A police raid of a "massage" business on Ward Avenue has led to a major felony prosecution featuring the rare use of warrants to arrest witnesses and a glimpse into what authorities suspect is a front for prostitution activities.

The Aug. 23 raid by police and immigration agents resulted in the arrest of three women at the business commonly referred to as "350 Relaxation" in Suite 115 in the back of the two-story building at 350 Ward Ave.

But as investigators developed the case, they arrested nine women in early September who authorities say admitted to working as prostitutes and held them as "material" witnesses at the federal detention center to get their cooperation in the prosecution.

The warrants were dropped several days later against two of the women, and six others were released on condition they reside at the YWCA Fernhurst Women's Residence at government expense to ensure they were available as prosecution witnesses. The ninth was released to a Buddhist church, but later joined the others at the YWCA.

Last week, a federal grand jury indicted Wan Yo Kang, also known as "Hannah," identified as the owner, on 11 felony charges of interstate promotion of prostitution, enticing women to travel here for prostitution activity and harboring two women, illegal aliens, at the business' suite.

The prosecution against Kang is considered rare because of the difficulty of proving an owner had direct knowledge of the criminal activity.

Assistant U.S. Attorney Marshall Silverberg declined to comment on the case, but recently unsealed court documents and previous court hearings indicate Kang's indictment is at least partly based on the assistance of the women arrested on the warrants. The indictment accuses Kang of enticing the women to travel interstate to engage in prostitution and harboring two of them.

Federal law authorizes prosecutors to obtain the "material witness" warrants that must be approved by a judge if the person can provide testimony "material" to a criminal proceeding. The witness can be detained or released on conditions that would ensure he or she will be available to testify or be questioned under oath at a deposition.

Use of the warrants on the Mainland, in connection with terrorism cases, has been controversial. Civil-rights groups have raised concerns that it has been used to detain people when there's not enough evidence to charge them with crimes.

In Hawai'i, the warrants have been used in cases involving witnesses who are not U.S. citizens. Most notably, it was used in the case involving a cook accused of murdering the captain and the first mate aboard a Taiwanese fishing boat on the high seas in 2002. The ship was brought to Hawai'i and warrants were issued to ensure the crew members remained here and were available to provide testimony for the prosecution.

Federal Public Defender Peter Wolff, whose office is not involved in the Kang case, said he doesn't think the use of the warrants here raises the same issues as controversial ones on the Mainland. "I think in this case, it is valid," he said.

In requesting warrants for the nine women in Wang's case, the prosecution said they were either foreign citizens (Korean nationals) or here illegally and might flee if not arrested.

On Sept. 7, about five days after their arrest, the nine appeared before a federal magistrate in their blue prison attire and accompanied by Korean language interpreters for one of several hearings on their status in the case. Because they were indigent, the court appointed lawyers to represent them.

Silverberg dropped the warrants against two women at that initial hearing. Six others were released from the federal detention center on condition that they stay at the YWCA Fernhurst. The amount the federal pretrial services pay for the women is considered confidential, but the YWCA Fernhurst rate for women who can't afford to pay is $28 a day, which includes two meals.

The warrants were later dropped against three others, leaving four still ordered to reside at the YWCA. The other five were released, but faced immigration deportation proceedings.

Kang's business is one of an estimated 40 to 50 "relaxation parlors" — offshoots of massage parlors in the early 1990s — according to Honolulu Police Lt. Walter Ozeki. They are generally located between University and Ward avenues, he said.

Ozeki said they are not regulated and are different from legitimate massage therapy operations, which are part of a licensed industry and subject to state regulations. "Our experience has shown that relaxation parlors are frequently involved in prostitution," he said.

The amount of business for the parlors is difficult to determine, Ozeki said. "But I would imagine it's considerable," he said.

As a result of raids, police generally make arrests on prostitution charges, which are petty misdemeanors, he said.

The hearings produced one surprise for the prosecution when at least one of the woman protested the dismissal of the warrant, which would have meant the end of government funding for her stay at the YWCA.

Silverberg said he thought the woman would be pleased to have the warrant dropped, but her lawyer, Louis Ching, said the dismissal and release from the YWCA would place his client in a "bad position" without money or a place to stay. "I don't want her to be homeless at this point," he said.

Ching later said his client also wanted to remain in the country.

Silverberg later met with the woman and Ching, but an agreement could not be worked out and the warrant was dropped.

Honolulu lawyer Pamela Tamashiro represented one of the other women who was released. Tamashiro said a $35 membership fee had to be paid on behalf of the women to stay at the YWCA.

"They're YWCA members for a year," Tamashiro said.

Her client had planned to voluntarily go back to South Korea, she said.

Federal prosecutors plan to question the four remaining witnesses under oath this month to preserve their testimony for trial and pave the way for the dismissal of the warrants.

Reach Ken Kobayashi at kkobayashi@honoluluadvertiser.com.