NEW MEXICO (KRQE) – A California woman who has owned Asian massage parlors all over New Mexico is facing federal prostitution and money laundering charges. The federal search warrant states the investigation revealed the vast majority of Asian massage parlors in Albuquerque, and New Mexico operated as houses of prostitution.

Lily Bai has owned massage parlors in Albuquerque, Farmington, and Silver City. She was arrested for what happened at a store in Las Cruces. Federal authorities say Bai knew about and encouraged the illegal activity at her massage parlors and that it was necessary to attract a sufficient customer base to make the businesses profitable.

“It is horrifying. Having this many massage parlors in town is horrifying on so many levels,” says Christine Barber, executive director at Street Safe New Mexico. She has been tracking these businesses for years.

“Historically, within the law enforcement community, trying to make a case on these cases. It’s difficult. So they go after the business because that’s the way to shut them down,” Barber says.

The investigation has been going on for almost four years. Bai stated the masseuse who worked at the San Mateo parlor lived at the facility. “There are little areas in the back of the massage parlor that are fenced in, and you can see that someone’s living in that little fenced in area of they’re staying in a bed in the back – just a cot,” says Barber.

A search of New Mexico Workforce Solutions records revealed there were no wages reported by Bai for five years. But her 11 bank accounts totaled deposits of more than $630,000.

The search warrant states undercover investigators visited Bai’s massage parlors posing as customers. Each time, they were offered sex in exchange for money. Federal investigators say masseuses are effectively coerced into performing sex acts on customers to earn enough money for their basic living expenses like food and personal items.

“The women who are there, they may end up having to pay for their own conditioner, pay for their own shampoo, and they’re paying the madam. They’re not allowed to eat,” says Barber.

Bai told undercover officers she was told the massage parlor business is better in New Mexico because, in other states, they check massage licenses, and here, they do not. Bai is facing a seven-count federal indictment for the Las Cruces business.