After several months of investigation into an alleged prostitution ring, police arrested Samir Kurtovic, Omer Nargalic and another unnamed suspect on Tuesday.
Police raided several locations in Sarajevo, seizing two handguns, ammunition, a large sum of money, and several mobile phones.
Police said their Operation Lipstick uncovered a criminal organization that profited from hiring out at least three underage girls for sex.
Prosecutors believe that over an extended period, the suspects brought the girls to mostly foreign clients, and pick them up afterwards.
Kurtovic allegedly took a 50 percent cut. According to a number of local news websites, prosecutor Senad Osmic believes Kurtovic's daily profit was about 1000 Bosnian marks (US$ 564.70).
Investigators claim Kurtovic then laundered those profits by buying cows and goats and selling them as Kurban – live animals that are sacrificed on the Islamic holiday Kurban Bajram (Eid Al-Adha), the meat given to those in need as well as family and friends.
The three suspects denied wrongdoing at court on Thursday, and Kurtovic and Nargalic were ordered into pre-trial custody to prevent them influencing witnesses during their trial.
Both of them were quoted in local media saying they did not know each other. According to news website Klix, Kurtovic said he'd never seen Nerlagic before.
Nerlagic said his strong religious beliefs meant he would never commit the act he is suspected of.
