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May 07, 2006
Copyright © Las Vegas Review-Journal


JOHN L. SMITH: Government offers Rizzolo a sweet deal he shouldn't refuse

They made Rick Rizzolo an offer he couldn't refuse.

Or, at least one he shouldn't resist.

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If, as expected, the ink dries on his deal with the federal government sometime this week, the owner of the Crazy Horse Too topless club will plead guilty to a tax fraud charge, serve a 10- to 16-month sentence with up to half that time under house arrest, pay up to $15 million in fines and civil penalties, and sell his Industrial Road club.

It's a sweet deal for Rizzolo, who will avoid not only the possibility of a decade in a federal penitentiary and the loss of most of his assets, but the crushing weight of a lengthy indictment process that could have lasted three more years with the possibility of a five-month trial at the end of the road. If the deal goes through, 17 other defendants will be included in the global settlement, most receiving no jail time.

Better to take the bee sting on one end than the guillotine on the other.

With so many defendants and legal subplots, there are always possible sticking points.

The Crazy Horse Too investigation, which in recent years focused on allegations of violence, tax evasion, money laundering, and prostitution at the club, began a decade ago and kicked around law enforcement offices for years without much interest shown. Along the way, more than 8,000 hours of court-ordered wiretaps were generated. A person listening to the tapes eight hours a day, five days a week would need four years to complete the task. There was a possibility of bringing more than 1,000 witnesses before the grand jury, a reliable source says.

Rizzolo was going to pay a heavy price either way, and he wisely listened to his attorney, Tony Sgro, who is hesitant to discuss the parameters of the deal until it's done.

"It's been no secret that there have been negotiations," Sgro says. "At this time they appear very favorable. We're in a range right now that would induce an innocent man to plead."

And a guilty one, too, for that matter.

Sgro was a fierce bulldog for his client, snarling at every move made by FBI agents, IRS investigators, Metro detectives, and smart-aleck columnists. He surely knows that small defeats can disguise big victories.

Most of the remaining defendants have agreed to plead guilty to a single tax fraud count and will serve no jail time. Vincent Faraci, a reputed Bonanno crime family soldier and the son of New York mobster "Johnny Green" Faraci, will serve just eight to 16 months as part of an agreement that has him pleading guilty to tax charges but enables him to avoid admitting he's associated with organized crime. It also will save him justifying his inexplicable coziness and clout with owner-of-record Rizzolo.

Faraci attorney David Chesnoff said his client was prepared to fight potential racketeering charges, but was willing to join the global settlement. A split sentence will enable him to serve half his time under house arrest.

"Mr. Faraci felt that it was the right thing to do," Chesnoff says. "The more serious allegations were very defensible. The fact it was reduced to a tax case reflects that fact. It's a very satisfactory resolution."

And the allegations of mob connections?

"That has nothing to do with this plea," the attorney said.

Rizzolo will receive the biggest headlines, but the resourceful Faraci might have won the best deal.

Even Bobby D'Apice, the man suspected of snapping the neck of Crazy Horse Too customer and Kansas City, Kan., tourist Kirk Henry, an action that generated a bruising litigation brought by former federal prosecutor Don Campbell and helped open the door to the criminal RICO investigation, is in line to serve fewer than four years in prison. He'll avoid watching Henry from his paraplegic's wheelchair testify that his neck was broken over an $80 bar tab dispute. From such testimony are decade-long prison sentences made.

Some will grouse that the government didn't play fair. Others will remind you that the Crazy Horse Too was the closest thing to a mobbed-up Bada Bing club this side of "The Sopranos."

It's a deal Rizzolo & Co. would be foolish to refuse.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call 383-0295.

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