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Massage parlors linked to sex crimes received more than $100K in COVID funds

We’ve provided plenty of coverage over the past couple of years regarding the hundreds of millions of taxpayer dollars that have gone missing through the federal government’s various COVID relief programs. Some of the biggest losses were seen in the Paycheck Protection Program, where it’s believed that as much as eight billion dollars was stolen. Most of that money was taken by thieves who defrauded the system via bogus claims about their “businesses.” But it turns out that there were other, legitimate businesses (or at least somewhat legitimate) who were able to put their hands out and rake in some of that sweet government cash when they probably shouldn’t have. New research from the Free Beacon reveals that a number of massage parlors qualified for and received COVID relief funds only to later be found to have been engaged in sex trafficking. These massage parlors didn’t rake in as much as some of the legendary fraudsters, but they still managed to nab more than $100K between them.

The federal government doled out thousands of dollars of COVID-19 relief funds to “happy ending” massage parlors, a Washington Free Beacon analysis found.

The Small Business Administration disbursed $117,000 to six massage parlors later busted for sex crimes, the Free Beacon found. At least $15,000 of those loans came from the agency’s Economic Injury Disaster Loan Advance program, which does not require repayment. The agency said that because these payments were classified as loans, businesses could avoid the more stringent reporting “requirements that come with a U.S. government grant.”

South Bend, Indiana’s Best Chinese Massage scored $98,000 in relief funds in June 2020. Two years later, police raided the parlor after undercover officers were offered sex. Police seized $88,538 in cash from owner James Belkiewitz, an amount roughly equal to the amount he borrowed from the government at reduced interest. Following the raid, workers told police that women were being held at the parlor against their will and forced to provide sexual services to customers.

Clearly, the massage parlor in South Bend, Indiana came out on top in the race for taxpayer funding. Of the six businesses that received COVID relief money, that one gathered more than 95% of the funds. It’s not that there’s anything inherently wrong with operating a massage parlor, and if the pandemic and the lockdowns were threatening to shut the business down, they could certainly try to claim some relief from the program, particularly if it kept their employees from earning a living.

But that’s the major sticking point here. According to the report, Best Chinese Massage didn’t actually have “employees” working for them, at least in some cases. They had women who were being held there against their will and forced to have sex with customers. If those women were being trafficked, they were unlikely to be getting much of the money that came in or benefit from the relief aid.

Another parlor in Denver received $14,000 from the government and was similarly later found to be forcing women to provide sexual services. Others that received federal funds were not convicted of human trafficking but were busted for illegal prostitution enterprises.

Another interesting point shows up in this article and it deals with the nature of the funds that the government was distributing. They were almost all identified as “loans” but they were “forgivable.” As the Free Beacon points out, there is a very specific reason for doing this. Government regulations impose much stricter reporting requirements and background checks for anyone receiving a grant. (That’s money that you don’t have to pay back.) But it’s much easier to qualify someone for a government “loan.” Since Washington was in such a hurry to rush all of this money out the door, they simply claimed that all of the disbursements were loans. But since the “loans” were “forgivable,” nobody had any intention of paying the money back. That goes for the happy-ending massage parlors as well.

I’m sure we will all rest easier tonight knowing that our tax money is entrusted to such competent, capable hands. And all of you who pay taxes in the United States were the generous benefactors who made it possible. I’m confident that all of the sex traffickers and hookers who wound up with your cash continue to be grateful.

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