Charges filed in prostitution scheme at three "spas"

Federal agents have arrested a California businessman and one woman on charges of conspiracy to transport prostitutes across state lines and money laundering after a two-year investigation into several King County tanning salons.

Donald Kerry Frey, 36, of South Lake Tahoe, Calif., and Nguyen Tran Nguyen, also known as "Stacey," 26, appeared Tuesday before U.S. Magistrate Judge Brian Tsuchida. Both were ordered held pending formal arraignment and detention hearings on Friday.

The indictment was issued earlier this month, but unsealed Tuesday with the arrests. Also charged was Minh Thuy Thi Nguyen, aka "Jackie," who remained a fugitive, according to the U.S. Attorney's Office.

Prosecutors allege Frey, through a holding company called Crown Venture Capital, owned the now-closed Aloha Tanning Resort in Renton; the Avalon Spa on Aurora Avenue North in North Seattle; and the Malibu Tanning Spa in Tukwila. They alleged the salons operated as brothels for itinerant prostitutes traveling a circuit between the West Coast and Texas.

Nguyen Tran Nguyen, according to the indictment, had booked more than 70 airline tickets to bring prostitutes into Seattle since early 2007. Once here, they would work at the spas for several weeks and then move on.

The women, mostly Asians, would advertise on a variety of Web sites. Federal agents recently searched several e-mail accounts through which clients would book their services, according to court documents.

Agents and detectives from Immigration and Customs Enforcement, the Internal Revenue Service, the Seattle Police Department and the King County Sheriff's Office on Tuesday served search warrants on the spas, two homes, a boat and several vehicles.

Over the past two years, several undercover officers and informants have visited the spas and have been offered sex for money, according to the indictment.

The warrant for the e-mail accounts alleged that Frey would travel between California, Nevada and Washington to collect money from spas. Each of the King County spas was expected to pay him $30,000 a month, according to the manager of one of the spas who became a police informant.

The indictment alleges he knew the spas were brothels. The warrant says Frey and a business partner had been under investigation for prostitution in Southern California as well.

Nguyen Tran Nguyen replaced the informant as manager of the Malibu spa, according to the warrant.

Spa managers made their money by taking a cut of a minimum $60 fee charged to each customer through the door. The prostitutes would charge between $80 and $300, depending on the sex act "and the generosity of the male client."

Assistant U.S. Attorney Yee-Ting Woo said there was no evidence that the women working at the spas were coerced or otherwise pressured to work as prostitutes.

Mike Carter: 206-464-3706 or mcarter@seattletimes.com.