Sure, we have teachers who get caught having relations with their students. Yes, we have teachers who get caught with drugs. Even a few who get caught stealing from the PTA. But I've never seen an American teacher busted for forcing his students into prostitution.
Details here and here.
Believe it or not, this story gets even worse! It turns out that this was a fake sting operation set up by a television reporter, as payback for a financial dispute. Read about it here. (Hat tip to Tim for this update.)