Rick Rizzolo, who was the owner of the troubled Crazy Horse Too topless gentleman’s club, was in a federal courthouse, Wednesday to enter a plea in his tax evasion case.
The charges stretch back to 2014 when he was indicted by a grand jury on two counts.
The accusations are he evaded $1.7 million in employment tax payments from 2000 to 2002 and that he owed $860,000 in income taxes from 2008 to 2011.
The details of the proposed agreement were not made public. The Las Vegas businessman’s lawyer, Rich Tanasi, reportedly got the government to a conditional plea agreement.
But US District Judge, Gloria Navarro postponed a change of plea hearing to next week, saying she wants to review sentencing documents from his previous criminal case before she accepts the plea.
If not for the arrangement, he could have faced five years in prison and up to a $500,000 fine.
Serious Charges Dropped
One of the items she wanted to look over was Rizzolo’s checkered past. Specifically she wants to study his involvement in the club’s activities, where he was charged for racketeering when the strip club was operating under his control.
In 2006, he was the subject of a federal investigation that accused him of using the establishment as a profitable criminal enterprise. It was alleged that employees skimmed dancer’s earnings and padded customer’s bills.
Those charges were never proven and instead he was found guilty on a single felony tax conviction and was sentenced to 366 days in prison. As an additional part of the deal, the government took ownership of the bar in 2007 and sold it four years later for $3 million.
Patron Successfully Sues for $10 million
One customer that balked at Rizzolo’s business style was Kirk Henry. On vacation from Kansas in 2001, he protested when he felt he was overcharged on an $80 bar bill. Bouncers beat him so severely in the parking lot they snapped his neck and made him a quadriplegic.
The tourist sued and a judge awarded him $10 million in damages. He received $1.3 million and then Rizzolo failed to pay the rest, resulting in 11 months incarceration in 2011 for deceiving his parole officer about hiding money.
Henry died in March, but legally his heirs are still owed the judgment. In May the 9th U.S. Circuit Court of Appeals ruled that Rizzolo fraudulently placed large sums of money in a hidden account to avoid paying restitution to the Henry estate.
The case is on appeal and will be resolved in the coming years.