back up and running. And it's displaying the exact same photographs that landed him in jail and on the evening news.

James Grady started taking pictures of teenage girls in bathing suits and lingerie for the same uncomplicated reason that Whammo decided to make Frisbees: People were willing to pay for them.

Born in Germany, Grady was adopted by an American Army couple who moved to Colorado in 1965. He graduated from Arapahoe High School in 1977 and, with the exception of a handful of years, has spent the last two and a half decades living within a few blocks of where he grew up.

Grady's first love was fast cars and bikes. A gearhead, he dreamed of becoming a professional motorcycle racer, but he was never quite fast enough and settled for the next best thing: He made sure his work always kept him around fast machines.

He landed in photography by accident. One day he accompanied his girlfriend, a makeup artist, to a photo shoot. It was nothing fancy -- pretty girls in bathing suits leaning against hot cars, the kind of pinup calendar hanging in any garage. "The photographer was a moron," Grady recalls. "He kept saying all the stupid stereotypical things: 'Make love to the camera, baby.' He was an idiot, and so I told my girlfriend, 'I think I could do it better than this guy.'"

The next day, Grady spent $400 on photographic equipment. He dabbled in pictures for the next couple of years, learning the cameras. In mid-1983, he set up his first official photography business: taking pictures of pretty girls in bathing suits leaning against hot cars. The pictures would be made into calendars, and Grady would hustle garages into buying them.

The venture lasted only a couple of months. But in that short time, Grady discovered an important truth: There was no shortage of girls who wanted their pictures taken. "We had way more girls than customers," he remembers. "We placed a few ads in the newspaper for swimsuit and lingerie models, and the phone would ring off the hook."

He turned many would-be models away. "They weren't suited to the work," he says. "Too overweight for the latest bikini, or too old." Many of the women seemed eager to believe that a professional photograph would confirm their beauty in some official way. "They'd beg me to hire them: 'Just put me in poses where my stretch marks don't show,'" he adds. "Over the last several years, I've learned that a lot of girls believe stuff they hear: 'My boyfriend says I should be a model,' or, 'My mom says I should be a model.'"

Grady thinks girls show up for modeling gigs for one of three reasons: money -- "especially nude jobs for college girls"; ego -- "They want to tell their friends they're a model"; or ambition -- "They believe it's a stepping stone to stardom." But, he adds, "for most teens, it's just fun."

Throughout the '80s, Grady started a handful of businesses, all featuring beautiful young women, tiny outfits and photography. He took portfolio shots and charged the girls for them. He promoted bikini contests at car shows; he'd pay the $250 or so first prize, take pictures of the winners and later sell them as posters or calendars. By the end of the decade, he'd also started taking pictures of girls with no clothes on at all.

"It was mostly soft-core, cutesy, topless stuff," he remembers. Much of his work ended up in Japan, or as background for adult phone-sex ads -- "topless girls sitting on a barstool," he says.

During this period, Grady worked with minors only once, when he tried to put together a calendar called "High School Sweethearts." It featured both boys and girls -- four girls in all, two from Colorado and two from Arizona. But he sold only 500 of the 5,000 calendars he printed.

Eventually, Grady's string of bad business ventures exacted a price. While trying to keep them going, he'd written more than a few bad checks. By 1990, the bounced payments caught up with him; in the fall of 1991, he was convicted of forgery. Grady never denied the charges, and was a model prisoner.

"It sucked, but I made the most of it," he says. "I worked in the library and learned all I could about photography and computers and the Internet -- all the nerd books." Though sentenced to sixteen years for bouncing about $16,000 worth of checks, Grady was paroled to a halfway house in late 1994. Soon he gravitated back to what he knew, finding work at a photo-developing lab.

But while Grady was in prison, the entire landscape of photography had been revolutionized by the Internet. Pictures of girls -- especially naked girls -- were a hot commodity. Revealing photos were in demand, and Grady had plenty of them.

"Everyone wanted content," Grady explains. "One site would have 50,000 images, so the next one had to boast of having 60,000. I had tens of thousands of slides, and I just started scanning them and licensing them out." He'd sell them for $2 to $3 each and send out thousands at a time, most of them soft-core shots.

During the day, he continued working at the photo lab. He soon noticed that the adult Web sites he was selling pictures to often took their own photos but then sent the rolls out to get developed -- thousands and thousands of rolls of film. Grady thought he could do it better and cheaper, and he jumped into the market.

Within a month, the small photo shop where he worked was getting more soft-core film than it could develop. "Our machine could handle about four rolls an hour, and we were receiving hundreds per week," Grady recalls.

By the fall of 1996, Grady had started shooting nudie pics again, out of homes and hotel rooms. It was a profitable enterprise. Eager Webmasters would pay Grady $1,500 for ten striptease scenes -- about sixty pictures each. Grady would pay the young women $50 an hour for their time for soft-core, $65 an hour if they spread their legs. He developed the rolls himself, and the rest was profit.

Unfortunately, owning his own business -- and having company credit cards -- was not permitted under Grady's conditions of parole; after all, he hadn't proven trustworthy with cash before. When his parole officer found out that Grady was back in business for himself, his parole was revoked. In the spring of 1997, he went back to jail.

Again, however, Grady proved an easy prisoner, and he was out of lockup within the year. He returned to developing the massive amount of adult film demanded by the exploding Internet market, renting space at local labs and charging a markup to the adult Web sites. And with the help of an accountant friend, over the new few months Grady set up a business properly.

"At this point, I'm forty years old," he explains. "By then you want to own something. I'd tried over the years, and everything else had fallen apart. I wanted to get it right this time."

By the spring of 1999, Grady had his own place, a sprawling 4,000-square-foot studio on South Federal Boulevard in Sheridan that he filled with his own equipment. Advertising in newspapers for "Cute College Girls," he was inundated with would-be models. "I got dozens of calls per week," he remembers. "Many more than I could photograph. Basically, it rocked."

He was forced to hire full-time help just to operate his photo scanner, which ran from 7 a.m. until late into the night. His office became a regular stop on the local Airborne Express route. Although he still had a lot of debt from purchasing the expensive photo-developing machines, he was taking in about $35,000 a month.

It was the best he'd ever done, and with thousands of adult Web sites each promising hundreds of thousands of images, with weekly updates, the market for his product seemed endless.

The models knew exactly what they were getting into. Grady's contract spelled everything out in black and white. The work paid $50 an hour for a striptease sequence showing genitals, $75 an hour if a woman touched herself during the shots, $100 if she used a personal toy, and $125 if the model actually had sex in front of the camera with another man or woman. And once again, he had more women wanting to take off their clothes than he could use. After stripteases, he remembers, "Girls would ask me, 'Can I come back and do more?'"

Sure, it was pornography, but it was legal -- and, in its own way, ethical. "I never wanted to be in a position where I was asking the girls" to do more hardcore shots, Grady explains, "because they photograph better if they're doing what they want to do."

In the summer of 2000, Grady thought it was time to take his business to the next level. The Web sites he supplied were making tons of money from subscribers -- so why didn't he set up his own Web site? After all, he already had the photography and scanning equipment, not to mention a never-ending supply of models.

He knew he was getting into the game late. By then, established sites were boasting more than a million photos each, and Grady couldn't compete with that.

The one thing he didn't see a lot of on the Web, however, were sites showing off pretty young girls. Teenagers, their attractiveness shown off by a skilled glamour photographer -- and "non-nude," in the language of the Web. So that fall, Grady set up his first Web site, teenmodelquest.com, where prospective models could read about what Grady had in mind, send in sample photos and download an information packet for their parents to sign.

Soon Grady bought the domain name trueteenbabes.com. He also hired a full-time assistant and a full-time makeup artist. He printed up recruiting postcards to hand out at functions where cute girls might gather: parties, sports events, cheerleading competitions. He placed ads (including ads in Westword). And then he waited -- but not for long.

"It just kind of took off from there," he says.

You'd need to get pretty close to hell to find the proper resting place for child pornographers. Even the most permissive civil libertarian would have to wrestle with himself to justify the legal right of a person to create images of naked children engaged in sexual acts. And in jail, child pornographers are roundly despised even by other prisoners, as if there's an unspoken understanding that child porn is far beneath other crimes. Graphic images of children engaged in sex are appalling, terrible crimes of exploitation.

Child pornography is considered so universally loathsome, in fact, that it's one of only a handful of types of expression that don't receive automatic protection under the First Amendment. Unlike adult sex images (see "The Eye of the Beholder,"), when it comes to children, there's no legal distinction between "pornographic" and "obscene." There's simply no such thing as legal child porn.

Yet the definition of "child pornography" is not as clear-cut as it might seem.

The term "child," for example, is extremely broad, referring to anybody under the age of eighteen. Nearly everyone can agree that sexualized photos of a five-year-old are an abomination. But what about a sexy seventeen-year-old? After all, it was only two decades ago that federal laws increased the age of an adult from sixteen to eighteen in pornography cases.

Even today, the law still recognizes that older teens can act like official adults in some cases. In Colorado, for example, a sixteen-year-old girl may, with a parent's permission, be legally married. She could even marry at fourteen if a juvenile judge signed off on the union.

And, like it or not, teenage girls can be made to look extremely sexualized. (Britney Spears made a career of it long before she turned eighteen.) Lurking around playgrounds in the hope of catching sight of an elementary-school student's underwear is clearly unacceptable behavior. But is a 25-year-old man who ogles a high school senior -- in person or on a Web page -- really a criminal?

"The politically correct view is, no one should look at someone under the age of eighteen years old and be aroused," says J.D. Obenberger, a Chicago attorney specializing in obscenity laws -- especially those addressing child porn. "But if I had a nickel for all the times a guy driving down the street saw a sixteen-year-old in a tube top with low-cut jeans and a tattoo on her lower back and caused a car accident, I'd have a lot of nickels. He may be thirty years old, but he's not a pervert. Girls dress that way to look hot."

Sexy photos of legally underage teens are common in professional modeling circles, where the transitional ground between innocent child and knowing adult is considered a desirable -- and marketable -- look. "In bigger markets, especially, the fashion industry likes girls very young, thirteen or fourteen," says Frank Martinez, an agent for Denver's Maximum Talent Agency. And the young models are expected to pose in more -- or less -- than pinafores.

"We don't do a lot of sexy stuff here in Denver," Martinez adds. "But girls who want to go to New York or Europe, it's a lot sexier. Nudity is expected. It's not always healthy -- they tell the girls, 'If you don't do this, somebody else will.' But it's the way the business works."

By the time Brooke Shields appeared topless in an advertising campaign for Guess? jeans, she was already an old hand at going without clothes in front of the camera. At the age of twelve, she appeared completely naked in Pretty Baby, a movie about prostitution in New Orleans at the turn of the last century. Shields's appearance in that film was described as art.

British photographer David Hamilton has made a career of taking pictures of naked girls in the name of art, too. His 1995 book, The Age of Innocence, consists almost entirely of photos of completely nude adolescents. Printed underneath the photos are quotes from famous literature. But are fancy words and high-minded ideas the only things that distinguish art from child pornography?

Over the years, people have struggled to define what distinguishes obscenity from innocence, kiddie porn from art.

The first crucial legal distinction was made more than twenty years ago, when the U.S. Supreme Court upheld the conviction of a New York City adult-store owner busted for selling movies of young boys masturbating. The judges agreed that when it comes to children, certain images -- masturbation, bestiality, actual or simulated intercourse, or "lewd exhibition of the genitals" -- should automatically be against the law.

But what, exactly, do vague words like "lewd" and "lascivious" mean?

In 1986, a California judge came up with five simple tests that he said separated a legal image from an illegal one. Each of the tests was designed to preserve childhood innocence -- while taking to task those who would exploit it. When children appear naked in pictures, the judge said, the viewer needs to ask: Is the focal point of the photo on the child's genitals or pubic area? Is the setting of the photo "sexually suggestive?" Is the child depicted in an "unnatural pose, or in inappropriate attire, considering age?" Does the picture suggest "sexual coyness or willingness to engage in sexual activity?" And, finally, is the picture "designed to elicit sexual response in the viewer"?

Today, nearly two decades later, these questions are still considered the legal standard. But even these tests don't apply to all situations. In one case, a judge determined that, even though the young girls shown were wearing clothes, the words "pubic area" could apply to the "uppermost portion of the inner thigh."

The idea of a one-size-fits-all definition of "sexual response" is also complicated. "One person's erotica is another person's belly laugh," Obenberger points out. "As a former thirteen-year-old, I can tell you that if I was desperate enough and there was nothing else in the house, National Geographic always worked great to jack off to. In the end, people will be aroused by whatever's available; you get your sexual kicks where you can. In Muslim countries, a guy will go wild if a girl shows her eyes."

There are even some situations when taking a photo of a naked teenage girl specifically to get aroused may not be wrong, either. "When I was seventeen, I took pictures of my girlfriend, and she was pretty fucking hot," Obenberger notes. "And I definitely did it for sexual gratification; I liked having a cute girlfriend. Does that make me a criminal?"

Most child-porn laws are also based on the assumption that a child is being abused, or at the very least exploited, when he or she appears in a pornographic image. As Colorado's law states: "The sexual exploitation of children constitutes a wrongful invasion of the child's right of privacy and results in social, developmental and emotional injury to the child." This is why the mere possession of a single piece of child porn is illegal. But what if no child is hurt?

In fact, what if there is no child? In 1996, Congress passed the Child Pornography Prevention Act, specifically to prohibit the use of computer-generated pornographic images designed to look like real children. Although no one child was being abused, proponents claimed the dirty pictures -- even if fake -- could incite a pedophile to commit a crime against a child.

In April 2002, however, the Supreme Court concluded that the law was unconstitutional. Not only could there be no child abuse if there was no real child, the justices decided, but trying to guess, and then regulate what some anonymous viewer might think of a picture was perilous legal territory. "There are many things innocent . . .such as cartoons, video games and candy, that might be used for immoral purposes, yet we would not expect those to be prohibited because they can be misused," Justice Anthony Kennedy wrote.

And that's the biggest conundrum with modern child-porn laws, critics say. Trying to guess and then prohibit what pedophiles themselves might find erotic forces everyone to think like a pervert. After all, certain pedophiles could easily find enough sex to satisfy them in a Sears catalogue.

Or on an innocent billboard. In 1999, Calvin Klein launched an advertising campaign for his new line of children's underwear. One ad showed two toddler-aged boys jumping on a sofa in their underwear. The picture ran in newspapers, as well as on a huge billboard in Times Square. There was an immediate uproar. One newspaper referred to the pictures as "provocative ads, featuring semi-nude kids." Calvin Klein removed the billboard the next day.

"I went back and looked at the pictures," New York University School of Law Professor Amy Adler wrote in a law journal article. "One of the little boys' underpants seem baggy as he jumps in midair. Is that an outline of his genitals, I wondered? It was then, as I scrutinized the picture of the five-year-old's underwear, that I realized I was participating in...a world created and compelled by child pornography."

Jennifer was the first trueteenbabe hired to appear on Jim Grady's new Web site. "I met Jim through an ex-boyfriend's friend; she gave me a flier," Jennifer recalls. It turned out she lived six houses from Grady's mother.

Jennifer, then seventeen, filled out the on-line application and sent in a picture of herself. She printed out the parental permission form and gave it to her mother and father to look over.

Recognizing that the parents' approval was essential to the success of his idea, Grady had been thorough. The ten-page permission package described everything from Grady's business plan to the process by which a girl would be hired and her pictures posted on the Web site to how she would be paid.

"Each of the models is paid $10.00 per hour while planning the shots, being fit to outfits and having their hair and makeup done. They are then paid $50.00 per hour during the actual shooting time, typically 4-5 hours per girl. If the model is selected for a second photo session, she is paid $65 per hour during that second session," the form read.

"Girls that travel from outside the Las Vegas or Denver areas for studio work, or from more than 100 miles away for 'On Location' work will have all their travel expenses, hotel expenses and meal expenses paid. A parent or guardian must accompany girls that are under the age of sixteen, and trueteenbabes.com will also pay those expenses."

The packet explained that the photos and all the rights to them belonged to Grady -- a standard clause for photographers. And for any parent who took the time to read the information, Grady's permission package also included very specific descriptions of the photos he would be taking:

"The girls will be featured in a series of non-nude photographs that are produced to flatter and enhance her physical beauty, as well as showcase her personality. Make no mistake: The images we are planning will be high-quality, classy and personable, but also a bit on the 'Sexy' side. Simply put -- If the model has long shapely legs, we'll hope to photograph her in the shortest mini-skirts or shorts she is comfortable with. If she happens to have an above average bustline, we'll hope to feature her in bikini or tank tops that flatter that feature. The photographs will be non-nude, but they will be somewhat daring!"

Jennifer's parents signed. "They were excited for me," she recalls. "They had no problem with it." Her parents are more the "hands-off" type, she says; still, Jennifer's mother and father both visited Grady's studio to check it out.

The first time she showed up for a photo shoot, Jennifer says, "I was nervous. But Jimmy's a nice guy, and everyone there was really great to me." Karina, the woman Grady had hired to buy and select outfits, helped her choose something to wear and do her makeup; Jennifer posed for a couple of sets of pictures.

She liked the work and went back many times over the next year. "It was so much fun, and the pay was good," Jennifer says. "And Jimmy never said anything inappropriate to me. He and Karina would always say, 'If you don't feel comfortable in anything, you don't have to wear it.' We usually picked our own outfits."

The outfits were definitely skimpy; Jennifer and the others posed in bikinis, lingerie, extremely short shorts and thongs. Some girls wore sheer shirts. But Grady always seemed aware of when a line had been crossed. "There were a couple of times when he took pictures of me where the clothes had hiked up too high," Jennifer recalls. "Jimmy showed them to me and said they wouldn't be posted on the Web site."

Eventually, Jennifer started working for Grady behind the scenes, helping other teenage models get dressed and made up. She also helped run trueteenbabes' live Webcasts, where subscribers could log onto the site and exchange e-mails with the girls in real time. The girls wore outfits they'd posed in, and a Web camera filmed them during the chat.

Although the girls didn't know who was watching them, Jennifer says the Webcasts were "a blast." One of her jobs was to monitor what was being said to the girls. "If anyone ever said anything that offended us, or was more than PG-13, they'd get booted off the chat," she says. "If someone asked us to take our clothes off, we'd warn them. If it happened a second time, they'd get booted."

"It was really relaxed," adds Alia, another model. "There was always someone else there, always very professional. All Jimmy did was basically stand behind the camera. I never felt uncomfortable -- never felt anything out of the ordinary."

"It was fun," remembers Karina, Grady's assistant. "We had so many different outfits to choose from, the girls were able to select what they wanted to wear. Half the time the parents were in the room picking out the outfits. The girls absolutely loved it. I don't think I ever had a girl not have a good time."

And yet again, Grady had no problem finding people to pose in front of his lens. He received thousands of applications, usually online, from girls eager to pose for pictures. Many sent racy Polaroids.

If something seemed wrong, Grady tried to check it out. In one instance, he remembers, a young girl showed up at his studio with a guy she introduced as her brother. Grady called her home number: It turned out her parents had no idea what she was doing.

She wasn't alone in trying to keep her parents in the dark. But there were just as many girls whose parents seemed over-involved. "I had several girls whose parents applied for them," Grady says. "One mom lied about her daughter's age -- she was only twelve -- to get her signed up."

Grady did his first trueteenbabes photo shoots in January 2001. In February, he took his studio on the road, spending a week shooting pictures of girls who'd applied from Florida. Two months later, he and his assistants and equipment flew to Laguna Beach, California, and did it again.

Trueteenbabes.com opened for business on July 1, 2001. Grady signed up 25 subscribers the first day. By Thanksgiving of that year, he had more than 2,000 paying customers.

Although police later claimed that Grady was making hundreds of thousands of dollars from the site, he says that at the height of trueteenbabes.com's popularity, his net profit was closer to a modest $2,000 a month. Given the hefty costs -- paying for models, equipment, employee wages, mortgage payments and so on -- Web businesses aren't as prosperous as they can seem, Grady notes.

Grady's billing service, for example, took 13 percent of the subscription fees off the top. He also paid a finder's fee to other Web sites, a common arrangement on the Internet. An "affiliate" would post an advertising banner for trueteenbabes.com on its site; if someone clicked on the banner, was routed to Grady's site and then decided to join, the owner of the first Web site received 30 percent of the subscription fee.

As trueteenbabes became more popular, Grady began to cut back on his adult porn work. He didn't have enough time to do both, and he liked working with the teenagers better. "They're more fun," he says. "They smile. It's more fun than taking another picture of a 21-year-old with her legs spread. Anymore, that's like herding cattle."

Because the Internet permits Web masters to keep an electronic record of every subscriber and person who logs onto their sites, Grady knew exactly who his customers were. Though he'd set up trueteenbabes for high school- and college-aged men, he quickly discovered that his average subscriber was closer to 29.

That didn't alarm him, though. Grady considered the men who logged on no different from the men watching girls on a crowded street. "It's like going to Park Meadows mall," he says. "Not everyone who walks through there you'd want to eat dinner with, or play softball with." But, he points out, no one is getting hurt, either.

Several former trueteenbabes models contacted by Westword declined to talk about their experiences with Grady, saying they just wanted to move on with their lives. A few said they were tired of being depicted as sluts in the media. Still, all evidence suggests that only one girl ever claimed to have been mistreated by Grady.

On March 18, 2000, Sheridan police responded to a call from Grady's studio. It was Grady himself; one of his former models was refusing to leave his building. He explained that the model, Jessica, and her boyfriend had come in to collect some pictures that Grady had taken earlier. Grady was unable to find the photos right away, and Jessica become agitated and belligerent. When Grady asked her to leave, her boyfriend intervened and threatened Grady, which is when the photographer called the cops.

The police separated the parties. Taken aside, Jessica told them a lurid story.

She had met Grady through another model, she said. She'd filled out an application and showed up at his studio sometime in July 1999. There, she claimed, Grady had told her to undress, put on a robe and high heels, and then drop her robe as she entered the room. No pictures were taken, although the two agreed to stay in touch.

Jessica said she went back a few weeks later, just after she turned eighteen years old. "He showed me to the dressing room, introduced me to the girl who was to do my makeup and hair and informed me there was some beer," she told the police.

Having expressed interest in doing nude pictures, Jessica posed for sixteen rolls of film while she stripped, touched herself and played with a vibrator. After the session, she claimed that Grady sat down with her and began touching her and demanding sex. At one point, she claims, Grady shoved her head into his lap, saying, "Why can't you just do this?" Jessica also told police that Grady later asked her to scout young girls for his Web site.

Grady says he never met with Jessica before her eighteenth birthday; the date on her application supports this. He says Jessica posed for two sessions: the first nude, Penthouse-style, in early October 1999, and the second with a vibrator, two months later. He also argues that Jessica's story would be physically impossible, because the dressing room she described in her police report was not even built until that October.

Both Sheridan police and Arapahoe County officials investigated Jessica's charges. But Grady was never contacted, and no charges were ever filed against him.

More common were the comments of models like Charelle, interviewed by police in the days following Grady's arrest. She said "that she did not witness any inappropriate activity," according to police reports, and "that there were no nude or sexual photos and she was not asked to do anything she was uncomfortable with."

Another former model, Julia, interviewed by two investigators from the Arapahoe County sheriff's department, told them that "'Jimmy' treated her in a total [sic] appropriate manner and that he never offered her drugs or alcohol nor was she touched or solicited," according to their reports.

Ashley, an under-eighteen model who worked extensively for Grady, declined to talk to Westword. But her new manager, Kevin Urrutia, says that neither Ashley nor her parents ever had a problem with the business. If anything, he says, Ashley only regrets doing work for the Internet, which in the modeling and glamour-photography business still carries a stigma of cheapness.

"If Ashley had been doing the same pictures for a Victoria's Secret catalog," Urrutia insists, "she'd be signing autographs for us today."

By the beginning of 2002, Grady's various businesses had nine employees. Fifty models were working regularly for the trueteenbabes site.

But the good times wouldn't last. The first sign of trouble appeared in early March.

Although people often think they're anonymous on the Internet, they can be anything but. Grady's billing company provided a log of everyone who checked into his Web site. On March 4, a Littleton billing address showed up. It looked familiar, so Grady checked it out. He was right -- it was the Arapahoe County sheriff's department.

Grady wasn't worried: The state law defining child porn was tacked onto the studio's wall, and Grady's employees were careful to follow the rules. "We knew they were looking at us," he says. "But we changed nothing. There was a dumpster right outside the studio. We could've dumped everything in three seconds."

Unknown to Grady, the sheriff's department had been alerted to trueteenbabes by Ward Lucas, an investigative reporter and anchor for 9News. After receiving a tip about the site, Lucas called Arapahoe County Sheriff Pat Sullivan. An investigator assigned to the case then logged on to the site.

For the next three weeks, though, nothing more happened. "If we're exploiting young girls," Grady points out, "why didn't they take any action?"

That fell to the media. On March 24, a friend called Grady at his studio. "Turn on the radio!" he said. "They're talking about you!" Grady turned on Tom Martino's national consumer-protection program, and listened as his Web site was trashed. How could such smut be legal? Martino demanded. Grady says he tried to call the show, but he couldn't get through.

Later, it would be revealed that Martino had been contacted by an angry mother of one of Grady's models. Although she had signed the parental release form, the mother said, she'd been feeling sick and didn't really read it closely. She thought the pictures taken of the girls would be like those found in clothing catalogues.

A few days later, Grady got a call from a woman who said her name was Maria. She asked to come in for a modeling interview that afternoon.

Although the woman who showed up was clearly over eighteen, Grady remembers that she asked a lot of questions about his trueteenbabes.com business. At one point, she said that she had "a really promiscuous niece who wants to get into this."

"I told her she needed to get help for her niece, not a modeling gig," Grady says. The woman, a reporter for Fox 31, where Martino also worked, had a hidden video camera in her purse. (Grady wasn't fooled. Ten days later, when police burst into his studio, they confiscated "Maria's" application from Grady's desk. Across the top, Grady had written: "Fake/Martino.")

That night, someone from Fox 31 called Collin Reese, a CBI investigator, and told him about a photographer taking questionable pictures of young girls. Reese logged onto trueteenbabes "moments after receiving information from Fox 31," he later recalled.

With two law-enforcement agencies investigating Grady -- and at least two television stations watching closely to see where their tips would lead -- events sped up. On April 2, Reese and a Jefferson County sheriff's investigator met with a former model named Lyssa. The following day, an Arapahoe County sheriff's investigator contacted Reese to let him know that he, too, was working on the Grady case. The two agencies compared notes.

By April 5, Reese had drafted a request for a no-knock search warrant of Grady's business. Despite the participation of at least four law-enforcement agencies and a small army of cops, the document, designed to convince a judge that immediate intervention in Grady's business was necessary, contained a host of errors and -- deliberate or not -- deceptions.

Because Grady's pictures on trueteenbabes.com didn't show sexual acts, they didn't automatically qualify as child porn. So the state and county authorities investigating him turned to Colorado's "Exploitation of a Minor" statute. Like most laws that try to define morality, Colorado's law is at once specific and vague.

According to the "erotic nudity" section of the law, an illegal picture of a child features: "The display of the human male or female genitals or pubic area, the undeveloped or developing genitals or pubic area of the human male or female child, the human breasts, or the undeveloped or developing breast area of the human child, for the purpose of real or simulated overt sexual gratification or stimulation of one or more of the persons involved."

Colorado's law is unusually broad, according to attorney Obenberger. "The Colorado legislature basically seems to have said, 'If you take pictures of anyone under eighteen that is the least bit hot, that's a crime.' Yet society does tolerate people under age looking hot," he points out.

In the affidavit the CBI prepared to convince a judge to agree to a no-knock raid on Grady's studio, a Jeffco investigator reported that while surfing trueteenbabes, he saw that models exposed their "buttocks area," and "the buttocks [are] considered an intimate part of the body under Colorado Revised Statutes."

While it's true that the buttocks are considered an intimate part of the body, that statute only applies to sexual assault cases. Nowhere are buttocks mentioned in the laws that Grady was being charged with breaking.

There were other mistakes in the no-knock request. One section focused on Jessica's sexual-assault allegations the year before -- but failed to mention that Grady been cleared. It also implied that Jessica had posed naked with a vibrator while still a minor, something Jessica herself never claimed.

And included at the end of the request for a search were five pictures from the trueteenbabes Web site that were intended to convince the judge that Grady's business had to be shut down immediately. Yet three of the photos were of girls who were eighteen years old -- legal adults, in other words, and thus irrelevant in an investigation of "exploitation of a child."

Police staked out Grady's studio most of the day. After the warrant was signed late on the afternoon of April 5, the cops went into action -- with two TV stations filming them all the while. They were 9News and Fox 31, the two stations that had tipped off authorities in the first place. Inside the studio were two females, one in jeans and the other in a store-bought bathing suit, both eighteen years old. Nearby, a male technician was working on a VCR -- not exactly the live, underage sex show that news coverage later hinted at.

Over the next few hours, the police seized hundred of pieces of evidence. According to inventories, the Arapahoe County sheriff's department took not only every computer and piece of photo equipment in the place, but also thousands of unopened CDs, a blue beanbag chair, tables, a scooter, a Schwinn bicycle and several potted plants. The sheer volume and randomness of the confiscation suggest that no one was really clear on what they were there to find.

In their interviews with Grady's models, investigators also seemed uncertain of what they needed to learn (see "The Girls Next Door" ). And it took at least three people, working under the guidance of the Arapahoe County District Attorney, to decide which of the pictures might be illegal.

Bob Chappell, the deputy DA who prosecuted Grady, insists that there was never any real dispute over which photos broke the law. "These pictures caught our attention," he says. "There wasn't ever any need to argue. We knew it when we saw it."

All the trueteenbabes photos are racy; none would show up in a high school yearbook. Yet the 220 pictures the cops eventually determined to be illegal show a wide range of tastes -- and interpretations of the law. While some feature girls in sheer tops, in others girls are wearing bathing suits or blouses you might see at any high school. (A sheriff's investigator pointed out that two girls are touching in one photo -- a hint of sexual activity. In reality, the photo shows one girl jamming a washcloth into another's mouth.)

About half of the pictures that authorities eventually decided fit the definition of child porn had never even been developed, Grady says. Several were outtakes from long sequences of photos that he claims would either have been retouched or never have been posted at all.

The jury, Grady says, saw what the public never did.

While Grady sat in jail, he didn't have much reason to feel confident. Under outgoing DA Jim Peters, the district attorney's office had been extremely aggressive about prosecuting sex crimes. In 2002, the 18th Judicial District filed more sexual-assault cases than any other district; it also brought more cases to trial than any other in the state.

While this would be Arapahoe County's first trial involving alleged violations of the "exploitation of a minor" law, other cases had been successfully prosecuted under the Colorado statute. Most notable was a five-year-old case involving Wayne Gagnon.

Gagnon had been caught with photographs he'd taken of a sixteen-year-old girl in a public park. He'd met the girl over the Internet and had taken the pictures with her permission. Although the girl's breasts were only "partially exposed" (in one picture, her hands appeared to be opening her blouse), Gagnon was nevertheless found guilty and sentenced to twelve years in prison: The jury had decided that he'd taken the pictures for his own sexual gratification. While that was never directly proven -- Gagnon hadn't been caught masturbating to them, for example -- the jury determined there was no other reason he would have taken them.

Chappell, the deputy district attorney who prosecuted Grady, says the trueteenbabes photos were just as bad. "The girls don't have to be nude for it to [quality as] erotic nudity," he pointed out. "And the theory is that these images were created for sexual gratification or stimulation. This doesn't require us to prove that somebody on the other side of the computer was sitting there getting all worked up."

Grady's pictures "speak for themselves," said Mike Knight, spokesman for the DA's office.

To counter the prosecution, Grady's lawyers, Mike Miller and Andy Contiguglia, started gathering evidence to prove that his photographs of under-eighteen girls were no more pornographic or provocative -- and, in many cases, much less so -- than those found in magazines like Maxim or Jane, both available at King Soopers and Barnes & Noble.

They also planned to argue that punishing a Web surfer for how he reacted to Internet photos was a violation of the First Amendment. "If you're going to argue that somebody could go on the Internet and jack off to what he found, then you could turn any book into porn," observes Miller.

In October, Grady finally caught a break. In response to a defense motion, Judge James Macrum decided that instead of simply showing Grady's pictures to a jury and arguing that the photos had no other purpose than to provide sexual gratification, prosecutors would have to show that Grady himself had been sexually stimulated by the photos.

The trial began on March 3 in Arapahoe County. Several of Grady's models testified. Except for one girl who claimed she heard Grady sigh when she walked out of the dressing room and a three-second video clip from Fox 31's hidden-camera interview, in which Grady could be heard saying that it was fun working with "fresh young girls," no one could really say that Grady had received sexual stimulation from the sessions. Nor could they say that he'd mistreated his subjects in any way. Although one girl insisted that she felt degraded and humiliated by the photo sessions, the defense was able to produce e-mails she'd sent Grady after her first shoot saying that, in fact, she'd had a good time and couldn't wait to return to the studio.

On March 13, Grady was acquitted of all charges.

Jim Grady spent just under a year in jail. By the time he was released in mid-March, he was broke. Unable to make payments on his 1996 Dodge van while incarcerated, he'd lost the car to repossessors. He had also been successfully sued for not paying back his small-business loan, and by his former landlord for breaking his lease.

Much of the equipment seized by police in their April 2002 raid came back broken. "Futons broken into splinters, parts and sides ripped off of $35,000 scanners, control panels kicked off the front of computer monitors," Grady recites. Still more remains missing, everything from photographic equipment to cash to the two computers that remain in police custody. Hundreds of negatives that Grady had planned to sell are gone. In all, Grady says he's out more than $100,000 in lost and broken items. And that tally doesn't include his legal fees -- or the label that he may never shake. Child pornographer.

Although Grady can't be tried again, Deputy DA Chappell plans to appeal the judge's ruling that Colorado juries need only consider the photographer's sexual gratification when determining "exploitation of a child" charges. Chappell says he still believes that if pictures of minors are produced for the sexual stimulation of anyone, anywhere, they should be illegal.

Although some of Grady's young models have cut themselves off from him, exhausted and embittered by the legal mess, others remain in close contact. A few have even posed for his Web site, which went back online in May.

Jennifer stays in touch with Grady. Now working at a downtown bar, she says she's moved on -- and no thanks to the concerns of well-meaning adults. After Grady's well-publicized arrest, one of her teachers approached and "offered to hook me up with a counselor," Jennifer remembers. "I guess she thought I was going to be a wreck and would need a psychologist." Jennifer declined the offer.

At worst, her time with trueteenbabes was a learning experience. "I don't regret doing it for a minute," Jennifer says.

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