Towson prostitution arrest leads government to try to seize assets

Alleged operator has MBA, ties to public company

  • Di Zhang is pictured in a mug shot.
Di Zhang is pictured in a mug shot. (Courtesy Baltimore County…)
September 28, 2013|By Jean Marbella, The Baltimore Sun

Even before local and federal agents raided Jade Heart Health in Towson in March and charged its operators with prostitution and human trafficking, what went on at the massage parlor at 1404 E. Joppa Road was hardly a secret.

Men arrived day and night at the small house, customers posted graphic reviews on adult websites, and the owner, Di Zhang, had been arrested multiple times over the past 10 years on charges of running what police said were houses of prostitution.

But court and financial documents reveal what might be the real surprise: Zhang may be as much mogul as alleged madam.

Zhang, 42, has an MBA from the University of Baltimore — as well as a real estate portfolio that includes properties in Oakenshawe and Charles Village, and part-ownership of a publicly traded company that reports doing millions of dollars of business in China.

It is an unexpected profile for someone accused of running an illicit massage parlor, where in small, furtive operations customers often pay less than $100 plus tips for sex in addition to the advertised rubdowns. But, say anti-trafficking advocates, this can be a highly profitable crime and one that can be fought by going after the perpetrators' assets.

"Unlike other items people traffic — guns, drugs — human beings are reusable," said Morgan Weibel, an attorney who works in the Baltimore office of the Tahirih Justice Center, which supports immigrant women who have been trafficked or abused. "Humans can be sold over and over again."

Zhang and Yi Dian Dong, 64, who police say is her boyfriend and father of her child, are awaiting trial on prostitution and human trafficking charges related to the March raid and, in Zhang's case, additional prostitution charges stemming from incidents in May.

"It's not true," Zhang said in a brief interview outside her Towson home. "Everyone thinks I'm a bad person. It's not right."

Dong could not be reached for comment, and no lawyer is listed for him in court records.

Meanwhile, federal authorities have launched a civil-forfeiture case to seize five buildings with a total assessed value of nearly $2 million in which Zhang has an ownership stake. Prosecutors allege that the properties — paid for largely in cash — were purchased with the proceeds from prostitution.

But Zhang's business interests appear to extend beyond the massage parlor and her real estate holdings — and beyond the Baltimore area.

Zhang and Dong are listed as the secretary and CEO of Landmark Energy Enterprise, which uses the same Joppa Road address and phone number as the massage parlor. According to annual reports filed with the Securities and Exchange Commission, the company agreed in 2010 to pay $2.78 million for the patents and assets of a company in China.

Landmark pays Zhang and Dong $8,000 a month each in salary, according to documents filed with the SEC, as well as $2,500 a month in rent for office space at 1404 E. Joppa, which is owned by DZD, a company incorporated by Zhang, Dong and a third person.

It is unclear whether authorities have looked into Landmark as part of their investigation of Zhang and Dong. Rod J. Rosenstein, U.S. attorney for Maryland, declined to comment on whether his office considered the company as part of its forfeiture case against Zhang's real estate assets.

The U.S. attorney's office has been meeting with lawyers representing the owners of the real estate, Zhang and her mother, Xuezhu Zang, "to discuss settlement terms," according to the court documents. Zang did not respond to requests for comment.

The prostitution and human-trafficking charges were transferred from District Court to Circuit Court this summer because "it's a case that's going to require more time and investment," said Assistant State's Attorney John Cox. He declined to discuss the case further.

Student, businesswoman

Zhang has lived in Maryland for more than a dozen years and received her Master of Business Administration degree at the University of Baltimore in 2001, a spokesman there confirmed.

Zhang's biography in Landmark's SEC filings says she earned a bachelor's degree in accounting from Beijing Normal University in China in 1994. She listed two jobs in China, including a stint as an accountant.

On April 1, 2003, she married Michael McGowan at the Baltimore County courthouse, according to a complaint for divorce that she filed five years later. In January 2006 the couple decided to live separately for the purpose of ending their marriage, the complaint said. The divorce was granted in December 2008.

Reached by telephone in Los Angeles where he now lives, McGowan, 35, said he was shocked to learn that Zhang had been arrested on prostitution charges. McGowan said he had no idea Zhang was in the massage parlor business; during the years they were married, he said, she worked with man who had a store selling Chinese imports.

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