I find it hard to believe that the media and law enforcement like Capt. Renault didn’t know that a number of storefront spas/massage parlors operated by Asian owners are in fact brothels. The story that follows is substantially the same as it was when it was originally posted in 2009 on the federal law enforcement website ticklethewire.com.
In 1999, the Ann Arbor (MI) Police Department (AAPD) came to the FBI with a proposal. AAPD wanted to know if the FBI would be willing to help investigate spas/massage parlors in Ann Arbor, and prosecute them federally. There were five such spas in Ann Arbor, and AAPD strongly suspected that the spas were fronts and were actually brothels.
The U.S. Attorney’s Office (USAO) in the eastern District of Michigan and FBIHQ gave the go ahead to pursue an investigation of the spas. There were other similar cases being pursued elsewhere in the country. The Michigan investigation was coordinated with those other cases. Further, there were national implications involved, e.g., organized crime, indentured servitude, immigrant smuggling, human trafficking and sexual exploitation, which the then U.S. Attorney General had made a priority. This type of spa/brothel seemed to be a national phenomenon.
AAPD was advised that the spa cases could be pursued federally, but only if AAPD was willing to commit to a long-term investigation. To AAPD’s credit, they made that commitment.
At the outset of the case, it was understood that the spas could be shut down like the speakeasies of the prohibition era, but to have any lasting impact, the owners had to be identified and prosecuted. It was relatively easy to show that there was prostitution occurring in these spas, the trick (no pun intended) was to prove that the owners had knowledge that prostitution was occurring, and they were profiting from it.
All the spas in Ann Arbor were run by Korean Americans. (The case was code-named Seoul Provider.) Surveillance and telephone pen-registers indicated some interaction between spas in Ann Arbor and spas all over the country. All the spas that were investigated in Michigan and Ohio were run by Korean Americans, and they all had very similar operating procedures. (Elsewhere in the country, they were run by Vietnamese and Chinese.) The working girls were almost exclusively Asian and lived on the premises and seldom left. They moved from one spa to another after six weeks to two months often in other parts of the country. The spas were usually managed by older Asian women, who were in effect madams. Often the spas would have the working girls sign agreements making them independent contractors, thus giving the owners plausible deniability as to knowledge of sexual activity. The working girls were in almost all cases uncooperative with law enforcement and could not be relied upon as potential witnesses. Despite the women being exploited, most had very limited skills, little English language capability, and were in an indentured servitude status. Many were told the expenses that were incurred to get them to and into the U.S. was a debt that had to be repaid.
The spas operated seven days a week with very long hours, e.g., 10 AM – 2 AM (not the kind of hours of operation in legitimate massage parlors and probably a clue). The spas would set fees such as $45 for a half hour and $60 for an hour massage. Generally, these fees went to the house. The money for sex was added to the initial fee and was negotiated based on the agreed sexual activity. The money for sex was split between the house and the girls. All the Michigan spas accepted credit cards. This turned out to be a key element in proving the owners’ knowledge. The owners would establish merchant accounts to enable them to accept credit cards. Thus, all proceeds from the credit cards went directly to the owner. So, if a customer were to pay an initial fee with a credit card and then within 10-15 minutes have a second charge in excess of $100 made on his card, it was obvious what was occurring and difficult for the owner to argue they had no knowledge of sexual activity. (All the credit transaction information was obtained by subpoena.) This coupled with physical surveillance, which included “trash pulls” (The trash pulls revealed among other things, used condoms and daily business records showing customer charges.) and evidence obtained when search warrants were ultimately executed. This resulted in all the owners being convicted of federal felony charges, and over a million dollars of assets being forfeited. The investigation did not ever use undercover police officers soliciting sex acts in the spas, which was a standard technique in prostitution cases, but wasn’t necessary in the strategy to prosecute the owners and not the working girls.
Most of the charges were based on Interstate Transportation in Aid of Racketeering (ITAR) – Prostitution statute (18USC1952), tax violations and there were immigration statutes that were applicable as some of the owners were not citizens. None of the working women were prosecuted, and help was offered to them through local social services following the raids and the shutdown of the spas.
During the investigation, many of the spa’s customers, “Johns,” were identified, but they weren’t prosecuted. Some of them were interviewed as potential witnesses. In the recent Florida case, the authorities are prosecuting the Johns for solicitation of prostitution. They obtained evidence of prostitution using surreptitiously placed video cameras. Although prosecuting Johns may be a deterrent, a better long-term solution would seem to be to prosecute the owners/purveyors and institute forfeiture of the assets attributable to the spas.
There are no Asian-operated spas/massage parlors currently operating in Ann Arbor nor have there been since the joint AAPD/FBI investigation concluded.