10 Defendants Indicted For Operating A Prostitution Racketeering Enterprise Involving Approximately 40 Bay Area Brothels

SAN FRANCISCO – A federal grand jury in San Francisco has indicted 10 defendants for their alleged role in a far-reaching prostitution racketeering enterprise that recruited Asian women to work as prostitutes in approximately 40 brothels located throughout the Bay Area, announced United States Attorney Melinda Haag, Tatum King, Acting Special Agent in Charge for U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) San Francisco, and Police Chief Susan Manheimer of the San Mateo Police Department.

The defendants – Allen Fong, Ya Huai Hung, Leow Wan Ru Veron, Robert Chun, Jie Mu, Laurence Shu Kwan Lee, Kevin Hartig, Waylon Fong, Angelina Chuong, and Chonthicha Jaemratanasophin – are charged with Conspiring to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity; Use of Facility in Interstate and Foreign Commerce to Promote Prostitution; Laundering of Monetary Instruments; Importation of Aliens for an Immoral Purpose; and Transportation in Interstate and Foreign Commerce for Prostitution.

According to the indictment, all 10 defendants are charged with Conspiracy to Conduct a Racketeering Enterprise for operating 40 brothels in the greater San Francisco Bay Area from at least August 2002 through July 2014. Members and associates of the Enterprise solicited, enticed, and persuaded adult females, primarily from Asian countries, to work for the Enterprise as prostitutes in the Northern District of California. The Enterprise rented the apartments used as brothels through nominee lessees for limited periods of time, and then opened other brothels, often with overlapping rental periods. The Enterprise used social networking websites such as MyRedbook.com, Craigslist.org, and Backpage.com to post advertisements for prostitution services, which included contact information and photographs of nude and partially nude women assuming provocative and suggestive poses. The Enterprise’s telephone operators answered the calls for telephone numbers posted on the website advertisements for prostitution services, coordinated the meeting place between the prostitutes and their customers (“Johns”), and directed the “Johns” to a particular brothel. The prostitutes kept approximately two-thirds of their earnings from the “Johns” and paid one-third to the Enterprise, primarily through Allen Fong, the alleged ringleader of the Enterprise.

The Enterprise allegedly operated brothels in the cities of Pinole, San Mateo, Redwood City, Sunnyvale, Belmont, Fremont, Cupertino, Santa Clara, Foster City, San Bruno, Colma, and South San Francisco.

The indictment further alleges that, from at least March 4, 2004, through Oct. 3, 2013, members of the Enterprise sent numerous outgoing international wire transfers to Asian countries such as Singapore, Thailand, China, Hong Kong, Taiwan, Vietnam, and the Philippines, including to known Enterprise members and prostitutes. Enterprise members sent at least twenty-three international wire transfers, totaling $179,218.00, to Leow Wan Ru Veron, the Enterprise’s recruiter of prostitutes in Singapore. Chonthicha Jaemratanasophin, an Enterprise prostitute, funded twenty international wire transfers, totaling $109,300.00, to Singapore and Thailand.

As set forth in the indictment, Allen Fong, 58, of San Mateo, is charged in all thirty-two counts of the Indictment with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, Conspiracy to Use Facility in Interstate and Foreign Commerce to Promote Prostitution and substantive counts of Use of Facility in Interstate Commerce to Promote Prostitution, Conspiracy to Launder Money and substantive counts of Money Laundering, and Conspiracy to Transport for Prostitution and Importation of Alien for Immoral Purpose;

• Ya Huai Hung, 53, a citizen of Taiwan, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, Conspiracy to Use Facility in Interstate and Foreign Commerce to Promote Prostitution, Conspiracy to Launder Money and substantive counts of Money Laundering, and Conspiracy to Transport for Prostitution and Importation of Alien for Immoral Purpose;
• Leow Wan Ru Veron, 53, a citizen of Singapore, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, Conspiracy to Use Facility in Interstate and Foreign Commerce to Promote Prostitution, Conspiracy to Launder Money and substantive counts of Money Laundering, and Conspiracy to Transport for Prostitution and Importation of Alien for Immoral Purpose;
• Robert Chun, 54, of San Francisco, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, Conspiracy to Use Facility in Interstate and Foreign Commerce to Promote Prostitution, and Conspiracy to Launder Money;
• Jie Mu, 43, of San Francisco, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, Conspiracy to Use Facility in Interstate and Foreign Commerce to Promote Prostitution, Conspiracy to Launder Money, and Conspiracy to Transport for Prostitution and Importation of Alien for Immoral Purpose;
• Laurence Shu Kwan Lee, 36, of San Francisco is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity and Conspiracy to Use Facility in Interstate and Foreign Commerce to Promote Prostitution;
• Kevin Hartig, 58, of Daly City, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity and Conspiracy to Launder Money;
• Waylen Fong, 70, formerly of San Mateo, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity and Conspiracy to Launder Money;
• Angelina Chuong, 39, of San Francisco, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity and Conspiracy to Launder Money; and
• Chonthicha Jaemratanasophin, 48, a citizen of Thailand, is charged with Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity and Conspiracy to Launder Money.

Allen Fong, Robert Chun, Jie Mu, Laurence Shu Kwan Lee, Kevin Hartig, Angelina Chuong, and Chonthicha Jaemratanasophin were arrested today and made their initial appearances in federal magistrate court in San Francisco. Chonthicha Jaemratanasophin was detained. The other defendants were released on bonds ranging from $100,000 to $500,000.

Allen Fong’s next scheduled appearance is at 2:30 p.m. on Dec. 16, 2014, before the Honorable Richard Seeborg, United States District Court Judge. The other defendants are scheduled to appear for continued proceedings in Magistrate Court at 9:30 a.m. on Oct. 29, 2014.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum sentence of twenty years’ imprisonment for Conspiracies to Conduct a Racketeering Enterprise and Money Laundering; ten years’ imprisonment for Conspiracy to Import Alien for Immoral Purpose and Transportation in Interstate and Foreign Commerce for Prostitution; and five years’ imprisonment for Conspiracy to Use a Facility in Interstate and Foreign Commerce to Promote Prostitution. The fines range from $250,000 to $500,000, or twice the gross profits or value of the funds, whichever is greater. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Deborah R. Douglas is the Assistant United States Attorney who is prosecuting the case with the assistance of Assistant United States Attorney David Countryman, Christine Tian, and Daniel Charlier-Smith. The prosecution is the result of a joint investigation by ICE HSI, and the San Mateo Police Department.

(Fong indictment )