Police in Providence have begun cracking down on prostitution houses disguised as massage parlors, but some spa owners say they are being unfairly targeted.

"Today, I been here whole day, OK, and only one customer come in," said "Kim," a masseuse at the Bally Day Spa in downtown Providence. She said business has come to a standstill following a police raid.

Police believe a loophole in the state's prostitution law (search) that criminalizes only cash-for-sex outdoors keeps them from putting the cuffs on a thriving sex industry hiding in the massage therapy business.

"It's a big problem in the inner cities [and] large cities," said state Rep. Joe Moran (search).

Moran, who is also police chief of Central Falls, co-authored a bill that requires all massage parlor employees to be licensed massage therapists and submit to extensive criminal background checks.

"If they have a past record of any sex offenses they won't be able to get a license to begin with," Moran said.

"Lily," the manager of the Midori Spa, believes police should keep their hands off the massage industry. Her business, which she insists is free of prostitution, was also targeted by police.

"They have to do their job, but they cannot change the laws. They have to follow the law," she said.

Rhode Island's American Civil Liberties Union (search), which fought previous legislation it said unfairly targeted prostitutes, blames lack of enforcement of the current laws. Steven Brown, the chapter's head, believes the new bill only hurts legitimate massage therapists.

"All this bill is doing is really targeting the wrong people. It's targeting innocent professionals. And it won't have any effect whatsoever on the illegal prostitution trade," Brown said.

Moran says his bill is simply a starting point. It remains to be seen if the bill, which still awaits the governor's approval, will do anything to close the loophole in the state's prostitution law.

Click in the box near the top of the story to watch a report by FOX News' Todd Connor.