Authorities investigating prostitution ring they say used Asian immigrants
More thank $550K in cash deposits believed linked to business
By Steven Kreytak



Saturday, May 30, 2009

An Austin woman and others are accused of running a prostitution ring that advertised in the Austin Chronicle and on Craigslist and employed a rotating corps of prostitutes, according to a federal search warrant affidavit filed this week.

The affidavit said authorities — concerned that the women were trafficked into the country to be prostitutes— have been watching the ads closely, along with a series of apartments, hotel rooms and storefronts around Austin that served as brothels.

Hong Yan Li of North Austin was arrested and charged with aggravated promotion of prostitution in state court this month; authorities said she and another woman offered undercover officers sex for money. They were working out of a storefront in a Research Boulevard shopping center, the affidavit said.

Since 2003, Li, 38, has deposited more than $500,000 in cash into her bank accounts, and authorities think that she did not pay appropriate taxes, the affidavit said.

She has not been charged in federal court, but the search warrant affidavit accuses her, Christopher North-Keys and others of conspiring since 2004 to run brothels and of money laundering. They are also accused of conspiring to harbor or transport illegal immigrants, or cause them to be transported, into the United States for prostitution. The affidavit said more than once that Li was driving with Asian women who were later found to be in the country illegally.

The warrant sought to search a safe deposit box kept by Li. It is unclear whether the search has happened.

North-Keys, 43, has not been charged. He said in an interview that he did not participate in running brothels.

The affidavit says he created two Web sites for Li's business — bestasianspa.com and easternsecret.com — that were constantly updated with descriptions of available women. He is also accused of leasing apartments that were used as brothels.

North-Keys said he is a software engineer and created the Web sites for a fee. He said he subleased an apartment to Li because he thought she could not lease one herself because she was not a citizen. He said he earned a small amount on the deal.

He said he soon learned that the apartment was being used as a brothel. "Over time, I realized that it wasn't something I wanted to be involved in," he said.

At one point, North-Keys said, he encouraged Li to open a legitimate business — "even just an honest massage parlor scenario, because they have these in Austin."

He said he cut ties with Li last year and has talked about the case with police.

"The detectives are convinced, as far as I can tell, that I don't have involvement in most of this," he said.

A spokesman for the Internal Revenue Service criminal investigations division, whose agent wrote the affidavit, declined to comment.

Li's lawyer on the state case, Robert Buford, said he expects her felony case in state court to be reduced to a misdemeanor. He said that such a felony charge requires prosecutors to prove that at least two women were working as prostitutes for Li and that only one was at the storefront when Li was arrested.

Buford also questioned why authorities have targeted Li.

"This business that she's in is de facto legal," he said. "If you go drive up I-35, there's these places everywhere.

"What's so bad about what Hong Li has done compared to all of these other people who are running these establishments?"

The affidavit states that Austin police began investigating in March 2007 when an apartment manager at the Marquis at Ladera Vista apartment complex on Jollyville Road told them that a resident was complaining about men coming and going from an apartment.

They learned that the apartment was leased to North-Keys, began surveillance there and later saw Li coming and going, the affidavit said.

Soon, through leasing and utility records, they linked other locations to the alleged prostitution enterprise, including a unit at Tuscany Apartments at 13355 U.S. 183, the affidavit said. There, a maintenance supervisor said he thought the apartment was a brothel, the affidavit said. The supervisor said that he saw an Asian woman having sex with someone when he was on a maintenance call and that at other times he has watched groups of Asian women come and go, the affidavit said.

The affidavit said that Li placed prostitutes in a room in the Homestead Studio Suites hotel on U.S. 183 North and in the shopping center at Research Boulevard and Burnet Road, called the Colonnade. The suite that Li is accused of operating from was empty Friday; the front door held two sheets of paper dated May 14 notifying the tenant — identified as Sunrise Beauty & Health Center Inc. — that the locks had been changed.

Authorities also watched Li's Austin house on Crazy Well Drive, near Cedar Park. In her garbage, they found dozens of empty cigarette boxes, each filled with dozens of condom wrappers, a way of counting customers, the affidavit said.

skreytak@statesman.com


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