The couple accused of running a sex trafficking operation out of their three Twin Ports massage parlors will not face a prison sentence after admitting to their crimes Tuesday as part of a plea agreement.

Shuangyan Yang, 49, pleaded guilty in State District Court in Duluth to one felony count of racketeering, while her husband, Matthew Shykes, 59, pleaded guilty to one felony count of failing to pay taxes.

Yang and Shykes each faced an additional felony count of engaging in the sex trafficking of an individual. Under the terms of the plea agreement, those counts were dismissed.

The pair owned Shuangyan’s Spa, 2521 Miller Trunk Highway, and Better Massage, 2304 Mountain Shadow Drive in Duluth, as well as Superior Soothing Massage, 1225 Tower Ave., Superior.

They were charged in March after an 18-month investigation by the Duluth Police Department’s sex crimes unit and other agencies.

The charges also allege that Yang and Shykes recruited women from California through an agency or through friends to provide sexual services to clients at the massage parlors.

A search warrant was executed March 21 and resulted in five arrests, police said, but three people were released after being determined to be “employee victims.”

On Tuesday afternoon, Yang sobbed in court before Judge David Johnson while admitting through a Mandarin-language interpreter that she knew employees at the couple’s three massage parlors were providing sexual services to patrons in exchange for money.

As defense attorney Craig Cascarano asked Yang to confirm what occurred, she simply turned to her interpreter and repeatedly said “yes.”

Yang also admitted that she and Shykes took money from their employees, some of whom were living at the couple’s Hermantown townhouse, in exchange for allowing the employees to use the massage parlor for sexual service. The couple either deposited the money into their own bank account or kept the cash.

During a search of the couple’s home in March, police recovered about $25,000 in U.S. currency, as well as Chinese currency.

For his part, as he stood with defense attorney Christopher Stocke, Shykes told Assistant St. Louis County Attorney Vicki Wanta that he failed to pay taxes on about $12,000 in income and failed to file his tax return on time because of the couple’s arrests.

“Did you purposely not pay taxes on that income?” Wanta asked.

“Yes,” Shykes responded.

Under her plea agreement, Yang, who has been in custody since March, faces a 36-month stayed sentence with credit for time served. She is due back in court Dec. 20 for sentencing, at which time she will be released to U.S. immigration officials.

Cascarano told Johnson that despite the agreement, Yang was fearful of being sent to prison, and he asked the judge to reaffirm that Yang would not face jail time. However, he told Yang through her interpreter that he had no control over immigration authorities.

Shykes, who has been free on bond since the spring, will face probation instead of a prison term under the terms of his plea agreement. As part of the agreement, Stocke told the judge, Douglas County and federal prosecutors will not pursue the case further.

Shykes is due back in court Jan. 10 for sentencing.

18-month investigation

According to the criminal complaint in the case, police first learned of advertisements in late 2017 for Better Massage on backpage.com.

Investigators also found reviews for Better Massage and Shuangyan’s Spa on another website, which is not named but is described as being used to alert users about “extra” services involving prostitution and other sexual contact, the complaint states.

Based on the review information, officers with the Lake Superior Drug and Violent Crimes Task Force performed an undercover operation at Shuangyan’s Spa. Yang offered sexual contact to an undercover officer during a massage.

When the officer refused and ended the massage, Yang asked him, “Are you the police?”

In early 2018, police received an anonymous tip from a man who said the masseuse at one of Yang’s and Shykes’ parlors had aggressively tried to provide sexual acts, telling the man that “she would get in trouble if she didn’t,” the complaint states. The caller also told police that one of the employees appeared to be underage.

In January, police once again found reviews for the massage parlors, which referenced sexual services and provided a “code” needed to receive them. An undercover officer again was able to “trigger the masseuse to begin engaging in prostitution service” before ending the encounter, the complaint states.

Investigators then began conducting surveillance of the three massage parlors, where they noticed that the only people entering the businesses were middle-aged men, and the only women were Asian employees. Officers also stopped several customers after they left the parlors, and most admitted to having received sexual acts for money.

Investigators also tracked the defendants’ vehicles, which revealed that female employees were driven between the parlors and Yang’s and Shykes’ townhome. Multiple trafficking victims stayed in the same bedroom, sharing mattresses on the floor, the complaint states. The women had no driver’s licenses or access to a vehicle.

Several of the trafficking victims told investigators that they came to Minnesota from California to “live with the boss (Shykes)” and that they were charged $10 a day to stay at Yang’s and Shykes’ house, the complaint states. The daily fees were deducted from their wages at the massage parlors, where they worked as long as 12 hours a day, six or seven days a week, the victims told police. The defendants provided rice for food, the victims said.

After the couple’s arrests, Shykes told police that he took over the businesses’ finances in 2017. He said employees were moved between the parlors depending on demand and that they were paid in cash.

Review of the couple’s financial documents indicated that both Yang and Shykes were involved in running and managing all three businesses and that both shared in the proceeds from the prostitution services at the parlors, according to the complaint.