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King Spa

King Spa at 1117 Central Avenue, is pictured Tuesday, April 16. A federal indictment against a Billings man was recently unsealed, detailing the inner workings of human trafficking taking place at local massage parlors.

The former operator of a Billings massage parlor was ordered to federal prison Thursday, but in a win for the defense, no restitution was ordered.

Scot Donald Petrie, 62, was sentenced for his involved in the operation of King Spa, at 1117 Central Ave., and A Spa, at 224 Grand Ave.

“Mr. Petrie made his living for several years exploiting women,” said U.S. District Judge Dana Christensen.

In July, Petrie pleaded guilty to a single count in a four-count indictment, and the government dropped the remaining charges under a plea deal. Petrie admitted purchasing a bus ticket to Billings from Las Vegas for a woman to live and work at A Spa.

Federal sentencing guidelines called for 24-30 months in prison. Prosecutors asked for 24 months, while the defense asked for no prison time, and instead a five year period of probation.

No restitution

While Petrie pleaded guilty to just one count involving one victim, prosecutors had sought to secure restitution payments to seven women who worked at the spas.

No figure was cited in court for the full restitution request prosecutors hoped to make. But for one woman, that figure was approximately $3,800, according to government filings. In one month, the 66-year-old woman had between 25 and 30 customers, and had intercourse with 10 of them.

The restitution sought was primarily an attempt to recoup the amount of customer payments that business owners collected from workers.

It’s common for such businesses to split that money down the middle with workers, according to testimony from defense investigator Manuel Vasile. 

Vasile recounted a conversation he had with one of the victims in the case after Petrie was charged, at the Little Tokyo Spa in Butte where she was working.

“She indicated that that was the standard, everywhere,” he said.

Babcock likened the arrangement to a barber paying to operate his own station at a barber shop.

“You have to pay rent,” he said.

But Assistant U.S. Attorney Zeno Baucus characterized the 50-50 split as unjust, saying the women lived in “dilapidated conditions” and did sometimes “demeaning” work, in contrast to Petrie’s role, which was logistical in nature, involving things like travel arrangement.

“Many victims may not know any other way of life, depending on their level of education, skills, language fluency, and other obstacles,” prosecutors wrote in a presentence filing.

U.S. District Judge Dana Christensen denied the request.

“I decline to step into the role … of collection agency for sex workers,” the judge said.

The judge found the women at the spas “knew full well” they’d be doing sex work at the businesses but opted for it anyway. He also said the one victim for which restitution could be argued denied suffering any physical violence by Petrie. Restitution was mandatory under the circumstances of the case, but Christensen found a legal exception applied. 

Christensen couched his comments on the case.

“It is not lost on me that victims, individuals who get involved in the sex trade,” even if they do so willingly, might find themselves in a situation “where they lack power, where they lack choice” or feel coerced, the judge said.

Due to limited English proficiency or employment history, some massage parlor workers have few alternatives for income, the FBI has said. Some lack legal status in the United States, according to FBI Special Agent Brandon Walter, who spearheaded the Petrie investigation. 

Judge hears no remorse

No spa workers or customers were charged with prostitution offenses in connection with the investigation of King Spa or A Spa, the defense noted.

Some see this as an important shift in law enforcement’s approach to the sex industry — focusing less on misdemeanor prostitution violations and front-line sex workers, while looking more at possible trafficking violations.

But the defense suggested it could send the wrong message.

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“In fact, why not come back to Montana?" Babcock said. "You won’t be charged."

Babcock underscored that none of the victims in the case submitted a claim for restitution or an impact statement. Instead, it was the government seeking restitution on their behalf.

"Indeed, victims like this don't often want to cooperate," Baucus said. 

Babcock, the defense attorney, also argued that the spa managers were transparent with workers early on that any work under their roof entailed sex work, and that the proceeds would be split with the house. Suzy Kotts, the former owner of the businesses, who died in 2018, told an undercover agent as much when that agent asked for a job in 2016, government filings note.

Petrie told the judge that the bus ticket he bought for one of the women in January to return to Billings for work came after she’d called him, “highly upset” and said she was stranded in Las Vegas and had run out of money.

“Lost income?” said Babcock, in response to prosecutors’ arguments that the 50% collection rule was unfair. “They gained income." 

Babcock also pointed to his investigator’s testimony that one of the victims in the case “felt bad for” Petrie after he’d been charged and said that "he was a nice guy.” The woman was interviewed at the Little Tokyo Spa in Butte.

Before he was sentenced, Petrie said he would likely move back to his home state of Wisconsin when possible.

“I don’t hear any clear indication from you of remorse,” the judge said.

In addition to two years in prison, for which Petrie will self-report, Christensen ordered he serve five years of supervised release and pay a $5,000 special assessment under the Justice for Victims of Trafficking Act.

He’ll also forfeit the building at 1117 Central Ave., which formerly housed King Spa.

Defense attorney Steven Babcock said it was too soon to tell if they would appeal. 

Before Petrie, the last bust of a massage parlor in Billings was in 2011, when the owners of Shangri-La Spa and Sauna were sent to prison for one year. While defense attorneys said at sentencing the business was being shut down, it reopened a month later under new management.

This year, lawmakers made a series of changes to Montana law aimed at cracking down on massage businesses that sell sex. That included funding for two agents to work solely on human trafficking, a provision allowing law enforcement or massage board representatives to ensure all workers at a massage business are licensed, and the criminalization of certain non-intercourse commercial sex acts.

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