In a new development to the ABC Four Corners sex slavery scandal a Crikey investigation has discovered that the legal brothel operator at the centre of sex trafficking allegations detailed in the program does not hold the brothel licence. The licence is held by a well-respected Sydney builder, who was educated at the exclusive Knox Grammar School on Sydney’s upper north shore, and again raises questions about the strength of NSW’s brothel laws.

Four Corners exposed the 5 Star brothel in Cathedral Street, Woolloomooloo, in Sydney and its operator Peter Thoo as being linked to a sex trafficking syndicate where allegedly three prostitutes, recruited from Taiwan, worked and were transferred to another brothel at Artarmon in which he also had an interest.

One of the sex workers, named Joyce, told Four Corners that Thoo had met her at Sydney Airport and drove her straight to the brothel: “After I arrived to the company I thought I could take a break first, and have something to eat and start work the next day, but they just asked me to put on make-up and start working that very day.

“They didn’t arrange accommodation for me to stay so I just had to sleep at the place, and that night I didn’t even have a quilt. It was very cold and I have to take a towel to sleep till the morning.”

Meet Anthony Whaling, a 45-year-old businessman in the building and construction industry.  The builder, who lists sailing and rugby as his interests, also owns the 5 Star brothel premises and he was the applicant to the Sydney City Council to obtain the development consent to operate the brothel from the premises as regulation of brothels falls under NSW Planning laws. Let’s call him the front man.

But instead of operating the brothel, he leases the premises to Peter Thoo, who runs the day-to-day operations of the brothel including hiring and firing prostitutes. Thoo is unknown to the council or any other authority and his name does not appear on any official documents held by the council in relation to the brothel. Whaling receives only lease payments, not a cut of the brothel takings.

There is no suggestion that Whaling or Thoo have broken the law but it does bring to light that the lax laws may invite organised crime to infiltrate the industry.

In an exclusive interview with Crikey yesterday, Whaling said that despite the claims made against his lessee, Peter Thoo, he will not terminate the lease agreement. “I’ve known him for 15 years and I regard him highly. I’ve investigated the matter and I am satisfied he is not involved in sex trafficking as alleged by the ABC,” he said.

When questioned about whether Thoo had a criminal background, Whaling said: “I don’t know, I have never asked him. When the girl arrived in Australia he took her to a hotel at her request and she started work a few days later. She started work at the Artarmon brothel he ran and she lasted three or four days then shot through. He never saw her again. Thoo treats the girls fine and throws parties for them. I’ve attended one and they all look happy to me.”

Whaling said he was stunned when he watched the program on TV and immediately phoned the Australian Federal Police, the Immigration Department and Kings Cross police station to tell them he had no idea about the alleged trafficking and requested to know whether he or Thoo were under investigation. “I was told that there were no particular lines of inquiry and that Thoo is not under investigation and I haven’t heard from the council for over a year,” Whaling said.

According to a spokeswoman from the Sydney City Council, everything is above board. “Development applications for all premises, including sex premises, apply to the address only, not the applicant. As long as the operator of the business is not altering the operation, they are not required to notify the council.”

It’s an extraordinary situation and one that must be fixed by the O’Farrell government. While the government has announced it will introduce probity checks on owners, what is it going to do with lessor/lessee arrangements and if the owner appoints a manager to run the brothel in their stead?

Legislation in Victoria and Queensland prohibit such arrangements. In Queensland there are penalties including fines and/or imprisonment for operating a brothel with an unlicensed partner/person. A person is considered to operate a brothel in association with another person if the person directly receives income from the brothel.