East Lyme — State and East Lyme police on Tuesday made two arrests in connection with an alleged prostitution ring that was being operated out of the Rainforest Spa, a massage parlor located at 301 Flanders Road.

Owner Jia Shia Cao, 63, of 299 Flanders Road, was charged with promoting prostitution and permitting prostitution.

Shaoqing Liu, 51, also of 299 Flanders Road, was charged with prostitution and violation of a license required to give message therapy. Liu also could not present any positive identification.

The two women were arraigned Wednesday in New London Superior Court. Judge Kevin P. McMahon ordered Cao held in lieu of $20,000 and continued her case. He set Liu’s bond at $2,500.

The police said additional arrests were expected.

During the month of January, East Lyme police and the resident state trooper began their investigation after receiving anonymous tips from citizens who reported that sexual activity was taking place inside the business, according to an arrest warrant affidavit.

Police conducted surveillance at the spa and noted that many of the patrons were “older males who were nervous and evasive with their answers when asked where they were coming from.” A younger patron admitted that a masseuse had performed a sexual act on him after he subtly touched her thigh during the massage, which he said was a known signal. The majority of those stopped had been to the spa on more than one occasion, and several had traveled from out of state, according to the affidavit. They said an hour massage cost $60 and the tip ranged from $20 to $40.

Earlier this month, the investigating officers arranged for an unidentified confidential informant to patronize the massage parlor, providing him with cash and a recording device and instructions to enter the business to gather intelligence and determine if prostitution was occurring. During his massages, the informant asked the masseuse if she would “take care of me” and she performed a sexual act, according to the affidavit.

Police obtained a search and seizure warrant for the premises and arrest warrants for the listed owners. At about 2 p.m. Tuesday, state and local police, Homeland Security Investigations, Connecticut Department of Labor and Connecticut Department of Revenue Services assisted in the execution of the search and seizure warrant.

Police said they seized numerous items, including ledgers, files, counter-surveillance equipment and cash.

i.larraneta@theday.com

k.florin@theday.com