Sgt. Barry Mickleburgh of the special investigations unit said an undercover officer made an appointment at the center on July 27.
"When he arrived, he was disrobed and inappropriately touched," Mickleburgh said. "He was told if he wanted [the inappropriate behavior] to continue it would be $40 extra."
The undercover officer then arrested the owner, who was booked at Santa Rita Jail, and the business was shut down.
Police were tipped on possible illicit activity when surrounding businesses began complaining about the high traffic of male customers at Tranquility Health Center. Police then conducted an investigation to see if the business was in compliance with the city ordinances. Together with the Alameda SAFE (sexual assault felony enforcement) Task Force, they conducted a sting operation.
Mickleburgh said prostitution is uncommon in Pleasanton, although there have been prostitution arrests "from time to time." He said the last biggest bust was in July 2006 when 13 people were arrested for conducting online prostitution out of an apartment complex.
At the initial hearing, a judge revoked the Tranquility Health Center massage permit. The owner reportedly is appealing the decision and will have a hearing in October.
The massage business permit process includes a background check and owners are given an informational packet which says the permit can be revoked if the business is found in violation.
"Owners are responsible for whatever happens in the business," Mickleburgh said, adding that the owners often know or should know if employees are engaging in illicit acts.