Friday, March 07, 2003
Copyright © Las Vegas Review-Journal

Rizzolo smiling after court ruling

Judge orders return of all items seized in raid at topless club

Rick Rizzolo, owner of the Crazy Horse Too Gentlemen's Club, smiles Thursday as he leaves federal court in downtown Las Vegas. He came to court to seek the return of items seized during a recent search of his business. The judge granted his request. Photo by Jeff Scheid. Albert Rapuano, general manager of the Crazy Horse Too Gentlemen's Club, leaves federal court Thursday with a box of documents that were returned to the business. Photo by Jeff Scheid.

Topless club owner Rick Rizzolo expressed satisfaction Thursday after a federal court hearing at which he sought the return of items seized from his business.

"The judge gave us back everything we wanted," Rizzolo said.

Dozens of law enforcement officers searched the Crazy Horse Too Gentlemen's Club on Feb. 20 as part of an ongoing investigation into possible links between the business and organized crime.

After the raid, Crazy Horse attorney Tony Sgro filed a motion that sought the return of some of the seized property. He argued that the items were needed for the business to continue operating.

Authorities had returned some of the items, including cash and computer equipment, before Thursday morning's hearing. After the hearing they turned over sheriff's cards belonging to employees and dancers, as well as copies of financial records, vacation requests and locker assignments.

In addition, U.S. Magistrate Judge Peggy Leen, who signed the search warrant, ordered the FBI to return all legal documents seized from the club and to turn over its copies of those documents to the court.

Sgro argued that the documents are protected by attorney-client privilege and should not have been seized or copied.

Assistant U.S. Attorney Eric Johnson said agents took the documents because they appeared in files containing financial records, which the warrant authorized them to seize. Johnson said FBI agents were instructed not to read any legal documents they found in the seized property.

"And you understand the repercussion of having anyone review a document that has been labeled attorney-client-privileged material?" Leen asked Johnson.

"That's right, your honor," Johnson replied.

Sgro said agents knew they were seizing privileged material because they listed "legal correspondence" on an inventory of items they took from the club during the search.

Nine cash registers also were seized from the business, and Leen ordered the FBI to return them no later than Tuesday.

"That's a big thing, because those cash registers are set up for the club," Rizzolo said after the hearing.

Sgro said authorities returned more than $800,000 in cash and Crazy Bucks, scrip used by customers in the club, before Thursday's hearing.

The attorney argued that officers violated one of the Federal Rules of Criminal Procedure by refusing to allow a Crazy Horse representative to observe the search. Johnson acknowledged that no such representative was allowed to watch the search but denied that a rule was violated.

Leen asked Sgro what remedy the law allowed for a violation of the rule. "Just like the NBA, sometimes there's the no-harm, no-foul rule," the judge said.

Sgro said he needed to research the issue further. After the hearing, he said he would ask for the return of all items seized during the search.

In court, Sgro also argued that officers violated his client's right to privacy by notifying news media about the search in advance. A television truck appeared at the scene minutes before the search began.

After the hearing, Sgro said he would seek financial relief for the privacy violation.

He said the Crazy Horse Too club in Chicago recently notified Rizzolo that it was ending its consulting agreement with him and changing its name because of the negative publicity surrounding the Las Vegas search. Sgro said Rizzolo earned $120,000 a year as a consultant for the club.

"We have now a solid basis to prove that we suffered financially as a result of the high-profile nature of the raid," the attorney said.

Although Rizzolo's club, at 2476 Industrial Road, was closed for about 15 hours on the day of the most recent search, the owner said business since has returned to normal. He said publicity surrounding the search even has helped his business by giving it free advertising.