413047-Underground-Commercial-Sex-Economy

Women who are trafficked must turn their tip money over to a pimp or, in the case of foreign national
women, to pay back their smuggling debts to the massage parlor owner or other individuals such as
recruiters or smugglers. Massage parlor workers voluntarily involved in sex work are reportedly able to
keep their tips. It was stated that on average, women would make $40 out of every $200 per client, so the
owners of the massage parlors make disproportionately more than the workers (both those trafficked and
voluntarily involved in sex work).
Law enforcement noted that owners of erotic Asian massage parlors are very business savvy, investing
their money in local ethnically-owned and operated community banks, real estate, and other legitimate
businesses in the United States and overseas. Massage parlors are highly organized, not just in Dallas, but
nationally. However, law enforcement has had difficulty tracing the networks and money back to the
foreign countries connected in the scheme:
Nationally, yes, there are organized groups where women are brought over here, they go
to Flushing, New York and they all get their massage license and then they go to a bunch
of different cities. But the question is, and I don’t know the answer to this, is “How
organized is the system across all of the cities” Very similar scheme you can see across all
of the major cities around the country. Then the money goes back and we can pretty
much get it to Hong Kong, but we’re not going to get it to China. (Dallas Law
Enforcement Official)
While law enforcement has had some successful investigations and takedowns of massage parlors
operating as fronts for sex trafficking, officials described challenges to uncover the entire network and to
seize all assets derived from the sex trafficking—due to changing tactics of the traffickers, the trafficker’s
business savvy, and law enforcement’s requirement to move in once trafficking can be proven (which can
inhibit their ability to uncover the rest of the network). One official described how these dynamics played
out in the 2005 takedown of a Dallas massage parlor ring connected to San Francisco and Korea:
What we did in ’05 … I think that day we executed 11 or 12 warrants. So it was a DPD,
FBI, and ICE and that was actually a pretty good size one. That was tied up to San
Francisco and could have probably been bigger had there been a longer wait as far as the
investigation goes, but when they say “Ok, it’s proven, there is trafficking,” we have to act
on it. In that one, several people were put away for the structured money laundering, and
we actually did pull some of the businesses and take a lot of their money, but of course it
was not enough, because every time we caught on to what they were doing, they would
stop what they were doing, whether it was a Western Union, whether it was the Post
Office. Every time we caught on they stopped and then they started sending it in a
different way. And all of this money was going right back to Korea. And that one was a
female here in Dallas. (Dallas Law Enforcement Official)
The majority of the money made off the underground commercial sex market in Dallas massage parlors is
found to be invested in the United States. However, massage parlor owners and others in the network
have become very good at hiding their assets to avoid asset forfeiture:
Respondent 1: As far as [the massage parlor money] going overseas, if they’ve got
relatives, I see that sometimes they will send money. But it’s not an exorbitant amount of
money. A lot of it is being utilized right here, and a lot of it is being invested right here in
the US. And like I said, a lot of it is going into property and real estate, or investment
accounts. I've noticed that’s picked up quite a bit where they're actually making sure they
have their investment put together for the future.
Respondent 2: They're smarter.
Respondent 1: They are definitely smarter. And the idea is the use of multiple
institutions, whether or not they’ll be around the corner or in another state, has become a
major thing for them. Because that way, you don’t really have an idea where all of their
assets lie until you really dig down deep. And then you’ve got those small banks so to
speak that they're tying some of their monies up in and you're never just really sure of
what the assets are. Because since they are smaller community banks, you're less likely to
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