Las Vegas- Those who like a little liquid courage before getting an eyeful of silicone may soon have to frequent someplace other than the Crazy Horse Too Gentleman’s Club.
The topless club is set to go dry after the Las Vegas City Council revoked its liquor license last Wednesday, possibly scuttling a plea deal the club, its owner, Rick Rizzolo, [pictured center] and 16 employees signed with the federal government, in which they admitted to tax fraud, conspiracy to participate in racketeering and seeking to extort payment from club patrons.
The council also assessed a record $2.192 million fine.
A four-hour council hearing on the club’s fate included emotional testimony from the wife of a man paralyzed at Crazy Horse Too.
Amy Henry, wife of Kirk Henry, who has been a quadriplegic since disputing an $80 bar charge during a visit to the club, asked that the city not revoke or suspend the club’s tavern license. The Henrys stand to receive $10 million as part of the federal plea deal.
“Only now, after we’ve gone through five years of hell, do you decide to investigate?” Amy Henry asked the council.
She said the council was not helping them by shutting down the club before they get the settlement.
The prohibition on alcohol at Crazy Horse Too could take effect as early as this morning, said Mark Vincent, the city’s director of finance and business services.
Anthony Sgro, attorney for Rizzolo, said he will appeal the city’s decision and ask a District Court judge to temporarily block the license from being revoked until the matter can be heard in court. Sgro said he will also seek to withdraw his client’s guilty plea with the federal government because Rizzolo won’t be able to fulfill the obligations of the agreement.
“The council created this dilemma for the 2,000 people that work there, for Mr. Henry and Mrs. Henry,” Sgro said. “This will have a far-reaching ripple the council doesn’t realize.”
Deputy City Attorney Bill Henry presented the case against Rizzolo, recommending that the council suspend the club’s license for six months, levy the maximum fine, and bar those who pleaded guilty to the felonies from being involved in the club’s day-to-day operations.
City regulations allow fining or revoking a license for a business that “has been or is being conducted in an unlawful, illegal or impermissible manner.” The maximum fine the city can levy is $1,000 a day.
Rizzolo, Bill Henry said, “ran the Crazy Horse Too like Tony Soprano runs the Bada Bing.”
The council made its decision after wrestling with the effect it might have on the Henry family. But council members expressed concern that some of the same people who pleaded guilty to felonies continued to operate the club.
After years of insisting the matter posed no conflict of interest for him, Mayor Oscar Goodman recused himself from voting on it. He said he only recently became aware that one of the Crazy Horse Too’s employees was represented by his longtime law partner David Chesnoff.
Goodman said he has cut all ties to the law firm, Goodman and Chesnoff. He recused himself after City Attorney Brad Jerbic recommended doing so.
The council’s unanimous vote was applauded by former Councilman Steve Miller and auto shop owner “Buffalo” Jim Barrier, both longtime critics of the club and the city’s inaction on the violence there over the years.
After the vote, Rizzolo stalked out of the council chambers, put on dark sunglasses and stuck a cigarette in his mouth. He stared straight ahead and kept walking, ignoring a request for comment on the city’s action.
Not long after the council’s decision, Barrier, Miller and Peter “Chris” Christoff mugged for photos outside the club, grinning and giving thumbs up to cameraman Mike Christ.
“I didn’t expect this big a victory,” said Barrier, whose auto shop sits next to the strip club. “This was beyond my belief.”
Throughout the afternoon, strippers showed up for work at Crazy Horse Too. Some stayed, but many left after a short time inside.
“I don’t know what’s going on,” said one woman as she left the club.
A club manager said they were operating as usual and referred any questions to Sgro.
Bartenders liberally poured alcohol for patrons and dancers at the sparsely attended club on Wednesday night as about 10 to 15 customers interacted with dancers and lounged on couches.
One dancer, who said her name was Athena, said she had heard about the hearing but didn’t know any details.
“They had a court date today,” she said, “but everything’s cool.”
A bartender told one patron seated at the bar: “I just hope I have a job tomorrow.”
Without alcohol, the club will likely close, though it was too early for that decision to be finalized, Sgro said. He also said it would endanger a deal to sell the Crazy Horse Too, a requirement under the federal plea agreement, and the price his client could get for the club.
On June 1, Rizzolo, 16 employees and the Power Co., Rizzolo’s corporation, pleaded guilty to federal charges of tax fraud, conspiracy to participate in racketeering and seeking to extort payment from club patrons.
As part of the plea agreement, Rizzolo agreed to sell the club within 12 months and pay about $17 million in fines and penalties out of the proceeds from the sale.
Kirk and Amy Henry are set to receive a total of $10 million. The couple, who have a 12-year-old daughter and 16-year-old son, have received $1 million from the club’s insurance company; the other $9 million is due upon the sale of the club.
Amy Henry described the toll that caring for Kirk Henry has taken on the family, and said they would have likely lost their house without the help of family, friends and their church. Kirk Henry has said an employee attacked him just outside the front doors of he club during his Sept. 20, 2001, visit to Crazy Horse Too, breaking his neck and leaving him on the ground, unable to move.
The Henrys’ attorney, Don Campbell, ripped the City Council. “This is political piling on, and they’re doing it on the body of Kirk Henry,” he said.
Campbell, however, told the council that he was confident he would eventually get all the money owed the Henrys from Rizzolo. “I’ll chase Mr. Rizzolo to the gates of hell to get that money,” he said.
He and Sgro argued that during lengthy and complex negotiations with the federal government, no one discussed the possibility that the city might step in with its own penalty.
“The agreement was set up so that it (the club) could be sold at a non-fire-sale price,” Sgro told the council.
Saying his heart went out to the Henry family, Mayor Pro Tem Gary Reese said, “I have a hard time allowing them (Crazy Horse Too) to stay open any longer.” He then made a motion to revoke the club’s license and impose the maximum fine.
The U.S. Attorney’s office declined to comment on whether the City Council’s decision will affect Rizzolo’s plea deal. Rizzolo is scheduled for sentencing on Oct. 23.
History has shown that the revocation of a liquor license does not necessarily doom a strip club, as Sgro suggested Wednesday.
Former strip club owner Michael Galardi was indicted in 2003 on political corruption charges and soon after the Clark County Commission stripped him of his liquor license for his topless cabaret, Jaguars. Jaguars’ beverage sales plummeted from an average of $3,000 a night to $50 a night, forcing Galardi to close the business.
Galardi transferred ownership of his $15 million club to his father Jack Galardi. The elder Galardi leased the club to businessmen Randy Miller and Richard Gonzales, who quickly secured a liquor license and reopened the club.
Galardi testified in April that he is entitled to all the money from the sale of Jaguars should his father choose to get rid of the business and the land. Galardi said the club could fetch as much as $20 million.
Sgro said after paying the $17 million in fines, $5 million left on the building’s mortgage and taxes, Rizzolo would need to sell the club for $30 million or $35 million “before he sees a dollar.”
Council members suggested that Rizzolo has done well, hinting that they believed he could pay the $9 million still owed the Henry’s before the club was sold. Bill Henry with the city attorney’s office said Sgro has told him Rizzolo made $5 million to $6 million a year from the club.
But Sgro said the negative publicity surrounding the Crazy Horse Too has affected revenue.
Review-Journal writers Brian Haynes, David Kihara, Francis McCabe and Adrienne Packer contributed to this report.