Human trafficking from Thailand to the Canberra sex industry is under investigation after raids on Fyshwick brothels this week, a prosecutor says.
An Australian woman was charged and five Thai nationals detained over immigration offences as a result of simultaneous raids on escort agencies in Fyshwick on Monday morning.
However, a Canberra court has heard one witness reported being subject to a $50,000 debt.
Five sex industry businesses at two premises were forced to cease trading when WorkSafe ACT issued prohibition notices after the raids.
Jamaree Suksom, 57, of Dickson, was refused bail in the ACT Magistrates Court on Tuesday when she appeared before Magistrate Karen Fryar on charges of allowing unlawful non-citizens to work and allowing a non-citizen to work in breach of a visa. She has not yet entered any pleas.
Court documents said the authorities raided Pink Girls and Chok Dee Massage about 6.15am on Monday, when they discovered five Thai nationals who had been working illegally in Australia.
The documents said the Pink Girls premises had been "unhygienic and in a state of disrepair".
Checks of some women revealed they had held either current or expired student or tourism visas, and did not have the right to work. One woman's student visa had expired in September 2015.
Suksom allegedly told police she did not conduct checks into the immigration status of workers or inspect passports, and did not recruit the women.
Court documents said police seized items of interest in relation to "potential future human trafficking and/or forced labor offences".
Suksom applied for bail, but the application was opposed by Commonwealth prosecutor Edward Chen on the grounds she could interfere with witnesses or evidence, commit further offences, and posed a flight risk.
Mr Chen said the investigation was still in its early stages and the accused could seek to inhibit the integrity of the case.
He said further charges could be laid as evidence collected had pointed to trafficking from Thailand.
Mr Chen also told the court the accused had links to four brothels - two of which had been shut down - which he alleged were her only means to support herself.
He argued that, if released, she would seek income via exploitation.
In response, the defence argued Suksom could rely on family in the ACT for financial support.
The defence said there was no evidence before the court linking Suksom to other brothels, police had already seized evidence, and the accused had no history of breaching court orders.
The defence said bail conditions could mitigate any potential issues.
In refusing bail, Ms Fryar said the allegations were serious and the potential links to alleged human trafficking were a significant concern.
"That is a most significant matter," she said.
Ms Fryar said the bail refusal was not open ended and could be re-visited after investigators had been given time to collect evidence.
Suksom will reappear next month.
A police statement, published on Tuesday morning before the matter came before the court, said the joint operation involved ACT Policing, WorkSafe ACT inspectors and federal authorities.
In a statement, WorkSafe ACT said it had issued a number of prohibition and improvement notices on escort and associated businesses in Fyshwick after identifying serious safety issues, including electrical safety, fire risks, and hygiene, such as high levels of mould.
Three prohibition notices were issued to prevent the occupation of, or business being run from, the premises, while an additional two improvement notices were issued to adjoining premises for similar safety issues.
ACT Work Safety Commissioner Greg Jones said businesses must ensure workers were provided with a safe work environment free of hazards and risks.
"When this does not occur, WorkSafe ACT has no hesitation in issuing prohibition notices to stop trading or occupation of a building until safety issues are rectified. Other regulatory action will also be considered where it is appropriate to do so," Mr Jones said.
"The safety issues identified were significant and inspectors acted quickly."
Police urged anyone with information that could help with their investigation to contact Crime Stoppers on 1800 333 000, or via the Crime Stoppers ACT website.
Information can be provided anonymously, quoting reference number 6286189.