Americans Targeted for Allegedly Running Underage Prostitution in Philippines Subic Bay has become synonymous with foreigners looking for sex.

SUBIC BAY, The Philippines Feb. 25, 2013 -- Arthur Benjamin is sitting at the edge of a small stage, wearing a lavender Hawaiian shirt and nursing a bottle of San Miguel Light beer. The 6-foot-6 mustachioed Texan lazily watches the half dozen or so girls dancing rather unenergetically around the stage's pole.

"I forgot your gift again, it's in the car," Benjamin says to one of the girls on stage, shouting above the pop music blaring from the speaker system.

The small, dingy bar, which Benjamin says he owns, is called Crow Bar. It's in a rundown part of the picturesque Subic Bay in the western Philippines, about a three hour drive from the capital, Manila. Home for 50 years to a United States naval base, Subic Bay has become synonymous with foreigners looking for sex in the long string of bars that line the main road along the coast.

Watch an encore presentation of this "Nightline" investigation on Friday, Nov. 29, at 12:23 a.m. ET on ABC.

The bars in this area are often packed with older foreign men ogling the young Filipina women available for the night for a "bar fine" of around 1,500 Filipino pesos, or just over $35. Many of the bars are owned and operated by Americans, often former military servicemen who either served on the base or whose ships docked here until the base was shuttered under political pressure in 1992.

Most of the prostitutes working in the bars are indeed 18 or older. But in the Philippines, just a small scratch to the surface can reveal a layer of young, underage girls who have mostly come from impoverished rural provinces to sell their bodies to help support their families.

Benjamin, 49, is, according to his own statements, one of the countless foreigners who has moved beyond just having sex with underage girls to owning and operating a bar where girls in scantily-clad outfits flaunt their bodies for patrons.

"My wife recently found out that I have this place," he tells an ABC News "Nightline" team, unaware they are journalists and recording the conversation on tiny hidden cameras disguised as shirt buttons.

Benjamin said that a "disgruntled waitress" had written his wife on Facebook, detailing his activities in Subic Bay.

"She sent her this thing saying that I have underage girls who stayed with me, that I [have anal sex with them], I own a bar, I've got other girls that I'm putting through high school, all this other crap," he said.

"All of which is true," he laughed. "However, I have to deny."

He sends a text message summoning his current girlfriend, a petite dark-skinned girl called Jade, who he said is just 16 years old. Benjamin says he bought the bar for her about a year ago and while most still call it Crow Bar, he officially re-named it with her last name.

"She needed a place to stay, I needed a place to do her. I bought a bar for her," he says, explaining that she lives in a house out back by the beach.

"You're not going to find anything like this in the States, not as a guy my age," he said as he looked down at Jade. "Ain't going to happen."

Benjamin is the latest target of Father Shay Cullen, a Catholic priest with a thick Irish brogue and fluency in the local language, Tagalog. Through his non-profit center called Preda, he's been crusading against underage sex trafficking in the Philippines for 40 years.

In December, Cullen started to encourage an 18 year-old prostitute who had worked at Crow Bar to tell him and his social workers what she saw inside the bar. Two months later, the girl, Marisol, agrees to sit down with Cullen and his social workers, leafing through pages of photos from the bar. She identities four girls who she says worked there as underage, including a baby-faced one who is known in the bar as Princess.

"These characters who come here looking for sex with young children and selling them to everybody like they're just like chickens in the market ... I mean, we are ready for the worst evil that we can imagine," Cullen said. "They are really evil people who need a millstone around their neck, to be thrown in the ocean here."

Father Shay, as he's known to everyone at Preda, blames the rampant underage prostitution on a combination of widespread poverty, lax and corrupt law enforcement and a "machismo kind of culture that says women are objects, girls are the most desirable."

In the months after Benjamin first appeared as a blip on Father Shay's radar in September, Father Shay says he has gathered enough evidence through Marisol and a team of Australian documentary filmmakers that had been working undercover to present it to the National Bureau of Investigation, the Filipino equivalent of the FBI.

Working with them on American cases is the U.S. Immigration and Customs Enforcement agency, or ICE. Under the PROTECT Act, they work with the Filipino authorities to extradite Americans back to the United States for prosecution.

"For me, as long as they're behind bars, not committing these acts, I sleep very well at night. Whether it's in the Philippines or in the United States," Special Agent Eric McLoughlin said in an interview.

McLoughlin estimates that he has been involved in thousands of investigations involving Americans in his three years here that involve sexually abusing minors.

"A lot of the Americans want to come here because they perceive it is easier to operate here than in the United States," he said. "And we are happy to remind them they are sadly mistaken. We are going to find them and they are going to be held accountable."

In early February, as Father Shay and Marisol drive to Manila to try to convince NBI to raid Benjamin's bar, ABC News "Nightline" set up another meeting with Benjamin at a café on the former American base.

Over coffee, he continues to boast about his girlfriend Jade, who he says is only 16, one of several underage girls he says he has been with. He met Jade a year and a half ago and slept with her and her older sister, he said, before taking Jade in.

"She was hungry, she needed someone to take care of her," he said, raising his arms. "I'm in. You know what I want.

"But if she f---s up, does something I don't like, I kick her out, doesn't bother me. There is always another one."

Asked how manages to hide the underage girls from the authorities, he credits his Mama-san, the term for a Filipina woman found in every bar who recruits and manages the girls. His Mama-san is called Lucy.

"Lucy is a master at it. She's had a lot of underage girls working for her whether it was at [another bar] Miami where she was before and my place," he explained. "The girls will get their older sisters' birth certificates, that's pretty much how they do it. Sister or cousin."

Benjamin claimed he pays graft money to four different groups of local authorities to "keep them off our ass."

"Someone put out that I was a pedophile, that I like younger girls. So Lucy talked to them and now [a top local police official] happens to be a good friend of ours, a good friend of mine," he laughs.

The raid on Benjamin's Crow Bar is given the green light by NBI. The Australian film crew working with Father Shay organizes a fake bachelor party for a Tuesday night, designed to guarantee that Benjamin will be there. ABC News "Nightline" is invited to the party to be inside as the raid happens. ICE will also be joining NBI on the raid.

When Tuesday evening arrives, the plan starts to unravel. No one knows where the government social workers are who will be working with the girls after the raid. NBI doesn't have enough vehicles and they're an hour and a half late to the pre-raid planning meeting at Preda.

Fearing Benjamin will slip away, the party group heads to the bar at the designated time, not knowing if the raid will actually happen.

Around 15 girls are already dancing on stage as the group walks in and squeal with delight upon seeing them. Princess is among them. She's just gotten braces that week. Mama Lucy has cooked a number of dishes for the party and heaps food onto her guests' plates. Benjamin, however, is nowhere to be seen.

Around 45 minutes later he shows up, explaining he'd been watching a sex show at a nearby bar.

Meanwhile, NBI and ICE finally show up at Preda and after an animated meeting, load into cars and head to the bar.

Confusion breaks out as NBI and ICE agents come through the door and start herding the girls into a corner.

"I want to see your hands! Sit down! No talking!" McLoughlin shouts at the girls.

Benjamin, in a blue polo shirt, looks like he's trying to blend into the wall. He's not addressed by the authorities and after several minutes, he slowly heads for the door but is blocked by an NBI agent.

When the ABC News "Nightline" team reveals to him that they are journalists and asks him about whether he is selling underage girls out of his bar, he denies everything.

"I have never had underage girls here and I do not have sex with underage girls," he says calmly.

"It's just talk," he explains, "a bit of braggadocio."

He does not admit to knowing Jade, even when we told him all of his conversations with ABC News "Nightline" had been recorded on camera.

None of the girls admit to being underage and none turn on Benjamin. Princess insists she is 18 and defends Benjamin as a "good man, a nice man."

Dentists check the girls' teeth, one of the easiest ways to estimate someone's age.

"It's not like the movies, we're not greeted with a hug and a kiss on the cheek," McLoughlin said. "A lot of times unfortunately they view us as the enemy because they've grown up in this environment. They have been here for a while."

NBI fails to find Benjamin's name on any of the bar's documentation. But after several of the girls tell them that Benjamin owns the bar, the NBI agents feel they have enough to arrest him.

"There's no minors here, we don't have minors here," Benjamin tells the lead NBI agent when told he is under arrest for employing minors in the bar. "Fine, I'll go with you. I have no problem with that."

They quietly lead him -- without handcuffs -- to a white van. The girls are in another one. Everyone heads back to the Preda center to figure out the next moves.

Despite the arrest, Father Shay is not savouring the moment, instead arguing with the agents about where the girls are being taken, concerned they will be mistreated and the case will fall apart if they go to Manila, which he views as deeply corrupt.

Finally, the authorities agree to take the girls to a Department of Social Welfare and Development center in nearby Papanga. Soon after, Princess admits to being 16 and her birth certificate confirms it. Four others have birth certificates showing they are of age, but the social workers suspect they could be fakes and their dental exams suggest they are minors.

Marisol, the 18-year-old who led Father Shay to Benjamin, says she will never go back to the bars and Preda is trying to give her work. Jade has disappeared. NBI says the house behind the bar is empty.

Three weeks after the raid, Benjamin and Mama Lucy remain in jail in Manila, held as the prosecution debates what to charge them with.

The Filipino authorities are doing "very, very little" to solve the plague of underage prostitution, Father Shay says. "There are some good, dedicated people. They are struggling. They have no budgets, no money."

He admits that the problem is overwhelming, that his contributions are small. But he remains defiant, even as he believes the problem is getting worse.

"I don't think give up is in our vocabulary. We will fight on. We have got all these children to save," Father Shay says. "And we rehabilitate and give them a new life and a great start in the future. We have a good organization here at Preda.

"So we'll keep on," he says, "We'll never give up."