Las Vegas, Nev. – A class action lawsuit filed today alleges a wide-ranging extortion scheme involving Las Vegas’s most prominent adult entertainment clubs and taxi and limousine companies.

The suit, which was filed in federal court in Las Vegas, alleges that taxi and limousine companies extorted more than $40 million in illegal kickbacks from local strip clubs.

According to the complaint, taxi and limousine drivers demanded payments from the clubs of as much as $100 per male passenger. If the clubs refused to pay, the drivers would simply divert passengers to a different club.

The lawsuit claims that the kickback scheme hurts Las Vegas at a time when the city is already suffering economically.

“Vegas has been one of the top tourist destinations in America for families, but its position is being threatened,” says Jay Edelson, lead attorney for the lawsuit. “This is precisely the type of activity that keeps families away.”

As taxi drivers prefer to pick up men who are more likely to go to strip clubs, the suit claims that families and women were snubbed by drivers and found it hard to hail a cab at night. The suit also claims that millions of dollars in tax revenue have gone unpaid to the local, state, and federal government.

The allegations of a wide-ranging extortion scheme have been hotly discussed locally. An recent expose by George Knapp, a nationally recognized Las Vegas investigative reporter, found that cabbies routinely lied to passengers—telling them that certain clubs are undesirable or unsafe (“riddled with bullet holes” was one description) in hopes of diverting them to a “paying” location. After state legislators attempted to put an end to this practice, the cab drivers responded by flexing their muscles. They shut down the strip and threatened to crash ground transportation at the airport.

“The vast majority of taxi and limo drivers are honest and hardworking people, but this minority has a stranglehold on the city,” says Edelson. “It is finally time to put this practice to an end.”

The suit is being brought on behalf of Theodore Trapp who lives in Southern California, and as a nationwide class. The suit names more than two dozen defendants including, Deja Vu Showgirls, Spearmint Rhino, Cheetah’s, Yellow Cab Co. and Checker Cab Co. It also references Tony Chong, an individual taxi driver who, according to the suit, has publicly admitted his involvement in the extortion scheme.