AURORA | A Denver grand jury on Thursday indicted seven people and a dozen businesses for allegedly operating a complex human trafficking ring out of Denver massage businesses that had ties to Aurora.
Jurors handed down a total of 33 felony counts to the defendants who prosecutors said trafficked woman from China to engage in sex acts in massage entities across the Colorado’s largest city, Denver District Attorney Beth McCann said in a statement.
The indictment came after a year-long investigation deemed “Bad Apple” that involved federal, state and local law enforcement entities across the country.
“This illicit massage parlor network, coupled with several illegal marijuana grow houses, were operating in plain sight under the guise of legitimate business operations,” Attorney General Phil Weiser said in a statement. “The criminal enterprise extended across the Front Range and profited off of the exploitation of vulnerable people.”
The defendants were also indicted on charges tied to tax evasion, money laundering and large-scale black market marijuana distribution. The group operated in Colorado, Oklahoma, California and Louisiana, officials said.
Aurora authorities have been working with the federal government for years to combat the proliferation of both illegal massage parlors that serve as fronts for prostitution or human trafficking and large marijuana grow operations in suburban neighborhoods.
The complex investigation, which involved tracking phone, utility and transportation records, began in early 2019 after Aurora’s manager of tax and licensing, Trevor Vaughn, alerted Denver officials that massage businesses recently kicked out of Aurora for engaging in possibly lascivious activities were likely also operating in Denver.
Vaughn said he contacted the FBI on March 6, 2018 after conducting an audit of Ocean Foot Massage at 15300 E. Smoky Hill Road and finding evidence of human trafficking. Vaughn said several women at the facility refused to provide identification to investigators, and food and clothing was strewn about the premises, suggesting people were living there.
“That’s very cornering when you’re looking at an operation at risk for human trafficking and people won’t even identify themselves or cooperate with inspectors or law enforcement,” Vaughn said. “Without the documentation behind these individuals, it’s a good question to who are they, why are they there, and are they victims?”
The business had its license suspended the following day.
But Vaughn discovered that the business owner, Chen Kuo, operated another massage business, Apple Spa, just across the municipal border with Denver on East Dartmouth Avenue. That business remained open.
Aurora has closed approximately 20 massage facilities in the city in the past two years following the passage of an ordinance intended to shore up licensing requirements for such entities, Vaughn said.
The new licensing ordinance, which took effect in June 2018, outlined a gaggle of prohibitions for owners of massage parlors. Owners are now specifically barred from housing employees, keeping sex toys on the premises, and performing massages in the nude, among many other provisions, according to the city’s new business license application for massage facilities. Applicants must also submit an additional permit request to keep a table shower or vichy shower at their business.
Vaughn said the ordinance helped rid Aurora of such businesses.
“Websites for advertising and for reviews of sex workers show that the number of illicit facilities in Aurora has drastically reduced,” Vaughn wrote in a summary document for city council members. “While difficult to demonstrate with figures, licensing has also seen a reduction in applications for businesses that are suspected of being illicit.”
Vaughn said conducting background checks on potential proprietors has also helped weed out bad actors. Kuo was able to previously operate in Aurora despite having a felony conviction, Vaughn said. Now, such criminal histories prevent operators from opening in the city.
“Under current state laws, other than cities with local ordinances, he’s able to open a massage business even though he has a prior felony conviction for fraud,” Vaughn said.
The Denver businesses mentioned in the indictment include Denver Apple Spa, Tulip Spa, 21 Spa, Mojo Massage and others.
There are more than 9,000 illicit massage businesses currently operating throughout the U.S., according to the Polaris Project, a Washington D.C.-based nonprofit organization that advocates for anti-slavery policies. Those businesses net an estimated $2.5 billion annually.
The individuals named in the indictment, 45-year-old Kuo, 42-year-old Yi Ting Mo, 57-year-old Manqui Xu, 46-year-old Le Zhang, 49-year-old Ying Guo, 54-year-old Xiong Xie, and 33-year-old Xuelin Chen, will be tried separately in Denver District Court.