David Davies led a quiet life in his Palo Alto home for more than 20 years, but an investigative report by the Milpitas Police Department and the Department of State Diplomatic Security Service alleges he and his current wife trafficked more than 100 women in Santa Clara County over six years as part of a nationwide operation.
Davies, 57, and his wife, Larong Hu, 38, have been charged with 10 felony counts that include conspiracy, pimping and pandering to procure another for prostitution. They were arrested last week at their Milpitas home after a two-year investigation.
Davies, whose LinkedIn page shows that he has been employed for 16 years as a principal engineer at San Jose-based software company Broadcom, owns a home in Palo Alto near Eleanor Pardee Park, according to county records.
Broadcom said in an emailed statement: "We are taking this matter very seriously and hold our employees to the highest standards of integrity and accountability. We are thoroughly reviewing these allegations and will take appropriate action upon the completion of that review."
Neighbors said they were surprised by the arrest. He had lived in the home since 2002 with a five-year gap when he and his former wife were separating, neighbor Carli Scott recalled.
The wife and their children continued to live in the home until about 2018, when Davies returned and became the sole occupant for about 18 months to two years, she said. Despite his long presence in the neighborhood, little was known about him, she added.
"He was not close to anyone in the neighborhood," said Scott, who added that she never noticed anything unusual such as a brothel at the one-story, four-bedroom house.
"I'm sure I would've noticed if people were coming and going," she said. "It's been a shock to everyone in the neighborhood. There are just six homes on this street. He kept pretty much to himself."
This summer he began renovating the house, and it was clear it was empty, she added.
The investigation into Davies and Hu was launched more than two years ago by a complaint regarding a brothel they allegedly ran at a Milpitas apartment building. Milpitas police sought to infiltrate the brothel but were unsuccessful because only people with "referrals" were allowed in, according to the report, which was filed in Santa Clara County Superior Court. The brothels also moved from apartment to apartment, making it difficult to bust the inhabitants.
Police learned through a trail of social media posts on sex websites, advertising in a regional newspaper and texts and emails that the couple's alleged sex-trafficking operation actually began in 2015. Women were largely procured from the People's Republic of China but also from South Korea and eastern Europe. Once they arrived, the women were placed on a scheduled circuit of travel from brothel to brothel in different cities across the U.S. The workers stayed at the locations for one week, were not allowed to leave the location and performed sex acts for money with as many as 10 to 15 customers each day, according to the investigation.
The report doesn't say how the couple linked to the other prostitution operations throughout the country and shared the women on the circuit. A spokesperson for the U.S. Department of State Diplomatic Security Service, which is involved in the investigation with the Milpitas Police Department, said they can't comment because the investigation is ongoing.
The investigation narrative does offer a glimpse into how the operation worked, however. Over six years, Davies and Hu allegedly set up five known brothels in apartments in Milpitas and San Jose. The first was in 2015 when they rented an apartment at 501 Murphy Ranch Road in Milpitas. The couple often used a "straw renter" who leased the apartment on behalf of the brothel organization, the report states. The straw renter is a person who doesn't live in the apartment but receives some financial incentive or other benefit.
The couple allegedly advertised the women on sites such as WeChat, a Chinese-based social networking platform, and a dedicated website owned by Hu and Davies. The website advertised prices for sex acts and lengths of the "dates" and showed images of scantily clad women.
Davies and Hu also placed ads promoting "new girls every week" between the ages of 19 and 24 in the Sing Tao Daily, an Asian-oriented newspaper largely circulated in the South Bay Asian community, according to the report. Police were able to track brothel apartment locations through those ads.
The brothels accepted payments through Venmo and PayPal accounts that were linked to Hu and her Gmail account.
Investigators linked Davies to the website through an Internet Protocol (IP) address, which was registered to him. They also found multiple text messages between the couple regarding managing and displaying the images of the young women on various known sex websites, according to the report. Police also tracked Davies to a San Jose brothel through GPS data, according to the report.
The yearslong operation was cracked open after the FBI in 2018 seized the website Backpage.com in a sex-trafficking investigation by the Justice Department. Through data collected in that investigation, the Diplomatic Security Service investigators found a "lengthy conspiracy" between Davies and Hu in advertising and operating sex brothels in Santa Clara County from 2015 to the present.
Milpitas police conducted video surveillance of some of the locations and collected evidence such as condoms, in quantities consistent with the number of men seen going in and out of the apartments, from trash dumped by the brothel manager.
Davies and Hu would sometimes close down one brothel and move it to another apartment in the same building, the report states. At one point, they switched apartments with another man; police think both apartments were being used as brothels.
They also allegedly tried to undermine at least one rival brothel operator in Milpitas. In an unrelated investigation, detectives had discovered a brothel at 501 Murphy Ranch Road in another apartment. Video captured Davies and Hu walking through the apartment building and putting notes on apartment doors. After the couple left, police found the typewritten notes, which alerted tenants that a sex brothel was being run out of the rival's apartment and told them to notify San Jose police.
"After reviewing this material, it was clear that David Davies and Larong Hu were attempting to eliminate brothel competition by getting the brothel, located at Unit #125, closed," the investigative report noted.
The couple also allegedly ran brothels at apartments in San Jose at 25 Rio Robles East and 320 Crescent Village Circle. One of the sex workers who was arrested in April at the Crescent Village location told investigators from the Santa Clara County District Attorney's Office and the federal Diplomatic Security Service how the women were procured and coerced to work.
The woman had come to the U.S. to work and pay for her mother's extensive medical bills, she told investigators. She had traveled to the U.S. with a tour group and paid for her own transportation. While in China, she had found group message boards and chats about massage work prior to arriving in the U.S.
She eventually found a job at a legitimate massage business, but she was lured into the sex work by the group messages on WeChat. The group chats have "bosses," who would indicate the specific amount of money to be paid for work, would provide good working conditions and would send money back to China for the women.
The worker said that once employed, she couldn't leave the brothels since the "bosses" would not pay the workers until the completion of the scheduled "dates" with the customers. They also took her passport and identification with the explanation that the documents were kept safe from theft in the brothels. Each time she arrived at a new brothel, she had to turn over her documents for the duration of her time there, she said.
The worker had to pay for her own food and medicine. Although she never experienced violence, the bosses would become angry and they would speak harshly if she didn't complete her work, she said. They threatened to blacklist her so that she couldn't get another job in any other brothels and couldn't earn any money, she said. The worker described Hu as the boss of the San Jose brothel, but since the worker had only just arrived the day before being arrested, she said she had no experience with Hu.
The worker said she typically made $120 per client, of which the boss would keep $40, and the "house" would deduct additional money for her food, housing and as a house tip.
The brothel owners sent the girls' earnings back home for them through an unknown method. The owners took a cut of 10% to 15% of the amount being transferred, she said.
Police rescued six people from the brothels. The investigation is ongoing and is also looking into more than $2 million in proceeds from the brothel operations that the couple allegedly laundered.
Davies is scheduled to return to Santa Clara County Superior Court on June 26.
Anyone who is or knows a victim of human trafficking is asked to call 911 or the 24-Hour National Human Trafficking Hotline at 888-373-7888. Callers can also reach the hotline by texting 233733 for online chats. Human trafficking victims, whether U.S. citizens or not, are eligible for services including immigration assistance.
More resources can be found at countysheriff.sccgov.org.