Billings has a parlor problem.
The businesses, which bill themselves as massage outlets but also offer commercial sex, according to law enforcement, have been an open secret in town for years, with their all-night neon “open” signs and covered windows.
What’s new is the public scrutiny.
Law enforcement, prosecutors and advocates united during the state Legislature earlier in 2019 to educate lawmakers about the problem.
While they celebrated the passage of two new laws cracking down on massage parlors and other forms of sex trafficking, some are calling for a broader approach.
“It’s not just the buyers and not just the traffickers,” said Penny Ronning, co-chairwoman of the Yellowstone County Area Human Trafficking Task Force. “There are property owners who are collecting rent from these businesses. And I think about them, and I think, ‘Wow, why are they not doing everything they can to work with law enforcement to get those businesses shut down and out of their buildings?’”
Ronning is not alone in zeroing in on landlords.
In California, the Sacramento City Council has proposed some form of crackdown on massage parlor landlords, although the proposal is still forming.
In New York City, police have set their sights on landlords of massage parlors and brothels but have struggled to prove the extent of their complicity.
Polaris Project, a national nonprofit that runs a human trafficking hotline, has also called for greater scrutiny of the property owners. Most massage parlors rent, and don’t own, their buildings.
“This preference for renting puts landlords in a position of being either a key enabler, turning a blind eye to trafficking, or serving as a key ally toward ending it,” the nonprofit wrote in a 92-page report on the businesses.
Main Street Spa
Local realtor Jerry Ray said the FBI used to visit his office, asking to see his rental agreements with Main Street Spa, formerly located in his two-story commercial complex at 2018 Main Street.
“Oh the FBI used to check them regularly,” Ray said. “Oh yes, and they were all legal. They were all checks, no cash.”
Last May, Ray ended up evicting the spa. He said the manager, a local woman, had stopped paying rent and he’d come to suspect the business was offering commercial sex. Justice of the Peace David Carter ordered the business to pay $4,922 in unpaid rent and maintenance costs.
The lease with Ray was signed by Ok Hui Pomes, 60, who listed a home address in Flushing, New York, a hub of illicit massage businesses.
But while the FBI has said the 13 massage parlors in Billings exploit their workers, often requiring them to forfeit half their earnings to the business owner, Ray said he wasn’t worried about the business he’d rented to for roughly seven years.
“Well that’s because they want to claim that somebody’s taking advantage of some whore, … taking half her money. And that’s bull----,” he said.
Ray is one of several property owners in Billings who have leased commercial space to businesses listed on Rubmaps.com, a review site for massage parlors the FBI has pointed to as a primary indicator a business may be offering sex.
Stephanie Baucus, co-chair of the Yellowstone County Area Human Trafficking Task Force, said she hopes Billings is waking up to the realities of massage parlors.
“Trafficking happens in our backyard and under our noses, and it’s a responsibility of all of us to look out for it and do what we can not to enable it,” she said.
If a landlord has suspicions about the business they’re renting to, Baucus said, they should talk to law enforcement and review early termination clauses in their leases.
Parlors have lately come under increased scrutiny, in part after the high-profile bust of New England Patriots owner Robert Kraft, who is reported to have patronized one of the businesses in Florida in January.
In Billings, the task force has drawn attention to the businesses, saying they exploit women who lack other options. Baucus said all of the massage parlors she's aware of in Billings involve trafficking.
“This industry that is posing as legitimate massage businesses — we’re not talking about voluntary sex industry workers,” Baucus has said. “These are trafficking victims.”
In Billings, the massage parlors date back decades.
When Tokyo Sauna set up shop in town in 1984, police in Missouri were quoted in The Billings Gazette saying Missouri outlets of the company had been under investigation for prostitution.
Twelve years later, police conducted a prostitution sting at the business, which made the front page of The Billings Gazette.
The business, at 1810 First Ave. N., is listed on Rubmaps.com, the user review website the FBI has said serves as a primary indicator that a business offers commercial sex.
A presence on Rubmaps alone likely does not indicate a commercial sex operation. For instance, the patron of one Billings business listed said no sex acts were offered and when the patron requested it, the massage therapist "seemed a little angry about it."
But the Tokyo Sauna reviews include descriptions of sex acts, pricing and graphic details.
The business also operates 24 hours a day, according to its Groupon listing. It has darkened windows, the neon "open" sign the FBI has said is characteristic of commercial sex operations, and a sign on the front door notifies customers of an ATM machine inside.
James and Diedre Jussila, who have owned the multi-unit commercial building where Tokyo Sauna is housed since 2001, declined to answer questions about their tenant. The Jussilas' business, Al’s Bootery and Repair Shop, sits next door to Tokyo Sauna.
The owners of Tokyo Sauna did not respond to a mailed letter seeking an interview.
Shangri-La Spa and Sauna
Herb Mangis, a retired accountant, has owned the building at 437 Bernard St., since 2001. That's where Shangri-La Spa and Sauna is located.
Mangis said he was aware of the bust at the business in 2011, when owners Greg and Myong Suk McFarland were indicted on charges of money laundering and interstate promotion of prostitution. The couple forfeited more than $1 million in prostitution proceeds.
Government filings suggest the women at the business made money only if they performed sex: The “madam” collected all the proceeds from massages and half of the proceeds from sexual services, a customer told investigators, citing the employee.
The McFarlands’ lawyers said in 2012, before the couple went to federal prison, that the business would be closed.
But just one month later, the business ran ads in The Billings Gazette noting new management.
It has been licensed with the city under the current business name and location since 2013, and has received its last review for sex on Rubmaps.com in August 2018. Like other massage parlors in town, it has changed ownership several times in the past decade.
Mangis said the scenario the local human trafficking task force describes of Billings massage parlors is a problem.
“Sex exploited, when a woman wouldn’t want to, I think is absolutely wrong,” he said.
But he stopped short of saying he’d quit renting to the owners of Shangri-La, saying he couldn’t fathom that it is among the illicit businesses the FBI was describing.
The FBI won’t comment on specific businesses but has provided a list of indicators of illicit massage parlors, including a presence on Rubmaps.com, covered windows, extended hours of operation, a neon “open” sign, discrete parking options and giant, block-lettered “SPA” signs.
“I can’t wrap my mind around it,” Mangis said, of the exploitation the FBI has described at Billings massage parlors. He noted multiple exits to his building through which someone could escape if they didn’t want to be there.
FBI Special Agent Brandon Walter and others in the task force have sought to educate the public that the women working in massage parlors are often from another country, socially isolated and lack other options for making a living.
“There’s this idea that a gun is being held to the head,” Walter has said. “That’s the exception. It’s more of this psychological kidnapping that happens.”
In an interview with The Billings Gazette on Thursday, Kelly Pok Hui, owner of Shangri-La, responded to a letter transcribed into Korean by a freelance interpreter. The letter asked about Shangri-La and notified Pok Hui that the newspaper was pursuing a story about massage businesses that offer sex or sex acts.
"This one — not true," Pok Hui said. "These things not true."
She said the website advertising 24-7 operations was created by a former business owner and is out of date. Pok Hui said her business is open from 10 a.m. to 10 p.m.
Pok Hui said she is now the only person working at the business. A woman who previously worked there, and was present on a previous Billings Gazette visit, left in May due to a family problem, Pok Hui said. She said she did not know where the woman had gone.
Pok Hui also said that her former employees were free.
"They're free," she said. "Nobody hold them."
The letter cited concerns by advocates that the women working in massage parlors are often required to give half of their earnings to the business owners. It did not ask questions or reference any concerns about women being free or not free, or being held against their will.
Pok Hui also added that the neon "open" sign out front is no longer in use.
John Ray, brother of realtor Jerry Ray, owns the building at 1833 Grand Ave where Happy Spa has — until recently — been licensed with the city, since 2016.
Asked about the changes to state law aimed at cracking down on massage parlors, John Ray said the efforts were problematic.
“Do you realize how many people you’re going to put out in the street?” he said. “And we’re going to end up with a lot of vacant buildings.”
Asked whether he was concerned the business to whom he rents exploits its workers, he said he wasn’t.
“No,” John Ray said. “No. You’re exploiting me at this present time,” he said, before hanging up.
In late spring, signage inside Happy Spa was taken down and the shuttered blinds were opened. Happy Spa asked the city to deactivate its business license on May 14, according to the Finance Department. Bamboo Hut Spa and Bathhouse did the same thing.
"I think it's the pressure," Ronning, the co-chair of the Yellowstone County Area Human Trafficking Task Force, told The Billings Gazette recently. "They know code enforcement can go in there. They don't want the hassle. The public is becoming more aware."
John Ray did not return calls seeking further comment.
Happy Spa was originally licensed to Ok Son Hale, who was also the original business owner of Fuji Spa, before that business closed.
Fuji Spa operated for years in a strip mall in the Heights owned by Yellowstone County Commissioner Denis Pitman, a former city councilor.
In 2011, after complaints by his opponent in a City Council race, Pitman told The Billings Gazette he couldn’t evict the business without buying out the lease. Pitman said he was 18 months in to a three-year lease.
But the spa continued to be licensed at his property for years after. The last city business license was issued in May 2016, expiring in May 2017.
Asked why he’d continued leasing after 2013, Pitman said he'd need to check his records. In a follow-up email, he said the lease had in fact been for longer than originally reported.
"What I can remember that is different from what you have said, or how I was quoted in the past, is that I had a 10-year lease with my tenant at that time," Pitman wrote. He said he could not locate a copy of the lease to confirm, however.
Pitman said he’d struggled with finding a way to break the lease with Fuji Spa once he observed red flags. He was ultimately able to do so by citing violations of city ordinance banning living in commercial buildings.
Pitman said there had been rumors about the business in his building but no arrests or criminal charges against the business owners.
“I worked with law enforcement to see what could be done to either prove or disprove what was happening in my building,” he said. “I was told by city officials at the time that it was expensive to pursue something that at most would be a municipal infraction.”
Pitman added he’s grown more concerned about businesses like Fuji Spa. In 2017, he sat on a local government panel at the Fight Human Trafficking Conference in Billings.
“It is truly tragic the many ways in which our citizens are exploited,” he said.
Oriental Spa, at 1348 Main St., has reviews for sex acts on Rubmaps.com and has a YouTube video advertisement from 2011.
“We offer clean, private rooms and rotate our staff monthly,” the ad promises.
Susan Carlson, a member of the Business League for Massage Therapy and Bodywork, said that line was a red flag.
“You just don’t say stuff like that,” she said. “When you say we have rotating staff or fresh young girls or new girls in town, that’s all code for a sex business.”
On Rubmaps, Oriental Spa was reviewed as recently as May 22, when an anonymous user posted about a sex act paid for at the business.
Tegan Leffler, one of School District 2’s Golden Apple award-winning elementary school teachers, has owned the building since 2015 under a limited liability company registered in her name.
Leffler declined to comment on the business in her building or answer a list of questions emailed by The Gazette.
Lori Tenbush, owner of Oriental Spa, did not respond to a mailed letter seeking an interview.
U Spa, another business reviewed for sex acts on Rubmaps.com, has one of the large block-lettered “SPA” signs the FBI has said are characteristic of massage parlors. Pasted on that sign are stick-on letters spelling out, “WE HAVE BACK PARKING,” which is another red flag, according to the FBI, since customers often prefer a more discreet entrance.
U Spa is housed in a Grand Avenue strip mall at 2113 Grand Ave. owned by local realtor and country and classic rock family cover band leader Andrew Wilson, of Cimarron Band.
Wilson declined to answer a list of questions emailed by The Gazette.
Kyong Cha Roberts, owner of U Spa, did not respond to a mailed letter seeking an interview.
Sky Spa, at 901 S. 32nd St. W., has reviews for sex acts on Rubmaps. A web page for the business previously advertised 24-hour operations, but that appears to have been removed from the page. The page advertises truck parking and features five-star testimonials noting "beautiful super young Asian girls."
The spa rents from George Frank, owner of Plaza Arcade (the former Bones Arcade) and the Doc & Eddy’s chain of liquor stores and bars. Frank also owns three Billings casinos and the Fairview Angus Ranch outside Big Timber.
“I’ve never had any problems with them,” Frank said, of the spa owners. “To tell you the truth, I’ve never even met them. They always send a check, and they always keep the premises up nice, and they love the location.”
Frank declined to answer further questions on his renters.
Hyo Chim Youn Lee, owner of Sky Spa, did not respond to a mailed letter seeking an interview.
Paradise Spa, at 203 Miles Ave., has been licensed with the city since 2012. It has a “24-7” sign painted on the front window, a neon “open” sign and Rubmaps reviews for commercial sex.
The building is owned by Dwayne “Dewey” Allen, longtime football coach and former University of Montana football player. Allen, now a sales manager for a home loan company, has coached at Billings Senior High, Billings Central High and Rocky Mountain College, among other area schools.
"I have a contractual lease agreement that I have to fulfill," Allen said, when asked about his tenant. "After that, when my contractual arrangement is complete, I have other options to take."
Allen declined to answer further questions.
Kelley Yee, owner of Paradise Spa, did not respond to a mailed letter seeking an interview.
Bamboo Hut Spa and Bathhouse
Bamboo Hut Spa and Bathhouse has Rubmaps reviews for sex acts, a neon “open” sign and ample semi-truck parking. It’s located at 105 Garden Ave., just off the South 27th Street exit from Interstate 90.
Bamboo Hut is housed in a building owned by a woman convicted in 2009 of misdemeanor prostitution in Wyoming.
A year after the woman’s prostitution conviction in Casper, for work at that city's Tokyo Massage, the woman’s name began being listed as the owner on the city business license for Bamboo Hut in Billings. In 2018, the building was transferred to her name.
Baucus, of the task force, said she was not familiar with the Bamboo Hut business in particular but said some people forced into sex work eventually rise through the ranks to manage those newer to the industry.
“It does happen, and I think that it’s a failing of our law enforcement and social services in not being able to get these women out before they become criminals themselves,” she said.
Myong Sun Kim owns the one-story building at 10 N. 34th St., where VIP Spa has been licensed with the city since 2013. The business online is called 34th Street Spa.
VIP Spa has reviews for commercial sex on Rubmaps.com as well as covered windows and a neon “open” sign. Its awning advertises that the business is open 24 hours.
Kim could not be reached for comment.
The city business license for VIP Spa is registered to Hyo Chin Yun-Lee. A woman who answered the phone at VIP Spa said the woman who owns the business also owns Sky Spa, although the names are spelled slightly differently on city paperwork.
Yun-Lee did not respond to a mailed letter seeking an interview.
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