US legal loopholes let traffickers profit from illicit massage parlours, report says

Loopholes in US laws allow thousands of illicit massage parlours to operate without revealing their ownership, letting sex traffickers hide their crimes, a leading anti-slavery group said on Thursday.

Neither the federal government or individual states require companies to name their actual owners when they register as businesses, Washington-based Polaris said in a report.

Polaris estimates more than 9,000 illicit massage parlours operate in the United States, earning nearly $2.5 billion a year. Thousands of women sell sex services in the parlours, many of whom are believed to be victims of trafficking, Polaris said.

"The privacy of the actual owners of the businesses where these sexual acts take place is scrupulously protected by US law," Polaris said in its report.

"The laws governing business registration are almost tailor-made for massage parlour traffickers to hide behind," it said.

There is no official estimate of the number of trafficking victims in the United States, but Polaris puts the figure in the hundreds of thousands.

Globally, more than 40 million people are victims of trafficking, according to the International Labour Organisation. An estimated four million are forced into sexual exploitation.

For the massage parlour business, shielding ownership information makes it difficult for law enforcement to track down traffickers profiting from illegal practices, Polaris said.

Polaris looked at more than 6,000 massage businesses with available records and found only about one-quarter listed an actual person on their registration records.

Just one in five named some form of ownership, but that could be anonymous shell companies, it said. Sometimes the name of the owner is left blank.

Typically, trafficking victims in massage parlours are recent Chinese or South Korean immigrant mothers who speak little or no English and are burdened by debt, the group said.

Polaris called for more transparency of business ownership, saying state and federal laws should require businesses to register their actual owners and face prosecution if they fail to do so.

Some legislation has been introduced in the US Congress that would have states or a federal government agency collect such information, it said.