Strip club owner Rick Rizzolo talks on a cell phone Thursday as he leaves the Lloyd George U.S. Courthouse with his attorney, Tony Sgro. Photo by K.M. Cannon. Robert D'Apice Crazy Horse Too manager pleaded guilty to racketeering charge on Wednesday

Rick Rizzolo, the 47-year-old owner of the Crazy Horse Too Gentlemen's Club, pleaded guilty Thursday to a felony tax charge as part of a deal that will end his career in the lucrative strip club industry.

Rizzolo, who has operated the Crazy Horse for more than 20 years, must sell the club as part of his plea agreement, which precludes him from operating any sexually oriented businesses in the United States "for the duration of his natural life."

The plea will cost Rizzolo nearly $17 million and could send him to prison for up to 16 months, but it ends a federal investigation of him since at least 1995 when authorities began using wiretaps to gather information about him.

"This is a deal an innocent man has to take," attorney Tony Sgro said Thursday.

But Sgro, who represents Rizzolo, stopped short of an outright declaration of his client's innocence. "We gave up a lot of legitimate defenses by taking this deal," the attorney said. "Some of those defenses you're going to see at the sentencing hearing."

Sgro said he plans to seek probation when Rizzolo appears before U.S. District Judge Philip Pro for sentencing, scheduled for Sept. 15.

By accepting the plea agreement, Sgro said, Rizzolo avoided the possibility of a grand jury indicting him on more serious charges such as racketeering.

"This is a life-changing experience to be indicted in this sort of case," Sgro said.

Sgro said conservative estimates put the length of a trial in the case at four months. When plea negotiations began, he said, prosecutors estimated the trial would take a year.

"That was the most intimidating thing that they ever told me," Sgro said.

He said Rizzolo also risked the potential of a 12-year prison term and complete divestiture of his club if convicted of all the charges that prosecutors were considering.

When investigators raided the Crazy Horse Too in February 2003, their search warrant indicated they were looking for ties between the business and the mob.

The warrant specifically authorized officers to seize "documents and records which would demonstrate the existence of tribute payments" made to La Cosa Nostra crime families for allowing the business to operate in Las Vegas.

In an interview a day after the raid, Rizzolo told the Review-Journal that his club makes more than $10 million a year. "It makes so much money, I wouldn't do something stupid to jeopardize it," he said at the time.

During the 2003 interview, Rizzolo speculated that law enforcement officials had targeted him because of his longtime friendship with mob associate Joey Cusumano.

Sgro spearheaded negotiations that led to a group plea agreement in the Crazy Horse Too case. He said the talks began a few months after the 2003 search but intensified in late April.

In the weeks that followed, the attorney said, he spent more time with government officials than with his own family. "I worked myself right out of the biggest criminal retainer I'd have got in my career," Sgro joked.

On Wednesday, 16 current and former Crazy Horse employees entered guilty pleas before U.S. District Judge Kent Dawson.

Rizzolo "feels bad that so many people close to him got sucked in," Sgro said.

Dawson declined to handle Rizzolo's case because of a conflict of interest: The judge's brother, John E. Dawson, is an attorney who has represented Rizzolo on civil matters.

Rizzolo and 14 other defendants pleaded guilty to conspiracy to defraud the United States. In court on Thursday, Rizzolo told Pro he devised a system that allowed employees to under-report the cash income they received from dancers' earnings at the end of each shift.

"Did you understand that taxes wouldn't be paid on the money that wasn't reported?" the judge asked.

"Yes," Rizzolo replied.

Among those who attended the plea hearing was "Buffalo" Jim Barrier, an outspoken critic of Rizzolo's who operates a neighboring business, All State Auto & Marine Repair.

"I was just here to see justice served on somebody who wreaked havoc on my neighborhood for many years," Barrier said after the hearing. "I was just here to see him get what he deserves."

Sgro also entered a plea Thursday on behalf of Rizzolo's corporation, The Power Co., which pleaded guilty to conspiracy to participate in an enterprise engaged in racketeering activity. Shift manager Robert D'Apice, 51, pleaded guilty to the same charge Wednesday.

D'Apice's plea agreement affirms that he sought on at least two occasions "to extort payment from patrons through explicit or implicit threats of violence, and through actual use of force and physical violence against patrons in which various degrees of bodily injury were caused." No specific incident is included in the plea agreement.

An indictment against D'Apice cited the September 2001 incident in which Kansas City tourist Kirk Henry was paralyzed from the chest down. In a lawsuit, Henry alleges that D'Apice broke his neck outside the club.

D'Apice's plea agreement includes the following statement: "Although defendant denies causing permanent and life-threatening injury to any patron of the Crazy Horse Too, defendant concedes that the government could present evidence sufficient to establish for the purposes of sentencing by a preponderance of the evidence that at least one extortion caused such injury."

Attorney Michael Cristalli, who represents D'Apice, said his client's plea bargain calls for a prison term in the range of 37 to 46 months. Dawson is scheduled to sentence D'Apice on Oct. 17.

As part of its deal, The Power Co. must pay $10 million to Kirk and Amy Henry, although no one has accepted blame for Kirk Henry's injury.

Sgro said Rizzolo met the pair about nine months ago during an informal settlement conference. "He felt bad for them. His heart went out to them," the attorney said.

Sgro said the Henrys played a video for Rizzolo that showed a day in Kirk Henry's life.

"Rick came out of that meeting with a whole different disposition," the attorney said.

The Henrys' attorney, Donald Campbell, has declined to comment on plea negotiations in the criminal case.

In addition to paying the Henrys, Rizzolo and his corporation will pay $5 million in fines and forfeiture and $1.7 million to settle tax liability.

"This plea allows us to quickly and efficiently accomplish the primary goals of our investigation: to remove the current ownership from the Crazy Horse Too strip club and bring closure to Kirk Henry and his family for the brutal and tragic extortionate attack at the club," said a prepared statement issued Thursday by U.S. Attorney Daniel Bogden. "The corporate plea to racketeering charges acknowledges the serious threat that the Crazy Horse Too has presented to the community, and the 17 pleas to felony charges by past and present managers and employees of the club requires all those involved in its illegal operations to acknowledge some level of responsibility and guilt for its criminal existence."

Outside Pro's courtroom Thursday, Rizzolo declined to comment on his plea, other than to say that he plans to retire and continue living in Las Vegas. He and his wife, Lisa, were divorced last year. They have three grown children.

Sgro said prosecutors have agreed not to pursue criminal charges against Rizzolo's sister, Annette; brother, Ralph; or father, Bart.

Rick Rizzolo has agreed to sell the Crazy Horse within 12 months. The government has the right to "disapprove" a buyer who is a close relative.