There are different levels of landlord/agency agreements from the basic "find a tenant" agreement to a full service agreement. However, if the landlord and agency have signed an agreement to find a tenant, then there is no clause that would allow the agency to act without due diligence.
The basic due diligence would be to obtain proof of identity, income and credit worthiness. The problem is is that these can all be fabricated. Unless the person taking the tenancy states in writing that they intend to use the property as a brothel, as long as the agent can show they followed reasonable due diligence, then there is sweet fa the landlord can do.
Agree, really not worth the risk unless you want to really be a party to a brothel