How vice cops linked Southlake’s popular Dragon House to a Dallas massage parlor and beyond

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The brothel on Market Center Boulevard called Jade Spa remains shuttered a week after the police raid; so, too, the Chinese restaurant in Southlake called Dragon House. Because, as you likely know by now, police and prosecutors say the owners and operators of the Design District bordello also own and operate the suburban dumpling house.

For the moment, both closings are only temporary. City attorneys will ask a judge next week to keep the massage parlor padlocked indefinitely. And on the restaurant’s website, it says, without further explanation, “We will be closing temporarily. Sorry for the inconvenience.”

How Dallas cops tied one to the other has remained so far a story shared only in broad strokes — a few sentences in a media release, a press conference, newspaper and TV stories. The far more complicated tale is outlined in search warrant affidavits obtained by The Dallas Morning News, some running more than 100 pages, each detailing the searching of property records and the discovery of numerous bank accounts shared between the two operations.

Sometimes, too, money was driven directly from the massage parlor to the restaurant, records show.

Those affidavits provide the reasons for last week’s pre-dawn raid on an illegal massage parlor on a heavily trafficked street, next to popular businesses and high-end hotels. There, seven young women were found sleeping on tattered slivers of insulation, and undercover officers wearing knit masks discovered in kitchen cabinets giant baggies filled with pink condoms.

Dallas PD’s Vice Unit did not anticipate a far-reaching conspiracy when commanders initially decided to shut down Jade Spa. They didn’t know what they found on Market Center would lead to the suburbs or to other countries. Cops thought at first this would be like the dozen or so recent raids of massage parlors along and near Walnut Hill and Royal lanes near Harry Hines Boulevard — where, for as long as anyone can recall, sex has been sold in the open like any other product.

In most of those cases, the massage parlors were being run out of rented spaces whose property owners would plead ignorance to what was happening behind blacked-out windows and doors guarded by surveillance cameras. Managers would be arrested, charged with promoting prostitution. And workers, before they were given their belongings and cut loose, were offered shelter from nonprofits that accompany vice officers on these raids.

All of that happened at Jade Spa last week. But for the first time, officers were dispatched across North Texas as well, to homes and apartments belonging to people tied to the restaurant and brothel.

“What makes this significant is that this was not just a single establishment run by an individual or a couple of people in one location,” said Maj. Max Geron, who oversees DPD’s Criminal Investigations Bureau. “The financial records tie it to other places, which just happen to include a very popular higher-end restaurant. It was that level of involvement, that level of complexity, that we have not yet fully explored.”

Geron said this week Jade Spa was far more “sophisticated” than other massage parlors encountered in recent months. The affidavits show its tentacles stretched from the Design District to Southlake to Canada to Shanghai.

In the week since vice cops executed warrants at both locations — and at homes scattered across North Texas, from Arlington to Carrollton to Irving — the six men and women charged with promoting prostitution and engaging in organized crime have bonded out of Dallas County jail. Three people remain at large.

She’s in a detention center in Alvarado. When asked why, ICE officials said in a statement that she returned to Canada 19 years ago, on orders from a federal immigration judge, then “illegally re-entered the United States” at some point.

Carl Rusnok, an ICE spokesman, said that in Dec. 2000, Murphy was convicted of prostitution in Dallas County, and sent back to Canada five years later. She would return in 2014, this time legally, after she was granted parole by U.S. Citizenship and Immigration Services.

She remains in ICE custody, Rusnok said, “pending disposition of her immigration appeal.”

County records show that on Oct. 31, she requested that the Canadian consulate not be informed of her arrest. Murphy’s court-appointed attorney, Dallas’ Lalon Peale, has not returned several calls and texts left this week. Court records do not show whether the other defendants yet have attorneys.

The affidavits show that vice began receiving complaints about Jade Spa in late February, shortly after DPD reconstituted the unit following a yearlong hiatus. Investigators always knew what it was — a brothel masquerading as a spa. It wasn’t hard to tell: The affidavits say investigators found more than 2,200 ads posted on various sex-related websites that “mostly consist of Asian females wearing very little clothing.”

Investigators then turned to the Dallas Central Appraisal District and found that a woman named Chung Shendelman — one of those arrested last week — bought the property on Market Center in September 2004. That, too, is when she filed for and received a certificate of occupancy from the city for Hawaii Spa, its original moniker. The application said the business would be for “Personal Service use.” Two months later, Jade Spa also got a CO from the city at the same address.

Last week, after the raid, the city finally rescinded those certificates of occupancy.

From June to October of this year, vice started sending undercover officers into Jade Spa. The affidavits say that each encounter was more or less the same: A woman would begin a massage, then undress and try to have sex with the officer, who would stop the session, gather his belongings and head for the exit.

At the same time, investigators went digging into bank records. And documents show that in 2011, a 64-year-old Arlington man named Unlu Gurpinar opened a checking account for Jade Spa. He said he was the owner, but listed Yong Murphy as an authorized signer on the account. In time, other suspects were added to the account.

The affidavits offer numerous instances of checks from Jade Spa landing in accounts for Dragon House and vice versa — many of them totaling five and six figures. They show that in August 2017 Murphy pocketed almost $400,000 when she sold her Fortune House restaurant in Irving. Investigators say she spread those proceeds to several bank accounts tied to Dragon House and Jade Spa.

So far, vice has seized or frozen around $370,000 tied to both establishments.

Last week’s raid is hardly the end of the tale: The investigation remains ongoing after they turned up a trove of documents and an enormous stash of cash during the operation. Geron said it’s likely more charges, among them money laundering and human trafficking, could be filed in coming weeks.

Because, you see, the documents say hundreds of thousands of dollars were wired to and from Dallas, Shanghai and banks scattered across Canada. They also show how money from the various accounts was used to pay for, among other things, apartments in Irving and items from Sam’s Club and H Mart needed to stock the massage parlor and restaurant.

Murphy was also “seen on multiple occasions at the Dallas Jade Spa location dropping off supplies and passengers,” says one affidavit. “Murphy’s vehicle has been seen leaving Dallas Jade Spa and going directly to the Dragon House restaurant.”

Others, too, made the same round trips — including a woman arrested in 2013 for working as a prostitute at Jade Spa. According to one affidavit, this suspect — who has not yet been arrested — was seen in July at Jade Spa collecting a white envelope filled with money from a manager. A month later, the same woman was seen driving Murphy to Jade Spa.

Cops later saw the same woman’s car parked at Dragon House. When they went inside, the affidavit says, they saw her there.

“Working as a hostess seating patrons.”