Employees at a Bismarck massage business that was raided in September were paid just $10 for conducting an $80, one-hour massage and were encouraged to offer sex acts to make extra tip money, a police detective testified Monday as the alleged operators of the business pleaded not guilty to facilitating prostitution.
Some of the workers at Hong Kong Spa also paid the owners $20 a night to stay at the business, said Detective Jerry Stein, who testified at the preliminary hearing for Jiang Jennings, 56, and Lance Jacobson, 65, both of Hanover Park, Ill. The two were charged with facilitating prostitution after police raided the business and the Tokyo Q spa in Dickinson.
A third man, Craig Grorud, of Bismarck, was arrested about a week later. He, Jennings and Jacobson will be tried together. Grorud pleaded not guilty earlier.
The raid in Bismarck followed a long-term investigation into the business, police said at the time. Jennings and Jacobson also owned Tokyo Massage in Mandan. An investigation of that business resulted in the closure of the spa without any charges being filed.
Stein testified that undercover police and confidential informants were offered sexual acts at Hong Kong Spa and Tokyo Q spa in exchange for money but none accepted. An employee at Hong Kong Spa complained to Bismarck police that she was directed by Jennings and Jacobson to offer sexual acts to earn extra tip money, Stein said. The woman was recruited by Jennings after answering an ad looking for masseuses to come to Bismarck. Jennings arranged transportation for some new employees but they were required to reimburse her for those costs, Stein said. Employees were trained to watch for recording devices worn by customers in an effort to spot law enforcement.
Stein testified that an informant at the Dickinson business told authorities that Jennings inappropriately touched him three times during a massage and offered to have sex with him.
Attorneys representing Jennings and Jacobson argued that the case should not move forward. Law enforcement never saw Jennings at the Bismarck business and there was no proof of an exchange of money for sex, said Jackson Lofgren, her attorney.
“No one that was sent in by law enforcement or made a complaint to law enforcement can verify that a sex act was ever done,” he said.
Tom Dickson, attorney for Jacobson, said there was no evidence that the business was regularly used for prostitution.
“There’s no evidence of any sex act,” Dickson said. “There is no evidence of an agreement to engage in sexual activity with another for money.”
Jennings and Jacobson were in charge of the finances at the business and had control over the facility, Burleigh County State’s Attorney Julie Lawyer said.
“Jennings herself at the Dickinson spa was providing sex acts to customers there, so obviously knows what’s going on at her spa facilities,” Lawyer said.
South Central District Judge Bobbi Weiler moved the case forward, saying part of statute under which the two are charged deals with promoting or facilitating prostitution. She scheduled a four-day trial starting Jan. 21, 2021.
Lofgren declined further comment on the case. Dickson did not immediately respond to a request for comment after the hearing.
The North Dakota Secretary of State’s office lists Grorud as the owner of the Hong Kong Spa. The Tokyo Q Spa is owned by TM Enterprise Group LLC. Grorud and TM Enterprise Group are listed under the same Bismarck address.
Grorud was a “shell owner,” Stein alleged. He said an employee told him that Jennings and Jacobson were paying Grorud to put his name on the business because they had attracted law enforcement attention while in Mandan.
Reach Travis Svihovec at 701-250-8260 or Travis.Svihovec@bismarcktribune.com
Be the first to know
Get local news delivered to your inbox!