A California man charged in connection with a high-end brothel ring that allegedly operated out of apartments in Greater Boston and Virginia also received some $550,000 in pandemic relief funds that may have been “fraudulently obtained,” according to legal filings.
A 12-page motion filed in US District Court in Boston referenced the relief funds and the extensive international travel of James Lee, 68, of Torrance, Calif., to argue for his detention pending trial.
Lee was arrested Wednesday in California and will make his initial appearance in Boston at a later date. No lawyer was listed for him in court documents filed in Boston.
Authorities allege that Lee rented at least five upscale apartments to be used as brothels, both in his own name and under assumed names. He is “regularly compensated by brothel owners ... for both leasing apartments to be used as brothels, and for his travel to and from the brothel locations,” prosecutors alleged.
Financial records indicate that Lee has several businesses and related bank accounts in his name and under aliases, which investigators “believe he uses to launder the proceeds of the prostitution business.”
According to the motion, Lee’s personal and business bank accounts have received more than $550,000 in COVID-19 relief funds meant to keep struggling companies afloat at the height of the pandemic.
Investigators also uncovered apparent financial irregularities in Lee’s business accounts.
“Traditional business entities often have recurring outgoing payments to certain vendors and recurring incoming payments from their customers, who are different from their vendors,” prosecutors alleged. “However, the activity in [Lee’s accounts] often reflect money originating from and getting paid out to many of the same business entities.”
The activity in his various accounts “does not appear commensurate with the listed purposes of his businesses,” prosecutors said.
“I therefore believe that [Lee] utilized these accounts to conceal and disguise illicit proceeds of the prostitution business, in addition to possible fraudulently obtained Covid-19 related relief funds,” prosecutors said.
In an effort to persuade the court that Lee is a flight risk and should be detained until trial, prosecutors listed a number of international trips he has taken in recent years.
Since 2017, Lee is believed to have traveled to eight different countries on 10 separate occasions, including a round-trip cruise from California to Mexico in September, trips to Singapore and Japan last year, a trip to Seoul in 2020, and stops in Vancouver and Bogota, Colombia in 2019.
“I believe there is a preponderance of the evidence to believe that [Lee] is a risk of flight,” a Homeland Security Investigations agent wrote in the motion.
Magistrate Judge David H. Hennessy hadn’t ruled on the motion as of Thursday afternoon.
Also charged in the case are the alleged ringleader, Han “Hana” Lee, 41, of Cambridge, and Junmyung Lee, 30, of Dedham. They were both ordered held without bail pending a detention hearing slated for Nov. 13.
Their lawyers declined to comment Wednesday.
Junmyung Lee allegedly helped set up customer appointments, transported sex workers to apartments, and collected prostitution proceeds, according to court papers. In June 2022, he wrote on a rental application that he was a student with “no discernible income,” an affidavit said. But two days later, he deposited $35,700 into a personal checking account, the filing said.
On June 20, he bought a 2018 Chevrolet Corvette from a dealership in Quincy for close to $70,000, with a down payment of $25,500, the filing said.
Between December 2019 and October 2023, Han Lee deposited just under $795,000 into her personal bank accounts, the affidavit said.
“I also do not believe that there is any reason for [them] to have access to such a large amount of cash during a short period of time unless that cash was through an illegal enterprise like this prostitution network,” the affidavit said.
Material from prior Globe stories was used in this report.
Travis Andersen can be reached at firstname.lastname@example.org.