When Alex asked, Hank answered, "Alex, that girl is a prostitu... I mean she works in a pleasure house operating on a street that is adjacent to the slum area. You know, we sometimes visit that place, um, to... you know, enjoy."
Hank changed his wording in between since Tom usually doesn't like him calling those girls whore or a prostitute.
Understandably so since his own mother was forced to do such type work so she can fill her's and her son's stomach.
Alex indeed knew that they sometimes visit such types of establishments at least two days a week.
He knew that because his puppets would always be around them to provide protection and also because the pleasure house that they visit now is owned by him.
They were previously used to be operated by the three gangs but now they had been disbanded since their existence was no longer needed.