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Former Massage Parlour owners charged in '96 slaying of ailing dad
By IAN ROBERTSON, SUN MEDIA
The Toronto Sun
Arrest in 12-year-old murder case

HAMILTON -- A brothel-keeper who backed Mafia boss John Gotti's bid for freedom is now charged in the 111/2-year-old slaying of a father waiting for a heart transplant. Joseph James "Joe" Drosi was 24 when he drove through a blizzard four years earlier to observe John "Dapper Don" Gotti's 1992 trial in New York. Drosi told Sun columnist Joe Warmington his dream was "to work with Gotti."
He said "I needed to see a true champion of the people. I'm fascinated with him."
The crimelord was convicted in federal court that year of murder and conspiracy and died in prison in 2002. Gotti's biggest Canadian fan rejoined his father in a kitchen countertop business, but police later learned of Drosi's visit to Brooklyn. Involved in drugs and prostitution, police sources said he was protected until recently by the Outlaws biker gang. Drosi and his wife Lynda ran the now-defunct Studio 37, a Barton St. massage parlor fronting as a whorehouse. On May 25, 2001, 10 months after police seized $300,000 in cash, two rifles, jewelry worth $100,000, plus drugs and arrested seven women aged 16 to 19, the couple pleaded guilty to keeping a common bawdy house. Drosi was sentenced to three months in jail, his wife to a year on probation. They wed in 1997, soon after ailing architecture student Gary Gatecliffe -- Lynda's ex-boyfriend and father of their then 4-year-old daughter Faith -- was shot in the forehead in bed in his Burfield Ave.-Upper Ottawa St. bungalow on Oct. 3, 1996. Interviewed over the years, Gatecliffe's ex and her husband were prime suspects in the gang-style murder, homicide Staff-Sgt. Ian Matthews said yesterday. They were arrested quietly Wednesday on King St. Two hours earlier, Matthews joined an ex-Gatecliffe investigator and part of the Hamilton Police-OPP squad that revisited the case last year, to alert the victim's kin. "This was a very emotional meeting," he said in an interview.
Heather Gatecliffe told the Sun "I'm very happy" about the arrests in her brother's murder. "We were very close." Matthews said the murder was not tied to criminal activity. The veil of silence began to crumble when seven accused drug dealers were arrested over the past month, he said. Their names have not been released due to an ongoing probe and hunt for an eighth suspect, but several facing cocaine trafficking plus conspiracy charges "are now witnesses in this homicide investigation," Matthews said. Yesterday, Drosi and his wife, both 41, were in a downtown courthouse charged with first-degree murder, plus obstruction of justice, described as a bid for Faith -- now 15 and under Children's Aid care -- to commit perjury. The couple are due back in court May 20.
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York Region Editorial
Sep 12, 2007 09:05 PM
About 10 years ago, York Region municipalities declared war on an ugly stain that had spread throughout industrial areas and strip malls, angering nearby residents and businesses. Body rub parlours were really fronts for prostitution — or so we all thought.
Municipalities created bylaws to get rid of them, police stepped up investigations. When a triple murder was linked to a “spa” in Markham, police started raiding them, shutting down many. By last year, most had been removed from commercial plazas, however, police discovered the sex trade had relocated into residential neighbourhoods. And now a judge has ruled what went on at a Vaughan body rub parlour may not be illegal.
Justice Howard Chisvin dismissed two bawdy house charges against the manager of Studio 176 ruling that masturbation isn’t necessarily sexual; that if a client pays for a full body massage it can legitimately apply to every part of the body without it being a sexual act. It’s too soon to tell if this ruling will be applied across the board.
Municipal bylaws have restricted the number and location of body rub parlours, required licences and imposed other restrictions to discourage such operations. Some owners have challenged bylaws, such as Healing Hands Studio and Executive Spa, which filed legal action in 2005 challenging 14 sections of Markham’s body rub licensing bylaw, including those requring attendants to keep their clothes on. At the time, Healing Hands owner Pierre Penninkhof commented, “Is there sex going on inside? It depends on your definition of sex.” It sounds suspiciously like the judge has just bolstered his argument.
It seems likely that, should their “full body massages” be declared legal, owners might become bolder about fighting municipal restrictions. We can’t afford to wait and see how this ruling plays out. Local mayors should urge the Crown to appeal now. While some might argue this is a victimless crime, the results of police raids over the years would suggest otherwise. Girls as young as 15 were found working in one Vaughan establishment in 2005. Other investigations found women working as virtual slaves to pay the alleged costs of bringing them here. We have a right to determine community standards and enforce them.
Politicians made an issue out of body rub parlours because a lot of people complained. They don’t want prostitution in their neighbourhood. And while our courts might want to join former president Bill Clinton in quibbling about the definition of sex, most people still recognize that what goes on in these places is prostitution. We should have the right to say no to it.
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The fund manager, the stripper and the missing millions

PAUL WALDIE
Globe and Mail Update
October 18, 2007 EDT
Canada's hedge fund industry has its share of rogues, but few are as colourful as Paul Eustace.
By his own admission in a deposition filed in court, Mr. Eustace lied to investors, lost $208-million (U.S.) in his hedge funds and stole roughly $2-million of client cash. He has also acknowledged cheating on his wife with a stripper for years and using investor money to give his lover $1-million worth of gifts including paying for breast augmentation surgery.
Now Mr. Eustace, 42, faces the prospect of going to jail over allegations he violated court orders and used money that belonged to creditors to cover personal expenses such as tuition for his children's private school.
“Eustace's varied and endless acts of fraud were perpetrated on such a grand scale that it has not only cost innocent investors hundreds of millions of dollars, but has helped to cast a dark cloud over the entire hedge fund industry,” alleges a motion filed in a U.S. court this week by a receiver who is searching for assets.
The allegations have not been proved.
Mr. Eustace, who lives in Oakville, Ont., was unavailable for comment but in court filings he said he didn't know about some of the court orders and was only trying to pay legal bills.
Little was known about Mr. Eustace until June 23, 2005, when regulators in the United States and Canada shut down his company, Philadelphia Alternative Asset Management Co. (PAAM), and froze his bank accounts.
Mr. Eustace is an American and while he ran PAAM out of Oakville, it had operations in Philadelphia. The U.S. Commodity Futures Trading Commission has since banned Mr. Eustace for life from “engaging in any commodity-related activity.”
The company collapsed into receivership in Philadelphia and the receiver, Clark Hodgson, has filed a series of lawsuits in a bid to recover assets. Hundreds of pages of documents filed in court this week by the receiver's lawyers revealed new details about Mr. Eustace and how he allegedly operated.
Mr. Eustace grew up in Connecticut and got a job with an accounting firm after graduating from the University of Pennsylvania in 1987.
In 1990, he joined Trout Trading Co., a Chicago-based hedge fund founded by his childhood friend Monroe Trout. Mr. Trout sent him to Toronto to set up a subsidiary and Mr. Eustace moved to Oakville with his wife and two children.
In his spare time, Mr. Eustace frequented the Locomotion Cabaret in Mississauga where he met Denise Nadeau, a 21-year-old stripper.
Soon Mr. Eustace was buying Ms. Nadeau expensive gifts, paying for her breast surgery and taking her on trips to New York and Bermuda, where Trout had an office. But Ms. Nadeau's presence in the Bermuda office rankled Mr. Trout and in 1998 he fired Mr. Eustace.
In court filings, Mr. Eustace said he left Trout with nearly $10-million and set up a company called Windas Ltd., naming Ms. Nadeau as a director. Windas didn't last long and in 2000 Mr. Eustace founded a hedge fund called Option Capital Fund with the backing of a few investors including the estate of his dead mother.
It wasn't long before he set up PAAM and opened an office in Philadelphia with the help of a university friend who was in the commodity business. The company managed to attract some prominent directors including John Wallace, vice-chairman of the Philadelphia Stock Exchange.
Mr. Eustace was a generous boss. Salaries for some junior employees reached $275,000 and many received free cars, according to the court filings. When a friend told him about her difficult divorce, Mr. Eustace bought her a new Volvo. His own salary topped $2-million annually.
While PAAM grew, Mr. Eustace's personal life deteriorated. His relationship with Ms. Nadeau soured and she allegedly threatened to tell his wife about their affair unless he gave her money. Mr. Eustace allegedly paid Ms. Nadeau as much as $50,000 at a time and bought her a house and appliances. He also allegedly gave $87,000 to a man named Zack who had threatened to kill Ms. Nadeau unless she repaid a loan.
The receiver estimated the total amount he spent on Ms. Nadeau exceeded $1-million.
By 2005, Ms. Nadeau wasn't his only problem. His funds, which had nearly $300-million in total assets, tanked mainly because Mr. Eustace had made a wrong call on U.S. interest rates.
Rather than tell investors the truth, Mr. Eustace admitted in court filings that he sent fake monthly statements showing strong growth. He also acknowledged taking investor money to pay his salary.
By the time the CFTC moved in, more than $200-million had evaporated. Mr. Eustace insisted he could have turned things around by August if regulators had held off.
The receiver alleges Mr. Eustace hid assets that belonged to investors after PAAM collapsed. He allegedly sold a Rolex watch, a Porsche and company computers containing reams of client data, pocketing all the cash. The receiver wants him jailed until he provides a full accounting for his assets.
While the legal saga plays out, Mr. Eustace remains in Oakville with his family. He also has a job, working for $25 an hour (Canadian) as a bookkeeper at a law firm.


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Mar. 7, 2006. Unknown Source. Criminal charges have been stayed against a former Toronto beauty pageant winner for her alleged role in a massage parlor robbery. Crown prosecutor Marcus Felix yesterday told Justice Kathryn Hawke he was staying all charges against Zenovique Wilson, 20, and Shawnese Chisholm, 19, of Mississauga for their alleged roles in the robbery at a massage parlour in Mississauga and the planning of another heist in Brampton.
The two women and three men were scheduled to begin a preliminary hearing yesterday in a Brampton courtroom. Wilson was out on bail when she won the Miss Toronto Tourism title last April 22, six months to the day after she and four others were arrested in connection with their alleged roles in the robbery.
Pageant organizers couldn't be reached by phone, but a spokesperson told the Toronto Star in an email that Wilson's title was removed when they learned of her criminal charges and runner-up Lori-Ann Price took her crown.
A publication ban prevents reporting why Felix stayed the charges or the evidence against any of the accused. Also yesterday, Raniel St. Louis, 20, of Toronto elected to waive his right to a preliminary hearing and proceed directly to a trial. Jamie Barriteau, 20, and Quincy Blackburn, 19, both of Toronto, decided to continue with their preliminary hearing.
According to public information obtained by the Star, the accused were alleged to have worn masks and used imitation firearms to steal purses, money and cell phones from women at the Soft Hands Spa in Mississauga on Oct. 22, 2004. Four days later, Peel police arrested Wilson and four others at a Brampton strip mall at Orenda and Rutherford Rds. Police alleged at the time of their arrests that the group was also planning on robbing the Mystique Massage Parlour.
The three men face a variety of criminal charges, including using an imitation firearm to commit a robbery, conspiracy to commit robbery and wearing a disguise in the commission of an indictable offence.


Massage parlour raid nets 11 arrests
Last updated Nov 18 2004 12:47 PM EST
CBC News
Moncton police have widened their sex trade dragnet to include massage clubs and escort services, arresting 11 people in a Wednesday night sting.

RCMP Cpl. Terry Lee Kennedy says prostitution has become a serious problem in the St. George Street area of Moncton. Business owners and residents are complaining about sex workers walking the street at night and leaving evidence of their work in parking lots and playgrounds. Dozens of men and women have been arrested on prostitution-related charges in the St. George Street neighbourhood during the last several months.

Wednesday night, police raided two massage parlours, arresting 11 people. Nine of the suspects will be charged with being in a bawdy house, and the other two for operating a bawdy house.

Last weekend, five men were arrested in the same neighbourhood for trying to buy sex.

Kennedy says criminal charges are only part of the solution to the city's prostitution problem. "We're working very closely with the residences and businesses in that area, with addiction services," he says. "There's a new group called PEERS that are there to help women and men who are involved in prostitution to help them get control of their lives."

The 11 suspects will be in court on Jan. 17 to face the charges and enter pleas. The massage parlours will remain open for business.

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Police have laid more than 150 vice charges against a string of massage parlours in Brampton and Mississauga following a five-month undercover operation.

Peel Regional Police's Vice Unit launched the investigation into the region's massage parlours in February as a result of complaints from the public.

Officers with "Project Rubdown" discovered widespread occurrences of sex acts being performed for money in the 27 licensed businesses.

"We conducted investigations at every known body rub parlour in the Region of Peel and have established solid evidence of prostitution in each and every one of them," said Detective Don Cousineau.

"What surprised us the most was how forthright the attendants were in readily admitting they performed acts of prostitution as an expected part of the services they provided."

Employees and operators of the so-called "rub parlours" are faced with 151 charges relating to the operation of common bawdy-houses.

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Calgary to review massage licence bylaw
Last updated Nov 7 2003 05:37 PM MST
CBC News
The city is reviewing its licensing bylaws after police raided a number of massage parlours they said were bringing in women from southeast Asia to work in the sex trade.

But the city says the timing of the review is coincidental.

"It was our intention to review all of our bylaws over the next year," Shirley Stunzi, manager of business licensing said. "We have 10 bylaws to administer and massage practitioners, and the massage bylaws, and we were going to review that one as well.

"So it wasn't specifically tied to this specific incident. However, this just brought it up and highlighted it."

Earlier this week, police raided nine massage parlours and charged 16 people with a number of offences, including living off the avails of prostitution and keeping a common bawdy house. Police believe they cracked an underground pipeline that brought women into the country to work in the sex trade.

From Nov. 6, 2003: Police crack down on human smuggling

They then raided three more massage parlours and in total, 21 people have now been charged. Police are still looking for 10 more people and plan to lay up to 20 other charges.

The women working in the massage parlours had been licensed by the city, which had been given false documentation.

Stunzi says there are more than 450 licensed massage businesses in Calgary, and all have background checks done by the police on both owner and practioner. She says the review will look at whether more hours of training should be required to help weed out illegitimate businesses, or if licence fees should be increased.

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Massage parlours rub council the wrong way
Last updated Jun 28 2005 09:33 AM EDT
CBC News

Toronto city councillors are being asked to crack down on illegal massage parlours that masquerade as centres for holistic medicine.

They will debate a motion next month that, if passed, would limit licences for massage operations to businesses that belong to professional associations.

Current estimates suggest that as many as half of the city's holistic clinics are simply fronts for prostitution.

That has incensed legitimate business owners, who say their acupuncture and shiatsu massage clinics are being unfairly perceived as sex shops.

"All of a sudden, I'm being interpreted as being a sex-trade worker as opposed to a health professional," said Timothy Phillips, whose Danforth Avenue business offers acupuncture and Chinese traditional medicine in addition to shiatsu massage.

"The city has been granting licences without examining the credentials of therapists, giving them to anyone who can print up a certificate on their computer."

Councillor Howard Moscoe says the aim of tighter licensing requirements is to make clear who is legitimate and who isn't.

"We're under enormous public pressure to close down the body-rub industry in this city, whether they call themselves aromatherapy, shiatsu or anything else," Moscoe said.

The proposal is expected to be debated at council in July.

If it's approved, the new rules will come into force in October.

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Police nab suspects in massage parlour theft
Last updated May 13 2005 07:13 AM ADT
CBC News
A massage parlour in downtown St. John's has been held up for the second time this week, but Thursday night's robbers did not get away.

Two men wearing bandanas and armed with a knife held up Hush, on Duckworth Street, shortly before 11:20 p.m.

The police say the employees became suspicious when someone began to enter the parlour, but then backed out.

An employee on duty called a friend and left the phone line open.

That friend called the police, who arrived as the robbers were starting to leave the building.

The thieves were able to escape through another exit.

A police dog tracked them down within minutes.

Money and jewelry that had been stolen were recovered.

On Monday night, two men wearing bandanas and armed with a knife held up the Hush massage parlour.

However, police are not saying whether the same individuals are believed to have been involved in both robberies.

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VANCOUVER– The owner of a Vancouver massage parlour faces the rare charge of trafficking women into the country for the purpose of prostitution.

Michael Ng, who owns King City Massage Centre, is charged with bringing two Chinese women into Canada to work at his business as prostitutes.

He is also charged with running a common bawdy house and living off the avails of prostitution.

Victims' groups say the rarity of the trafficking charge indicates the federal government is not doing enough to combat human trafficking.

Deborah Isaacs of MOSAIC – a Vancouver group that assists immigrants and refugees – says prosecutions such as this one are few and far between.

And she says much more needs to be done because life for women being trafficked into Canada is very hard.

"Very isolating. They don't have much contact, they have no freedom," she says. "For those in prostitution, they may have to have an enormous number of clients a day to meet the demand."

Naomi Minwalla, an immigration lawyer who deals with victims of sex-trade trafficking, agrees that no one appears to be paying attention to the problem.

"There seems to be a clear lack of communication between parties who should have an interest in eliminating this problem," she says.

RCMP Supt. Bill Ard is in charge of a 35-member team in B.C. that investigates human trafficking. He admits police don't know the extent of the problem. But Ard says steps are being taken to get a handle on the situation.

"The bottom line is we're still getting going with this and I don't know what the future will hold."

The RCMP is responsible for investigating human trafficking cases under the 2002 Immigration and Refugee Protection Act. So far, there have been no convictions under the legislation.

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Surburbs saved from massage parlours
Last Updated Apr 4, 2000 12:00:00 AM
CBC News
Winnipeggers living outside the downtown don't have to worry about massage parlours and escort services coming to their neighborhoods. At least, not yet. This morning a city committee said it would not consider licencing those businesses outside the central area. Coun. Jenny Gerbasi tried to sell the property and development committe on the idea. And she's not happy with the councillors' reaction. "It's disappointing to me that councillors were not willing to discuss the issue further, that they wanted to kill it, that they wanted it to go away. "I can think of other things I'd rather focus on too, but the people who live in the downtown are entitled to the same rights as other citizens," she says. "They have the right to not have everything concentrated in their neighborhood in one little area." Councillors say there would be a huge outcry if they even asked people living in their wards if they wanted to talk about changing the zoning by-law. Garth Steek says he's already had many calls from angry constituents. The zoning question now goes to city council. Gerbasi will try to get support of her colleagues then.

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July 29th
'Holistic' centre to shut down
City councillor witnessed sex during inspection
Reporter offered sexual services by an attendant

DALE BRAZAO
STAFF REPORTER

After a two-year battle and dozens of complaints from neighbours, the city has managed to close down one of its most notorious rub-and-tug "holistic" centres.

The Ontario Court of Justice has ordered 773A The Queensway, a licensed "holistic" spa, to shut its doors on Monday, and keep them closed for two years.

"If they haven't locked the doors by August 1st, then we go in with a contractor and we board it up and lock it up," Pam Coburn, executive director of municipal licensing and standards, said yesterday. "And if we go back on August 2nd and they've reopened, then we go again."

The city sought the closure order after the owner, Marc Pierre Venot, was convicted in January of operating the licensed holistic centre as an unlicensed body rub parlour.

Kwong Cham Shong, the manager of 773A The Queensway, said she will obey the court order, and plans to leave the country soon after the "spa" shuts down. The body rub parlour is located next to the Kingsway Lambton Home for Seniors, whose residents have long been demanding that the sex den be closed.

"I'm going back to China," said Shong, known to her clients and neighbours as Sophie. "I like Canada. But I don't know what I did wrong. I follow the bylaws. I follow my lease. I don't know what these people have against me."

The spa was featured prominently in a Toronto Star investigative series earlier this year into the "holistic" scene in Toronto. The investigation revealed that as many as 75 per cent of the 330 city licensed holistic centres are nothing more than brothels.

A reporter who went undercover for an aromatic massage at 773A The Queensway was offered sexual services for additional money by an attendant, but refused.

And just last week Councillor Peter Milczyn (Ward 5, Etobicoke- Lakeshore) said he witnessed an attendant having sex with a customer in one of the massage rooms, even as city inspectors were on the premises conducting a routine site inspection.

"I saw a naked man on top of a naked woman on her back and he was having sex," said Milczyn. "He was thrusting."

The practitioner, who fled the massage room with her hands covering her face, later told reporters who had accompanied the inspectors that although she and the client were both naked on the table, she was not having sex.

"I was doing push-ups," said the practitioner, who identified herself to reporters as Julia.

Shong said yesterday that Julia no longer works for her.

"She's a crazy girl. She takes a lot of medication. Everybody knows she's crazy, but she gives a very good massage."

News of the closure order was cheered by some of the seniors, who said they are tired of finding condoms in the parking lot, and sick of seeing patrons of the alleged health spa urinating against the walls of their building.

"I'd like to see a variety store in its place," said Jean McKennae, a resident for 12 years, who requires a wheelchair to get around. "That's something we can all use."

"They'll be happy about this, no doubt about it," said superintendent Otto Curtis. "The main complaint we get from seniors, aside from the usual noise and traffic complaints, is of people using the property as a public washroom."

On Tuesday, city council introduced new measures to crack down on bawdy houses and illegal body rub parlours masquerading as holistic health care providers.

The major change, designed to weed out the sex workers from the legitimate wellness practitioners, requires all holistic operators to become members in good standing of recognized professional organizations.

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Globe and Mail article July 27th

By ROB SHAW

Wednesday, July 27, 2005 Page A10

The city of Toronto has a "sexual dysfunction" when it comes to cracking down on sex parlours masquerading as holistic health centres, and at least one city councillor says council's efforts last night did little to help the problem.

Council voted unanimously to pass a package of bylaw amendments that tackle the "rub and tug" problem by linking business licences to membership in a professional, recognized, holistic health association. The city estimates more than half of Toronto's 315 licensed holistic or traditional medicine establishments are fronts for sexual services.

But a series of last-minute changes in the bylaw amendments left some loopholes open for sex services to continue to plague the city, said Councillor Peter Milczyn, who introduced the original plan.

"What we did today is going to continue to have people frustrated that the city can't enforce the laws, can't enforce its own bylaws, [and] can't collect the money to do it," he said.

Earlier yesterday, Mr. Milczyn had said Toronto suffers from a "sexual dysfunction," and that "for years politicians have been sucking and blowing on this issue, and it's time to come to a conclusion."

Some councillors had wanted businesses to keep their doors and treatment rooms unlocked, so that bylaw officers could better inspect the premises. But council voted against that, citing safety reasons.

Council also voted against health checks for holistic practitioners (presumably for sexually transmitted diseases), against security cameras in the centres and against letters to landlords alerting them that new tenants were holistic health businesses. Council also voted against a task force on the regulation of the sex trade in Toronto.

Finally, a proposal to raise business licensing fees was held back pending a public consultation. The city already spends $2.5-million more in bylaw enforcement than it gains in revenue.

"The issue of the $2.5-million deficit for enforcement is still out there," Mr. Milczyn said.

But at least one holistic healer worried his business would be caught in the crossfire of a city crackdown said he thought council did the right thing. "What I saw was a council who was very sympathetic to our cause," said Timothy Phillips, a shiatsu therapist and owner of Healing on the Danforth. "I think it went well. How things are implemented is up to the city."

As part of the bylaws, body rub parlours and holistic centres also will not be allowed to stay open as late.
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Toronto Sun July 27

By ROB GRANATSTEIN, CITY HALL BUREAU

POLITICIANS HAVE pushed through a new bylaw to crack down on illegal "rub and tug" massage parlours calling themselves holistic centres.

But the bylaw is rubbing some councillors the wrong way.

Councillor Peter Milczyn, whose Etobicoke ward features a stretch on The Queensway with a number of body rub parlours, said this is another example of politicians "sucking and blowing" on this issue. The city is licensing brothels, he said.

PROVIDERS TO BE DRESSED

"They made a weak bylaw weaker," Milczyn said following the vote to approve the new strategy to deal with body rubs.

Under the new rules, holistic medicine practitioners will have to be approved by a professional association to qualify for a city licence. Council also passed rules forcing holistic medicine providers, including shiatsu and aromatherapy professionals, to be dressed.

The bylaw also allows for "manipulation of the buttock muscles."

But council overturned a staff proposal forcing the centres to leave front doors and treatment room doors unlocked while seeing a patient.

Timothy Phillips, who does shiatsu at Healing on the Danforth, called the changes a good start.

"Council is starting to understand we're legitimate businesses," he said.

Phillips said he approved of new rules giving organizations the job of limiting hours of operation to between 8 a.m. and 9 p.m.

Councillor Bill Saundercook called the new rules the start of a new attack on illegal massage parlours.

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Toronto Star, July 27, 2005
Holistic practitioners will have to become members of professional organizations if they want to be licensed in Toronto, but they can now have their doors locked when they are working on their clients.

That's the gist of the new bylaw city councillors came up with yesterday —after five hours of debate and more than two dozen motions — in their latest attempt to tackle the sex shops operating as licensed holistic health centres.

"The city of Toronto has a sexual dysfunction," Councillor Peter Milczyn (Ward 5, Etobicoke-Lakeshore) said in calling for a crackdown on the sex dens, many of which are in residential areas. "For years, politicians have been sucking and blowing on this issue. And it's time to come to a conclusion."

A Toronto Star investigation into the "holistic" scene in Toronto earlier this year revealed that more than 75 per cent of the 330 city-licensed centres are nothing more than brothels. Another 300 operate without any licences at all, city inspectors say.

Milczyn, who has seen more than a dozen "holistic" spas open along The Queensway in his ward in the past few years, lost a motion that would have staff look at including nail salons in the new bylaw.

Councillor Howard Moscoe (Ward 15, Eglinton-Lawrence) thought the idea was too draconian, asking Milczyn if he "had an expectation that some pedicurist is going to suck somebody's toes." The city's current problem stems from an earlier attempt to control the sex trade by capping the number of licensed body-rub parlours at 25, he said.

Policing the holistic centres costs the city about $3.1 million a year in inspection and legal costs, but licensing holistic operations generates just $600,000 for the city.

Licensing staff had urged that fees be increased substantially as a way to recover some of the enforcement costs, but a council committee turned that down and yesterday councillors decided to send the issue back for further debate.

Pam Coburg, head of municipal licensing and standards, said forcing holistic practitioners to become members of a recognized professional organization is an important first step in squeezing out the illegal sex operators.

"The question is whether the professional associations will be able to maintain their internal integrity and weed these people out," she said.

The most contentious debate occurred around a motion by Mayor David Miller to allow holistic practitioners to lock their doors while they are with clients as a safety measure.

Milczyn criticized the proposal, saying it will interfere with inspections and the police's ability to enforce the bylaws.

The new bylaw also failed to win total support among the legitimate holistic practitioners who have been fighting for new regulations to combat the illicit sex trade which many say has soiled their profession.

Timothy Phillips, a registered shiatsu therapist who operates a clinic on Danforth Ave., predicted the new regulations would have little effect on curbing the sex trade. "It doesn't matter what new bylaws they come up with; these people will find a way around them," he said.

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Body rub charges on rise

Jul 23, 2005
Lisa Queen, Staff Writer

An expected crackdown on body rub parlours in Toronto won't drive an influx of the spas north to York Region, a York Regional Police drugs and vice officer predicts.

"We know we've tightened down so much, certain places (parlours) are going to Toronto instead of York because of our aggressive enforcement up here," Det.-Const. Gary McBride said.

"We have one of the most dedicated vice squads in the GTA."

Toronto council is expected to tighten rules and increase fees for holistic spas, which are often fronts for prostitution and other illegal activities, when it meets Tuesday.

But that doesn't mean the parlours will move north, Det-Const. McBride said.

"I don't have any concerns. We're rapidly reducing the number of body rub parlours in York Region." he said, although he was unable to provide numbers.

"We have several folding this week and next week. That's from working with police, municipal bylaw officers and the owners of the industrial units (where tenants operate parlours)."

Although Vaughan was late to come on board, Det.-Const. McBride credited York's municipal bylaw enforcement units for helping to keep a lid on illegal activities at licensed and unlicensed parlours."

Last spring, a police inspector sharply criticized Vaughan's lax attitude.

In a letter to the city, now-retired Insp. Denis Mulholland said "little, if any" enforcement was being conducted by bylaw officers.

"This differs significantly from the aggressive approach two other municipalities have taken, namely Richmond Hill and Markham," he wrote.

"Without the co-operation of the city, we cannot effectively enforce the bylaw and eliminate these illegal establishments from operating within your city. York Regional Police and your bylaw enforcement officers are aware that some of these establishments operate as fronts for open prostitution within your city and require frequent inspections."

The criticism prompted council to dedicate the equivalent of a full-time bylaw officer to police body rub parlours starting in May.

"The City of Vaughan has dedicated people who are working with police, who are doing their own bylaw inspections," said Det.-Const. McBride, who covers Markham.

"They have been out there pounding them. Definitely, they've been out enforcing."

Tony Thompson, senior manager of Vaughan's bylaw department, was unavailable to comment on the results of Vaughan's increased enforcement over the last two months.

In May, he acknowledged the city was laying far fewer charges than its neighbours.

Last year, about 100 bylaw charges were laid in Vaughan compared to 320 in Richmond Hill, he said.

City solicitor Bob Swayze said bylaw officers laid 44 charges against parlour attendants and owners over a three-week period since beefing up enforcement.

Although he couldn't provide numbers for the same period last year, he said substantially more charges have been laid this year.

Councillor Peter Meffe is confident Vaughan's renewed interest in charging body rub parlours will prevent Toronto spas from moving north after that city introduces tougher standards.

However, he also worries they could redefine themselves or go underground by operating out of basements in residential neighbourhoods.

"You have governments trying to eliminate (prostitution) for millenniums going back to Greek and Roman times," he said, adding his main concern is making sure underage people aren't lured or forced into the business.

"It's a cat and mouse game. Just because you bring a cat into your house, the cat gets old or tired and you have the mouse problem back again."

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Clinics offer more than holistic cures
Some health centres are really fronts for prostitution, police believe

By TIM APPLEBY AND JEFF GRAY

Saturday, July 23, 2005 Page A9

Tucked between a furniture store and a beauty salon on one of the seedier stretches of Bloor Street West can be found a self-described "health clinic" -- one of scores to have mushroomed across the downtown over the past six years. In its store window is proffered an impressive array of holistic remedies: aromatherapy, acupressure, shiatsu, reflexology.

Once inside the door, however, a visitor's options appear to shrink. Scantily clad and with a winning smile, a fortyish attendant who identifies herself as Shelly from Shanghai, a Canadian resident for six years, appears puzzled by an inquiry about a shiatsu treatment.

Instead, she suggests a half-hour massage for $35.

Down the hallway in one of the clinic's grubby, dimly lit cubicles, replete with massage bed, lotions and a shower stall, a faded scrap of paper taped to the wall sternly admonishes patrons: "No sex acts of any kind are to be performed on the premises."

So maybe the absentee proprietor, whom Shelly refers to as "the big boss," really does run a holistic health centre rather than a sex den.

But if so, he looks to be in a minority. City hall officials estimate that of the city's 315 licensed holistic or traditional medicine establishments, between half and three-quarters are fronts for prostitution.

Setting up such a business requires no great acumen. Under current rules, anyone holding a certificate showing that he or she has trained in some sort of traditional healing technique can pay a $232 fee and obtain a licence to open a centre.

The most immediate result of this loose regulation is a steady net loss for the city's licensing department. Last year alone, the gap between revenues and bylaw-enforcement costs was close to $2.5-million. Add to that significant difficulties for legitimate holistic practitioners tarnished by the growing presence of the brothel-keepers.

But now, thanks to the city's planning and transportation committee, the landscape seems about to shift. In a package of bylaw amendments that had been scheduled for debate on Thursday before being deferred until next week, some of the key ground rules would change.

Chief of these would be a requirement that to obtain a licence, the applicant would no longer be able to simply flash a "diploma" that may or may not be genuine, as easily created on a desktop computer as any other bogus credential.

Instead, the would-be operators would have to demonstrate membership in professional, recognized organizations. Those organizations, in turn, would have to apply to the city for accreditation, citing documented proof of their codes of ethics and disciplinary procedures.

As things stand, monitoring those groups falls to the federal Department of Human Resources.

"To be quite honest, that hasn't worked out," said Rudi Czekella, a policy research officer with the city's municipal licensing and standards office, who describes the current checks and balances as sieve-like.

Under the new system, the city will largely be able to "filter out the illegals," Mr. Czekella said. "You can never filter out anything 100 per cent. But you should reduce it substantially."

If that happens, the first beneficiary will be the taxpayer.

Steadily growing in number since they began appearing in 1999, Toronto's assorted holistic centres produced roughly $600,000 in licensing revenue last year.

Balanced against that, however, was the price tag for administering and inspecting the centres and prosecuting operators of ones that violate bylaws. In 2004, those total costs exceeded $3-million.

While prostitution per se is not illegal in Canada, a host of prostitution-related activities are.

These include soliciting in a public place; pimping and living off a prostitute's earnings; and operating "a common bawdy house," meaning a brothel.

But the city inspectors who struggle to put a dent in Toronto's booming sex-emporium industry usually rely not on the Criminal Code, which they have little authority to enforce, but on municipal bylaws. Among the more than 260 bylaw charges laid against holistic centres last year, infractions ranged from not having the requisite licence, to failing to provide receipts, to offering "unauthorized services."

Toronto is not alone. Other cities, in Ontario and elsewhere, have issued alternative health-care licences for businesses that have turned out to be prostitution operations.

Legitimate or not, Toronto's holistic clinics are in sharp contrast to the circumstances of its licensed body-rub parlours, whose number is capped at 25, and whose workers must, among other things, provide periodic medical-test results proving they carry no communicable diseases.

But the big difference is in operating costs. A start-up licence for a body-rub parlour -- if available -- costs more than $10,000, the same as for a strip club, and the annual renewal fee is almost as much again.

A year ago, city staff recommended plugging the fiscal shortfall by charging holistic practitioners the same. But amid concern for Toronto's many bona fide holistic businesses, city councillors balked.

So instead, the proposals to be reviewed by council next week include a plan to increase fees for all municipally licensed businesses by $35, in an attempt to offset that $2.5-million shortfall.

In addition the changes would also:

Require that itemized bills be kept for every patient, available to city inspectors on demand.

Prohibit the locking of any room or cubicle within a holistic establishment, allowing inspectors unhindered access.

Toughen penalties if minors are involved.

Stipulate that staff wear "clean, opaque professional clothing."

Heeding requests from legitimate traditional-medicine practitioners, the city would loosen some other regulations.

But with what difference? Some observers liken prostitution to a soft balloon -- step on it in one area and it rises in another. Shut down the phony holistic operators, that argument goes, and they will find another grey area of the law and reappear, say, as nail-salon entrepreneurs.

"At this point, I don't think we know," said Councillor Case Ootes (Toronto-Danforth). "We're just making every effort we can without harming the legitimate practitioners. Those people don't make large incomes."

A long-time Toronto Police officer with extensive street experience was more optimistic, suggesting that the sex trade often reflects ease of opportunity. "Prostitution comes in many forms, street-level prostitution is always going to be there, unless you increase the resources to keep the females off the street," he said.

"But if you're talking about illegitimate businesses, something can be done. At least I like to think it can."

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July 20, 2005
Holistic spa under scrutiny
'There's no sex happening here,' manager promises
City councillors to vote tomorrow on changes to bylaw

ROBERT CRIBB AND DALE BRAZAO
STAFF REPORTERS

Kwong Cham Shong is shaking her head as two city inspectors look around her west-end holistic centre.

"There's no sex happening here," declares the manager of 773A The Queensway, a city-licensed spa located beneath a seniors' home, whose residents have demanded action to close it down.

"I promise I don't let sex happen here."

Even as she speaks the words to a city inspector, a councillor and two reporters, sex is happening a few metres away inside one of the spa's massage rooms.

This isn't the first time the holistic centre has faced problems with inspectors.

It also featured in a recent Toronto Star investigation that found as many as three-quarters of the city's 300 licensed holistic centres operate as sex dens. It's a problem that costs taxpayers $2.5 million a year in inspection and legal action costs.

Tomorrow city council is scheduled to vote on a plan for higher fees and tighter rules around holistic centre licensing, although the illicit sex industry may already be moving on to a new cover — as nail salons.

But on Monday night, when an inspector and the local councillor invited two reporters along on visits to four holistic centres, 773A The Queensway is busted.

Shong, who goes by the name Sophie with customers, is in the middle of denying any illicit activity in her holistic centre when she sees a reporter looking through the peephole of a closed massage room door where a practitioner is treating a male client. Sophie rushes over, pushes him aside and peeks through.

What she sees prompts her to fling open the door, rush in, slam the door and shut off the lights inside.

In the brief moment the door was open, it was clear what was happening inside.

"I saw a naked man on top of a naked woman on her back and he was having sex," said Peter Milczyn (Ward 5, Etobicoke-Lakeshore), who was present for the inspection Monday evening. "He was thrusting."

Moments later, the client walked out of the massage room fully dressed. He accepted $60 in cash from Sophie as reimbursement for his unfinished holistic treatment.

"I was just having a massage, for heaven's sake," he said.

The practitioner, who fled the room with her hand covering her face, could not produce a holistic practitioner's licence for inspectors, as is required by city bylaws.

`My personal attitude is we should be licensing brothels in a few select industrial areas with proper health monitoring'

Councillor Peter Milczyn

In an interview, she denied she was having sex with her client.

"I was doing push-ups," said the 26-year-old, who identified herself as Julia. "I'm a stripper. I like to take my clothes off. I'm sorry if that offends people. I've always been an exhibitionist."

The holistic centre already has six bylaw charges pending against it and one prior conviction, according to city licensing inspector John Romano, who conducted the inspection.

City councillors are to vote tomorrow on changes to bylaws governing holistic centres, which are licensed to offer alternative health treatments such as shiatsu, reflexology and aromatherapy. Inspectors can lay charges against owners or employees based on municipal bylaw offences, ranging from missing licences to infractions such as failing to wear proper clothing or offering "unauthorized services."

If adopted by council, new rules will require holistic practitioners to be accredited by professional associations, while hiking fees to cover more of the cost of enforcement. Last year the city spent $3.1 million licensing, inspecting and prosecuting holistic centres for flouting bylaws. Fees charged to owners and practitioners brought in only $600,000.

But the illicit sex industry already appears to be one step ahead, morphing into nail salons that offer massage services on the side. In Toronto, nail salons do not require city licences.

Milczyn wants to see the city legalize prostitution and restrict places like 773A The Queensway to industrial areas, away from homes and other businesses.

"My personal attitude is we should be licensing brothels in a few select industrial areas with proper health monitoring — make sure it's safe and