Strip club owner pleads guilty to tax evasion, avoids association to mob
LAS VEGAS (AP) – A strip club owner pleaded guilty Thursday to a felony tax evasion charge but avoided any mention of organized crime as the government ended a decade-long federal probe of whether the club was linked to the mob.
Rick Rizzolo, owner of the Crazy Horse Too, pleaded guilty in U.S. District Court to conspiracy to defraud the government, pledged to sell the club, and agreed not to contest some $17 million in fines, forfeitures and restitution.
The financial settlement includes a $10 million payment to Kirk Henry, a tourist from Olathe, Kan., whose separate civil lawsuit alleges he was paralyzed when he was beaten by club employees in 2001.
The club, using the corporate name The Power Company Inc. and represented by Rizzolo’s lawyer, Tony Sgro, pleaded guilty to racketeering and will bear the brunt of the financial penalties.
Under the terms of the deal, the company acknowledged that employees had padded customers’ bills and used threats and force to compel customers to pay disputed charges.
Daniel Bogden, U.S. attorney for Nevada, called Thursday’s deals an efficient way to achieve what he called a primary goal of the investigation – to strip Rizzolo of club ownership and bring closure to Henry and his family “for the brutal and tragic extortionate attack at the club.”
The plea deal allows the government to veto a sale if the buyer is a close relative or business partner with Rizzolo, a felon or has proven ties with organized crime.
“The corporate plea to racketeering charges acknowledges the serious threat that the Crazy Horse Too has presented to the community,” Bogden said.
The plea agreement requires Rizzolo to divest his interest in the white-pillared, Roman-themed club just off the Las Vegas Strip. It prohibits him from owning any other adult entertainment business in the U.S.
Rizzolo, 47, is expected to be sentenced to no more than 16 months in federal prison, prosecutors said. U.S. District Judge Philip Pro set sentencing for Sept. 15.
Rizzolo declined comment as he and Sgro left the courtroom.
“It’s a relief to have it behind us,” Sgro said.
Rizzolo remained free without bail following his conviction.
The pleas came a day after 16 current and former club employees pleaded guilty to federal charges. Fourteen pleaded guilty to felony tax evasion for failure to report income from tips given to dancers and shared among club employees.
One club manager, Robert D’Apice, 51, pleaded guilty Wednesday to a racketeering charge. A former waitress, Paula McBride, 28, pleaded guilty to perjury. All remain free pending sentencing. None is expected to get more than 16 months in prison. None of those who pleaded guilty this week case admits direct responsibility for the September 2001 beating that left Henry paralyzed from the chest down.
Henry’s lawyer, Donald Campbell, did not immediately respond Thursday to requests for comment.
Club executives long denied allegations of ties to organized crime, kickbacks to cab drivers for delivering tourists to the door, and roughing up patrons who protested allegedly inflated credit card bills.
The federal probe of the Crazy Horse Too dates at least to 1995, when Sgro said the FBI submitted documents to obtain authorizations for wiretaps. Las Vegas police raided the club in late 2001, following Henry’s injury, and the FBI and local police raided it again in February 2003.
“Buffalo” Jim Barrier, the flamboyant owner of a neighboring car repair shop who has often clashed with Rizzolo and club employees, called the pleas the end of a “reign of terror” dating to the 1980s.
“It’s better than nothing,” said Barrier, who said he summoned police after watching one patron beaten to death outside the club in 1995. “It was hard to stop him, but he’s a convicted felon.”