Prostitution was/is a big no-no in the mob. In order to become made, the proposed member was carefully checked if he had had any dealings in this racket. If this was the case, the proposed member was not allowed in. I think Bonanno stated that if somebody had been pinping out women in the past, he could never be a man of honor.
I doubt very much that Lucky Luciano was a pimp while in the Mafia.
In my opinion, the prosecutor Thomas Dewey had a hard on for putting Luciano behind bars. Fight against crime was often a ticket to a higher office. (Maybe it still is.)

After Luciano´s incarceration, several witnesses stated that they had testified falsely at his trial. The prostitute Cookie Flo claimed that she made up things because of her heroin addiction and just wanted to get out of there as quick as possible.
Speculations arose that Dewey was out to get Luciano at any price (even by squeezing and manipulating the prostitutes) and if I´m not mistaken, Dewey was forced to give his own testimony later on, in order to prove that this was not the case.

The other defendents who also was charged (Ligouri, Betillo, Tommy Bull and other footsoldires) used Luciano´s name in order to intimdate the victims. But was Luciano aware of this?
Another question is why did Cookie Flo reveal her false testimony after the trial?
Perhaps she eventually realized, after being squeezed by Dewey, what a dangerous position she was in, and decided to try to buy herself a ticket out.