Bartenders stopped serving alcohol at the Crazy Horse Too Gentlemen's Club shortly after 4 p.m. Thursday, after city staff served an order revoking the club's liquor license. A couple of hours later, the booze began flowing again inside the club, setting up a showdown. Photo by Craig L. Moran.

The booze stopped flowing at the Crazy Horse Too Gentlemen's Club on Thursday afternoon as the city formalized the alcohol ban at the topless joint, but a few hours later the club resumed selling high-priced drinks, setting up a showdown with city officials.

City staff, accompanied by Las Vegas police, handed the no-booze order to the club about 4 p.m., putting into effect the liquor license revocation unanimously passed by the Las Vegas City Council on Wednesday.

Shortly after 4 p.m., bartenders stopped serving alcohol and gave away glasses of soda and bottles of water instead.

A couple of hours later, the booze began flowing again inside the club.

Anthony Sgro, the club's attorney, said that by 6:30 p.m., he "had determined that the way the city served the order was invalid, and until and unless the revocation order is properly served," the club will continue to sell and serve alcoholic beverages. He declined to say what the city had done wrong.

City officials were surprised when informed late Thursday by the Review-Journal that the club had resumed serving alcohol.

"There's a good chance that we would go out there," city spokesman David Riggleman said about 9:30 p.m. Thursday. "This is a direct violation."

"It is of great concern to us that they're ignoring a lawful directive," Riggleman added. "The proper course (for the Crazy Horse Too) is to handle this in the courtroom, not simply do as they please."

Meanwhile, customers bellied up to the bar inside the club Thursday night, getting a beer and a shot of whiskey for $17.50.

Earlier Thursday, Sgro filed a counter-offensive to the city's order in District Court. The club's attorney is seeking a temporary restraining order against the city's action. It is scheduled to be heard this morning in front of District Judge Mark Denton.

The City Council on Wednesday took action against Crazy Horse Too for crimes outlined in a plea deal the club, its owner, Rick Rizzolo, and 16 employees signed with the federal government. In the plea deal they admitted to tax fraud, conspiracy to participate in racketeering and seeking to extort payment from club patrons.

In addition to revoking the club's liquor license, the city also fined the club $2.192 million.

In his complaint seeking to halt enforcement of the city's order, Sgro claims Las Vegas violated the open meeting law repeatedly and that the penalty decided on by the council "did not contain any findings of fact or conclusions of law in compliance with the provisions" in the city's code.

Sgro said that if his appeal fails and the liquor license is revoked, he would seek to withdraw Rizzolo's federal guilty plea because the sale of the club, which is a condition of the plea deal, wouldn't be possible at a reasonable price.

As long as the club continues operating with a liquor license "the potential buyer is interested," Sgro said. "To purchase the Crazy Horse as a juice bar, he's (the potential buyer) not into it. If the club shuts down, you lose the girls, you lose the staff, you lose everyone involved in running it."

But one strip club expert disagreed.

"It's kind of a screwy business, but it's attractive to guys with money who imagine this is a pretty neat way to make a living," said Jack Sheehan, author of "Skin City: Uncovering the Las Vegas Sex Industry."

"In Las Vegas, with the name and reputation and location of the Crazy Horse, it will draw back customers, get the girls back with no problem at all," Sheehan said.

He said Crazy Horse Too is one of the most successful strip club in Las Vegas, if not the most successful.

Sgro said Rizzolo would make the decision whether to close the club if he can't serve alcohol there.

Rizzolo was joined at the Wednesday City Council hearing by an unlikely ally.

Amy Henry, wife of quadriplegic Kirk Henry, pleaded with the council not to revoke or suspend the club's liquor license so that the family could receive a settlement. Under the federal plea agreement, once the club is sold, her family is entitled to $9 million, because of an attack on Henry after he disputed an $80 bill at the club in 2001.

Mayor Oscar Goodman, who had recused himself from voting on the club's discipline on Wednesday because of a conflict of interest, said at a news conference Thursday that he didn't think he had much of a conflict regarding Crazy Horse Too. He abstained, he said, on advice from the city attorney.

"I thought the penalty was harsh," Goodman said. "I would have done something different, but I wasn't voting and I wasn't conducting the meeting, and that's the way it fell."

Goodman, however, defended the council against claims by the Henrys' lawyer that the council was acting for political reasons.

"It wasn't grandstanding," he said. "This was a very painful experience. ... They (the council members) were agonizing over the Henry family, and they were balancing that with the need to teach them (Crazy Horse Too) a lesson."

Sgro's complaint against the city says that on or before July 3, the decision was made by city staff to start proceedings against the Crazy Horse Too without giving anyone from the company that owns the club notice, a violation of the open meeting law.

Also, the complaint says that no one at the company that owns the club was given notice of the July 12 hearing in which the date of Wednesday's hearing was determined.

The complaint also argues that at the July 12 meeting, Goodman told Sgro to "refrain from making arguments on behalf of Plaintiff."

In an interview Thursday, Sgro added that the council had a conflict of interest, because it wants to widen Industrial Road and eminent domain proceedings are "in the pike."

City Manager Doug Selby said he hasn't seen the complaint, and couldn't respond in detail. But, he said, "We're very careful to review our rules and follow open meeting laws at all times."

Review-Journal writers Brian Haynes and David Kihara contributed to this story.