Defendant in High-End Brothel Network Sentenced to Over Two Years in Prison

BOSTON – A Torrance, Calif. man was sentenced yesterday in federal court in Boston for his involvement in operating sophisticated high-end brothels in the greater Boston area and eastern Virginia. Defendant was also sentenced for his involvement in fraudulently obtaining over $580,000 in COVID-19 relief funds.

James Lee, 70, was sentenced by U.S. District Court Judge Julia E. Kobick to 27 months in prison, to be followed by three years of supervised release. The Court also ordered restitution in the amount of $569,123 in connection with the fraudulently obtained COVID-19 funds and a money judgment of $63,000 related to the proceeds earned by the defendant as a result of the prostitution conspiracy. In February 2025, James Lee pleaded guilty to one count of conspiracy to persuade, induce, entice and coerce one or more individuals to travel in interstate or foreign commerce to engage in prostitution; one count of money laundering conspiracy; and one count of wire fraud. James Lee was arrested and charged in November 2023 with co-defendants Han Lee, 42, of Cambridge, Mass. and Junmyung Lee, 31, of Dedham, Mass. The defendants were subsequently indicted by a federal grand jury in February 2024.

From at least January 2022 through November 2023, James Lee knowingly conspired with Han Lee and Junmyung Lee to operate an interstate prostitution network with multiple brothels in greater Boston and eastern Virginia. James Lee and his co-conspirators knowingly conspired with one another, and others, to launder the proceeds of the prostitution network by concealing that the money was derived from the prostitution conspiracy.

James Lee rented several high-end apartments in Boston and Eastern Virginia that were used as brothel locations and was the sole and legal tenant of at least six locations. In addition to using his own name to lease the apartments, James Lee would use fraudulent identities and, at times, stolen identities. James Lee was regularly compensated by his co-conspirators for both leasing apartments and for his travel to and from the brothel locations. Han Lee paid James Lee approximately $1,000 per month per active lease as a commission. He also served as a liaison between the females working in the units and the property managers by fielding calls and coordinating any issues that arose relating to maintenance and inspections.

James Lee and his co-conspirators concealed the proceeds of the prostitution network by depositing hundreds of thousands of dollars of cash proceeds into their personal bank accounts and peer-to-peer transfers. Additionally, the defendants regularly used hundreds of thousands of dollars of the cash proceeds from the prostitution business to purchase money orders (in values under an amount that would trigger reporting and identification requirements) to conceal the source of the funds. These money orders were then used to pay for rent and utilities at the brothel locations.

Beginning in around March 2020 and continuing through at least September 2021, James Lee submitted fraudulent information in an effort to obtain loans through the CARES Act and the Small Business Administration’s programs like the Economic Injury Disaster Loan (“EIDL”) program and the Paycheck Protection Program (PPP). James Lee used personal identifying information of a third-party to submit false loan applications and open bank accounts used to accept COVID-19 relief funds. In addition, James Lee fraudulently applied for PPP Loans and EIDL funds using the names of businesses that did not exist or served as shell companies in furtherance of the scheme. In support of the loan applications, James Lee submitted fraudulent tax documents in the name of the third party and a fraudulent lease between himself and his fraudulent identity. As a result of the scheme, James Lee fraudulently obtained at least $580,000 in EIDL funds and PPP loans.

In March 2025, Han Lee was sentenced to four years in prison to be followed by one year of supervised release. Han Lee was also ordered pay forfeiture in the amount of $5,418,572 and restitution in an amount to be determined at a later date. In April 2025, Junmyung Lee, 32, was sentenced to one year in prison, to be followed by one year of supervised release. The Court also ordered a forfeiture money judgment in the amount of $200,000, equal to the amount of proceeds earned by the defendant during the conspiracy.

Members of the public who have questions, concerns or information regarding this case should contact USAMA.VictimAssistance@usdoj.gov.

United States Attorney Leah B. Foley; Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England; and Cambridge Police Commissioner Christine Elow made the announcement today. Valuable assistance was provided by the Central District of California; Eastern District of Virginia; U.S. Postal Service; and Watertown Police Department. Assistant U.S. Attorney Lindsey E. Weinstein of the Criminal Division and Assistant U.S. Attorney Raquelle Kaye, of the Asset Recovery Unit prosecuted the case.