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KRDO exposes property owners enabling illicit spas with ties to human trafficking

Since our ” Hiding in Plain Sight ” investigation into southern Colorado’s Asian spas started in May, our team has uncovered many layers of illegal activity, the worse being signs of human trafficking happening right in our own backyard.

But we were shocked by the response from one of the most important groups involved in enabling these illicit businesses to keep operating: the property owners leasing to the spas.

Reporter Stephanie Sierra traveled across the state to inform each and every member of this group of the illegal activity going on. But most of the owners felt no responsibility to step in.

One of the most belligerent interviews was with the owner of the Colorado Springs property where Lotus Massage resides, Michael Reeg . We were invited to stay at Reeg’s office for the on-camera interview, but within minutes of his arrival the interview became violent.

” Hi, Michael. I’m Stephanie with NewsChannel 13, ” Sierra said as she waited in the lobby of his business ” Tri-Star Masonry. ”

” What do you need? ” Reeg asked.
” I just have a couple questions for you regarding a story we’re working on, ” said Sierra.
” OK, hit me with them. Shoot, ” Reeg said.
” You’re currently leasing to Lotus Massage, ” said Sierra.
” Why don’t you guys get the hell out of here, ” Reeg replied.
“Are you aware you’re leasing to an illicit massage parlor?” Sierra asked as she was leaving his office following a scheduled interview.

Reeg then grabbed Sierra’s arm and hit the camera.

Whether it was chaos or causal conversation, our team experienced it all. Some of the owners were civil and open to resolving the issue, like Frank Polland , the property manager of Springs Massage.

“I suggest you take another look,” Sierra said to Polland .

“OK, I will,” he said.

But, most of the 36 who we contacted either showed no interest, were allegedly out of town, or just simply didn’t like our questions.

We repeatedly got many variations of the following responses:

” All I know is he’s been out of the country for the last 6 to 8 weeks. ”
“Can you stop it? Also … can you stop it? ”
” What was that? I’m not going to talk to you. ”
” I don’t like that question. ”

As for the others, many didn’t even make it to the door.

In one case, our attempt to get a comment from property owner Silvio Bonicelli , currently leasing to ” A&S Spa ” off Fillmore in Colorado Springs, ended with his registered agent running away from our crew and closing down the shop.

We traveled all across the state, hitting nearly every major city and suburb of northern and southern Colorado with the intention to get all sides and alert the group of the illegal activity going on under their watch.

But like the incident with Reeg , most attempts that started with a simple question ended with a belligerent, hostile response.

“Get the f*** out of here,” screamed the son-in-law of the property owners leasing space to Bangkok Thai Spa in Colorado Springs.

“Turn that s*** off,” said the HOA President overseeing the complex where Paris Spa used to be located in Colorado Springs.

Simply put: most of these property owners feel no responsibility to stop this.
John Litherland , for example, is unlike most property owners who lease out their entire strip mall. Litherland leases his single-family home directly to an illicit spa.

” Don’t you feel you have an obligation, as the landlord, you have the authority to end this? ” we asked.

” I don’t believe I have an obligation, ” Litherland said.

During the interview, we shared with Litherland the explicit reviews made about the spa he’s leasing to called Sweet Relax Therapy.

” I know this exists throughout Colorado Springs, I agree with you, ” he told Sierra. “But I believe you’re incorrect.”

Yet despite holding the proof in his hand, he never addressed my question.

” Will you take another look? Because that’s the proof for you right there, ” he said.

The example with Litherland is what our team saw time and time again.

The reason why always traced back to money and ” looking the other way. ”

” I have nothing to do with this, OK? ” said Gary Winegar , a prominent real-estate management executive in Colorado Springs.

Winegar’s company ” Griffis Blessing ” manages the property where one of the spas with the most explicit sale of sex is located.

“All we do is collect the rent, make sure the property is clean and that sort of thing,” said Winegar .
” You have the power to do something, ” Sierra said.
” I don’t have the power to do anything, ” Winegar answered.

But legal experts don’t agree.

” That statement of no authority to do anything, that didn’t add up, ” said attorney Debra Fortenberry .

Just a simple review of their website with Fortenberry , who specializes in commercial real estate law, made it clear Griffis Blessing does have the authority to step in.

On the company website, the following services are offered:

COMMERCIAL PROPERTY SERVICES
LEASE ADMINISTRATION
PROPERTY MANAGEMENT
TENANT RELATIONS
LEGAL RISK MANAGEMENT

” Does legal risk management include authorizing legal action against a tenant for breaking the law? ” Sierra asked Fortenberry .

” Yes, it does. That’s usually within a typical property management agreement, ” Fortenberry said.

A typical commercial lease prohibits illegal activity by a tenant on the premises, giving the property manager and the landlord the authority to evict.

” It has never been easier to take action, ” said Fortenberry , citing a recent Colorado law that has streamlined the eviction process when it comes to troubled tenants. ” It makes it easier for landlords and their agents including the property managers and even their lawyers to evict. ”

But unlike Winegar and his colleagues, our coverage has prompted some to take action or promise to take action, like the owners of the shopping center that lease to Bangkok Thai Spa and My Massage Place.

Since our series has aired, Griffis Blessing reports they’ve notified the property owner of the illegal activity going on at Shiatsu Health Spa. As of Tuesday, it’s still operating.

As a post-note, Colorado Springs Police did cite Reeg with a harassment charge.

Reeg is due in court Friday, Oct. 18.

KRDO Only 2019

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