What looked like a chain of suburban massage parlors was, according to Suffolk County prosecutors, a cash-soaked criminal enterprise built on prostitution, unlicensed massages and a coordinated money laundering scheme.
On Thursday, prosecutors announced that 10 people and four corporations have been indicted following an investigation into massage parlors on Long Island and in Flushing that they say were fronts for prostitution and money laundering. Search warrants at four parlors and four residences earlier this week turned up cash, gold bars and other evidence, authorities say. Prosecutors allege the operation generated more than $1 million in revenue before they moved in.
The indictment centers on 59-year-old Xiaolan Gong of Flushing, who prosecutors say owned and operated four businesses named in the filing: Long Island Green Apple Spa Inc., Lavender Spa Salon Inc., Huntington Spa NY Inc. and 192 Foot Spa Inc. Prosecutors say Gong and co-defendant Yazhi Lyu submitted false employment registration documents to the New York State Department of Labor and pushed customers to pay in cash to conceal income, according to Daily Voice. "They built a criminal enterprise with a coordinated money laundering scheme designed to conceal their profits," District Attorney Raymond Tierney said in a statement cited by the outlet.
How Prosecutors Say the Spa Network Operated
Investigators allege that eight female co-defendants offered undercover officers sexual acts for cash while performing unlicensed massages, and that Xiaoyi Liu handled deposits and transported workers when Gong was away. Search warrants executed on Tuesday led to the seizure of cash, gold bars and other evidence, authorities say. Prosecutors also froze funds in multiple bank accounts and moved to seize two properties they allege were tied to the scheme, according to details in the indictment reported by Daily Voice.
Crackdown on Illicit Spas Intensifies
The case is unfolding against a backdrop of stepped-up enforcement against illicit massage businesses across Long Island. Coordinated undercover raids in April resulted in multiple arrests in Huntington and Massapequa, and Suffolk County Police press releases detail a series of similar enforcement actions and building-code violations at other spas. Prosecutors say the current indictment caps a months-long investigation involving county prosecutors and local detectives.
Felony Counts and High Stakes
Gong and seven co-defendants face top counts of enterprise corruption, while three additional defendants are charged with Unauthorized Practice of a Profession, according to the indictment. Enterprise corruption is a class B felony under New York law that covers participation in a pattern of criminal activity within an enterprise and can carry significant prison time and forfeiture of assets, per New York Penal Law. All charges remain accusations, and the defendants are presumed innocent unless and until proven guilty in court.
Gong was arraigned on Wednesday before Suffolk County Supreme Court Justice John B. Collins and was ordered held pending her next court appearance on Aug. 19, prosecutors said. The district attorney's office and Suffolk County Police are asking anyone with information about the alleged operation to contact investigators through their tip lines.
