A Kalihi bar accused of allowing prostitution on its premises lost its case on Thursday before the Ho­no­lulu Liquor Commission.

Club Fire and Ice, at 727 Waiakamilo Road, was fined $1,600 and found guilty of failing to suppress lewd conduct, allowing an employee to drink on the job, and overlooking another employee violation on Oct. 15.

Bar owner Chong Jones defended her bar before the commission and accused an undercover officer of setting up her employee.

"Why all the lies?" she asked the officer, who she claimed was intoxicated that day. "He led her on and on."

The Honolulu police officer, whose identity is being withheld because he is undercover with the Narcotics Vice Division, testified before the commission that the woman agreed to a massage and sexual intercourse for $150.

He said he had been in the bar conversing with an employee named "Minna" for about two hours and had ordered two Heineken Lights and took a shot of tequila with her. He ordered a second shot of tequila but dumped it on the floor, he said.

When he told Minna that he was leaving, she said he didn’t have to and that he could have fun at Fire and Ice.

She asked him how much he was willing to spend and said $150 would cover a massage and sex, he said.

"I confirmed with her $150 for a massage and sex, and she said, ‘Yes,’" the officer testified.

After he handed her the money, she placed it between a napkin and the table and then gave him a shoulder massage, the officer said.

The officer made a phone call, and other officers came in and arrested the woman. Honolulu Liquor Commission investigators also present at the time cited the bar for several violations, including failing to suppress lewd behavior.

The employee, who asked that her name not be published because her family doesn’t know she works at the bar, said the officer told her his shoulder hurt from playing golf and asked her for a massage. She declined, but gave in after he asked again.

She demonstrated for the commission how she stood behind the man to massage his shoulder for about three minutes with one hand while turning away to watch a TV behind her.

She said the officer then told her he was going to a massage parlor for sex.

"I say, ‘You crazy,’" she said. "You married. Why you want to do that?"

She said the officer placed $150 on the table but she pushed it away with her index finger. Soon after, police came in and arrested her for investigation of prostitution.

"I don’t discuss the money to sell my body," she told the commission. "He don’t ask me anything."

Chong Jones said her employee didn’t know it was illegal to give a friendly massage.

Commissioner Iris Okawa told Jones that it was the bar’s responsibility to know the rules. She added that the commission is working to make the liquor laws available in foreign languages.