An Australian couple, including a woman who survived the Bali terrorist bombings in 2002, have been arrested on the tourist island after police conducted raids targeting illegal prostitution.

50-year-old Michael Jerome Le Grand and 44-year-old Lynley Le Grand, both long-term Bali residents, were taken into custody earlier this week after one of their businesses, a spa, was raided.

Police paraded the couple for the media in orange prison shirts on Friday, along with eight others arrested in the operation targeting the Pink Palace spa in Kuta district.

According to a Bali police spokesman, officers seized items as evidence, including lingerie, condoms and massage oil, and allege that the venue was offering sex for paying customers.

Police also allege one staff member employed at the spa was 17, and they are investigating whether to prosecute the owners under Indonesia’s child protection laws.

Prostitution is illegal in Indonesia, and police say they’re looking to prosecute the couple under the country’s anti-pornography law, which can carry jail sentences of between six months and 12 years.

Both Michael Le Grand and Lynley Le Grand have long-term residency in Bali, and own several businesses including popular cafe The Corner in Seminyak.

A police spokesman claimed the Pink Palace was turning over between $95,000 and $285,000 a year.

“The modus operandi is to offer massage services with various sensations in the Pink Palace, starting from 1 million to 2.5 million rupiah ($95 to $236),” alleged Police Grand Commissioner Adjutant I Ketut Suarnaya, the deputy director of the Bali police’s Criminal Investigation Directorate.

An Instagram account for the business described the massage venue as a “blissful sanctuary of relaxation”, but the account has now been taken down.

Lynley Le Grand was injured in the 2002 terrorist bombing attacks in Kuta, and told the ABC on the bombing’s 20th anniversary in 2022 that she’s since made the island her home, and is raising her children in Bali.

Staff who answered phones at The Corner cafe and another one of the couple’s businesses, The Goat pub in Seminyak, said they were unaware of the case.

Local Bali media has reported that Michael Le Grand was arrested in 2022 and then released during a police investigation into illegal gambling at The Goat, a large venue that plays live sport.

A lawyer for the couple could not be reached.