10 charged with running huge prostitution, money laundering ring on Long Island and Queens

Ten people who allegedly ran a massive prostitution and money laundering operation out of four foot spas in Huntington and Flushing have been indicted on charges ranging from enterprise corruption to promoting prostitution, court records show.

Investigators also seized two houses, seven cars and $300,000 in bank accounts, Suffolk County District Attorney Ray Tierney said in an interview. All the defendants are Chinese nationals, the district attorney said.

Prosecutors also are seeking the forfeiture of $1,079,040 generated by the alleged illicit businesses.

“We want to put people effectively on notice that we don’t want to see this type of illicit business in Suffolk County,” he said.

The investigation, conducted with Homeland Security Investigations, exposed a sophisticated criminal network, “all while hiding in plain sight right behind the doors of four massage parlors disguised as legitimate businesses,” Tierney said in a news release.

Although law enforcement efforts directed toward the illicit massage trade result in arrests and raids that have little apparent effect on the business, this investigation focused on the coordinators and managers, not the employees, he said.

“We’re de-emphasizing charging the women and emphasizing charging the people who have been benefited from the operation,” he said.

The investigation used audio recording devices, pole camera footage, GPS tracking of cars, subpoenaed financial and business records, Apple iCloud search warrants and court-authorized pen register and ping data, according to the bail application.

Investigators did extensive surveillance — including following women who bought supplies such as bottled water, neck cream and hand towels from Costco in Melville — and used undercover detectives who were offered sex acts for money at least 15 times, court records show.

The four foot spas identified in court papers include three locations in Huntington Station: Long Island Green Apple Spa on Jericho Turnpike, Lavender Spa on East Jericho Turnpike and Huntington Spa LLC, also on Jericho Turnpike. A fourth spa, 192 Spa, is located on Northern Boulevard in Flushing.

Long Island has become one of New York’s most active fronts in the roughly $500 million-a-year illicit massage business, a recent Newsday investigation found. Arrests at illegal massage spas have skyrocketed 1,200% in the last five years. Records show that police have raided at least 235 illegal foot spas in Nassau and Suffolk counties.

Despite the crackdown, many illicit massage businesses reopen immediately after having been raided. At least 85 have been raided more than once, according to records.

Flushing supports a thriving Asian community, and many of the women arrested on Long Island come from there. Courts records analyzed by Newsday show that three-quarters of the women arrested on Long Island in the last five years in cases live in Queens, many within a 1.5-mile radius of one another in Flushing.

Tierney said he had seen a proliferation of the illicit businesses while he was campaigning for office in 2021. He attributed that to “a perfect storm” of post-COVID habits, in which fewer people traveled into New York City, and the fact that many brick and mortar strip malls have been struggling to lease space and having to lower rents.

Suffolk Police Commissioner Kevin Catalina said in a recent interview that his department has been responding to community complaints.

“There’s concerns on many levels with massage parlors, but we’re going to continue to do enforcement on them,” he said.

Catalina said there’s a possibility that some women might have been forced into the business, a concern echoed by Pete Gizas, the acting special agent in charge of the New York office of Homeland Security Investigations.

“These defendants allegedly exploited vulnerable individuals,” he said in a news release. 

The alleged ringleader of the operation was Xiaolin Gong, 59, of Flushing. She owned the four foot spas that were fronts for prostitution. She also allegedly used the proceeds from the illicit businesses to pay mortgages on two properties — a house on Pidgeon Hill Road in Huntington Station and another property in Flushing, according to the indictment.

Gong also allegedly submitted false employment registration documents to the state Department of Labor, prosecutors said.

Her attorney, Christopher Gioe, of Hauppauge, did not return a call for comment.

The other eight women indicted in the case allegedly provided unlicensed massages, which is a felony, and offered to perform sex acts for money, which is a misdemeanor. The defendants include Xiaofang Cao, Meilan Zhou, Yuping Cheng, Shan Shan Gong, Yazhi Lyu, Xiaoxia Chen, Xiaomei Sun and Dongmei Yu.

Legal Aid attorney Susan Ambro, who represents Yazhi Lyu, declined to comment. Attorneys for the other women couldn't be reached for comment.

The only male defendant, Xiaoyi Liu, allegedly handled bank deposits and transported women to and from the foot spas, prosecutors said.

Danielle Papa, who is representing Liu, said he has denied the allegations and intends to fight the charges.

The coordinated money laundering scheme included multiple bank transfers and setting up a brokerage account at Charles Schwab, according to court records.

Detectives recovered $300 in cash and gold jewelry after executing search warrants at the spa.

“A lot of the activity originates from outside the county,” Tierney said. “We don’t want people using Suffolk for illegal conduct that affects our quality of life.”