According to court papers a second suspect, Seol Wo Cho, was also arrested. He's identified as the owner of two internet cafes in Fayetteville --one on Yadkin Road and another on Eastern Boulevard.
Cho is charged with money laundering, along with prostitution and human trafficking.
Federal authorities say the businesses were a front for Cho's other enterprise --smuggling prostitutes.
According to a federal indictment filed in New York earlier this month, Cho and Chon are among 22 defendants charged with transportation prostitutes between Korea, New York, Philadelphia, North Carolina Georgia, Texas and California.
The indictment states that Cho and Chon spoke several times about their prostitution business and how many customers they had. Federal agents say the multi-state ring has operated since January 2009.
Fayetteville Police say until the indictments were handed down, the prostitution operation wasn't on their radar.
"This particular one is a federal case handled strictly by them," Fayetteville Police Spokesperson Dan Grubb said. "What it involves is a large prostitution ring and this bust in particular is part of a larger investigation, obviously we can't comment on that. Mr. Cho and Ms. Chon are in federal custody. At this time they are in Wake County."
At their first court appearance Friday, Chon and Cho told the judge they will hire their own attorneys. The pair will be back in court next week.