Rick Rizzolo Strip club owner agrees to plead guilty to conspiracy to evade taxes

Strip club owner Rick Rizzolo has signed a plea agreement that could cost him nearly $17 million and send him to prison for up to 16 months, his lawyer said Wednesday.

"He made a really calculated decision," attorney Tony Sgro said. "Even someone innocent has to determine whether he wants to spend the next five years of his life fighting against a governmental machine that wants to take him down."

Sgro described Rizzolo's plea agreement as a "package deal" that requires the signatures of 14 other suspects by Friday evening.

"If every person does not sign off, no one gets the benefit of the deal," the lawyer said.

He said he has no reason to believe anyone will refuse to sign.

Sgro said Rizzolo, owner of the Crazy Horse Too Gentlemen's Club, decided to sign the agreement late Tuesday night. The deal calls for Rizzolo to plead guilty to conspiracy to evade taxes, a felony.

By signing the agreement, Rizzolo admitted that "he afforded an opportunity to his employees to receive cash and report that income inaccurately," Sgro said.

Sgro said authorities have been investigating Rizzolo since at least 1995, when they began using wiretaps to gather information about him.

In February 2003, dozens of law enforcement officers raided his topless club at 2476 Industrial Road. Authorities closed the business while they conducted an 11-hour search of its premises and nearby storage units.

Those involved in the search included agents from the FBI, Drug Enforcement Administration and Internal Revenue Service, as well as Las Vegas police.

Although the search warrant indicated investigators were looking for ties between the Crazy Horse and the mob, Sgro said Rizzolo's plea deal makes no mention of organized crime.

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.

It also authorized the seizure of records that "would establish the identity of those persons who may have a hidden ownership in the club."

In addition, the warrant authorized officers to seize controlled substances, pill- and money-counting devices, measuring devices, packaging materials, scales "and other paraphernalia used in distributing controlled substances."

Sgro said authorities also searched the club in late 2001.

In January 2005, shift manager Robert D'Apice was arrested at the Crazy Horse on racketeering and tax evasion charges. A federal indictment accuses him and unnamed others at the club of using force to compel customers to pay disputed charges.

The indictment cites 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 attorney, Michael Cristalli, said he received a proposed plea agreement Wednesday and expects his client to sign it.

Cristalli said the deal calls for D'Apice to plead guilty to conspiracy to participate in an enterprise engaged in racketeering activity, a felony, and to receive a prison sentence in the range of 37 to 46 months.

Cristalli said the deal requires his client to admit that he was involved in at least two "extortionate acts" in the course of his work as a shift manager at the Crazy Horse.

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

Sgro said Rizzolo's plea agreement calls for a prison sentence of 10 to 16 months, but the attorney has the right to seek probation.

The deal also requires Rizzolo to pay $10 million to Henry. In addition, Rizzolo has agreed to pay the government $5 million in fines and forfeiture and $1.7 million to settle his tax liability.

Sgro said Rizzolo has agreed to sell the Crazy Horse within a year to pay off his debts.

"He's prepared to move on," the attorney said.

In an interview after the 2003 raid, Rizzolo told the Review-Journal 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.

Rizzolo has operated the club since his father, Bart, opened it more than 23 years ago.

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

Sgro said prosecutors have agreed, as part of their deal with Rick Rizzolo, not to pursue criminal charges against his sister, Annette; brother, Ralph; or father.

Assistant U.S. Attorney Eric Johnson, who is prosecuting the Rizzolo case, declined to comment on the plea agreement Wednesday. Attorney Donald Campbell, who represents Henry in his civil case, also declined to comment.

Attorney David Chesnoff, who represents reputed mob soldier Vincent Faraci, said his client has been offered a deal similar to Rizzolo's and will sign it if doing so helps the entire group.

"This was a very defensible situation, but it's in everybody's best interest always to try to settle things," Chesnoff said.