The Chinese Are Coming -- Part X, Triads(?), Expensive Sex, Prostitution
No, this is not just another tawdry grab for readers by using a titillating title. This post really is about triads, expensive sex, and prostitution. I often write (hence the part X in the title) of Chinese businesses coming to the United States and Europe, but until a few hours ago, I had no plans to write such a post today, and on prostitution no less.
I was in Federal Court this morning to see Nadja Vietz of my firm get sworn in as a U.S. attorney before Federal District Court Judge John Coughenour. Nadja was already licensed to practice in both Germany and in Spain and she had passed the Washington bar exam and this ceremony would be her final step to becoming an American lawyer.
I got to Nadja's swearing in ceremony plenty early (it is not a good idea to keep judges waiting) and that meant I would need to sit through some federal criminal court sentencings. The first guy up was Chinese and he spoke to the Court through a translator. I was spellbound because I quickly realized he was talking to the US judge probably much like convicted criminals facing sentencing in China talk to Chinese judges.
This guy had managed a brothel and had been convicted of one or more crimes related to prostitution. He began by saying he thought the U.S. legal system is fair in that it punishes the bad guys and lets the good guys go. He then talked about his remorse and shame for what he had done and how he would work to make himself better. He got a 364 day sentence, just short enough (I think) to avoid automatic deportation when he gets out of prison.
The next guy up was also Chinese. He had owned the brothel and apparently had been bringing Chinese women to Seattle for some time. He too thanked the Court for its fairness, but instead of talking about becoming better, he talked about his own poor health and his desire to return to China to care for his 81 year old mother in China. He received 30 months.
During the sentencing hearings, it came out that on the day of the arrest, the police (or FBI?) had found $10,000 in cash on the brothel premises and the federal prosecutor implied this was one day's take. Imagine the profits to be made by bringing Chinese women to the United States, paying them just a bit over Chinese prostitute wage rates and charging them out at American rates. Even including airfare, food and housing, the profits are mind-boggling. Having to go to the federal penitentiary for 2.5 years is, of course, a major flaw in this model, but my appearance in Court today unexpectedly and convincingly brought home in a more interesting way than usual the financial benefits possible from arbitraging Chinese labor.
Comments (11)
Read through and enter the discussion by using the form at the endJoseph Wang - January 19, 2007 3:18 PM
There's actually a connection to Chinese law and cultural practices here. A lot of Chinese criminal law involves finding moral fault, and invoking "medical reasons" is often a face saving method of having a no-fault plea.
If the government drops the charges, then it implies the government is at fault. If the defendant doesn't confess and express remorse, then the judicial process is not considered complete. In cases where the government doesn't want to drop the charges, but the defendant refuses to express remorse, what often happens is that the government convicts the defendant, imposes a heavy sentence, and then uses medical excuses to lessen the charges.
David Li - January 19, 2007 6:37 PM
Before we jump on the profitability of such trade, there is a great chapter in "Freakonomics" by Steven D. Levitt called "Why do drug dealers still live with their moms?" And the scene from "Tequila Sunrise" with Mel Gibson as a drug kingpin shutting at the TV news about insane profit by the drug burst.
I had a interesting dinner with a couple friends in Fuzhou a while ago and one of the friend's friend happen to be in the business. He was complaining how difficult the business has become because of the increasingly picky customers and competition of various methods. With the booming of Chinese coastal cities, fewer people want to take the journey crossing pacific to live in a foreign land.
Here are what I was told, the cargo method is out, at least for the affluent people from costal regions. The method is certainly not for the young ladies. The price has become very cheap to go to US by cargo. The recent burst in Los Angeles has one man claiming paying USD$3000 is pretty much inline with what I heard. The US authority still try to claim they are $30,000 to $60,000 a head.
32 Chinese stowaways found in LA container
http://www.chinadaily.com.cn/english/doc/2005-01/18/content_410007.htm
The popular method for the young ladies is fake marriage. The sneakheads will seek out available men in US. They used to have old Chinese men with US citizenship but young poor black from inner cities becoming increasingly popular. The men are brought to China to stay for at least 3 to 6 months so there is enough time to "falling in love" for US immigration check. With the staying in China all paid for, the man gets about USD$20,000 with half paid up front and the rest in installments over a year or so after he returned to US with the new bride.
The cost to the lady is about $35,000. Half of them paid up front and the rest paid in installment after she gets to the US. Working in the brothel is one of the voluntary options to quickly pay off the debt or quick way to make money in the foreign lands. There are also cases of the couple hiring lawyers to get her out of the contract leaving sneakhead holding the bag.
People in costal cities don't do this out of poverty but vanity. Economist has an article titled "Villa Envy" about people in Fuqing.
Villa Envy
http://www.economist.com/world/asia/displayStory.cfm?story_id=2677840
Oh, by the way, the guy goes to prison for 2.5 years is hardly the guy responsible. He is more likely a scapegoat with pay out to his family in China.
Closely looking at the whole ecosystem of the trade, the profit for each isn't likely to be that huge. There are a lot of people involved to make this happen and as with all Chinese business, they are subjected to intensive price competition. Ending up the one making out the best is the one holding the scarce resources, namely the American citizenship.
Joseph Wang - January 19, 2007 10:23 PM
In talking about transport to the United States, one must make sure that one isn't comparing apples and oranges.
From a friend of a friend who knows some Fujianese, the $30000 to $60000 that authorities claim that the snakehead charges is accurate, but that involves a transaction in which a male is sent to the United States to work as a waiter. Typically, a person will spend three years in the United States working as a waiter in Chinatown, the first two years pays off the debt, the third year is their money to keep. The $30000 is easy to raise as the family pools money to send someone to the United States to work as a waiter, and the profits are then distributed among the investors.
nanheyangrouchuan - January 19, 2007 11:25 PM
Paying Americans to marry desperate asian girls is not restricted to chinese. I know a naturalized vietnamese guy who gets offered 5 figures from Taiwanese and Koreans to be a "husband" for each girl. Often it involves him getting fake canadian residency papers so she can get a visa, and since he has legit american citizenship, getting her into the US is no big deal.
The drawback for him is since he is naturalized, he can have his citizenship taken away, so he refuses, but not all naturalized men do.
Coming to the US from China is not decreasing in popularity, just hang out at the US consulate in Guangzhou and hear the stories. Of course, UK, EU, Canada, Oz, and NZ offer cheaper and sometimes easier alternatives to the US.
China Law Blog - January 21, 2007 1:30 PM
Mr. Wang (i) --
Thanks for checking in. Based on my own knowledge of China criminal cases, I strongly suspected what you are saying, but my knowledge is so limited, I did not want to say anything on this and be proven wrong. The whole thing sounded amazingly Chinese to me and I wondered whether the judge realized it. I think he did because I know he is quite international. He has had a long term interest in the Russian legal system.
China Law Blog - January 21, 2007 1:36 PM
Mr. Li --
I love it. As one often does when looking at someone else's business (for example, I think people completely fail to realize how much lawyers have to spend on nice pens), I completely failed to account for a key cost: getting the women to the States. In my head, I simply figured $1,000 for the airfare, ignoring that it is just about impossible to get an 18-25 year old single Chinese women into the US unless she already has plenty of money in China and can prove it.
Very good point.
China Law Blog - January 21, 2007 1:41 PM
Mr. Wang (ii) -
Those numbers seem to make sense.
China Law Blog - January 21, 2007 1:42 PM
nanheyangrouchuan --
Is it that easy to get fake Canadian residency papers?
nanheyangrouchuan - January 21, 2007 8:24 PM
CLB@
I know that there is a "real estate" visa for foreigners who buy property in Canada, as to ease of getting a fake resident permit, I only know what I hear.
China Law Blog - January 21, 2007 9:11 PM
nanheyangrouchuan --
Interesting.
Clyde Smith - January 24, 2007 8:48 PM
I think if you'd add some lurid photographs to these posts you'd really have something here!
On a more serious note, a resource some might find of interest:
Wages of Crime: Black Markets, Illegal Finance and the Underworld Economy
R.T. Naylor, an economics prof at McGill University at the time this was published, breaks down a variety of examples of inaccurate revenue and valuation claims by various governments related to criminal activity. Among other topics.