Michael Galardi, left, and his lawyer, Robert Rose, face U.S. District Judge Larry Hicks during Galardi's sentencing Monday. Illustration by David Stroud.
Former strip club owner Michael Galardi arrives at the Lloyd George U.S. Courthouse in downtown Las Vegas on Monday morning to be sentenced for bribing Clark County commissioners. Photo by Gary Thompson.
Former strip club entrepreneur Michael Galardi was "shocked and stunned" Monday after a federal judge gave him a 30-month sentence despite Galardi's four years of cooperating with investigators and prosecutors, his lawyer said.
"Mr. Galardi is not in a state of mind to speak right now," attorney Robert Rose said as the pair emerged from the Lloyd George U.S. Courthouse.
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U.S. District Judge Larry Hicks also imposed a $100,000 fine, the most allowed under the law, and ordered Galardi to pay Las Vegas and Clark County $200,000 each in restitution. Galardi requested to be sent to a federal prison in Taft, Calif., which is southwest of Bakersfield. The 45-year-old must start serving his sentence by June 22.
Hicks said Galardi was the leader of a scheme to bribe Clark County commissioners for votes that benefited his multimillion-dollar strip club empire.
"This is one of the most reprehensible crimes of public corruption that has ever been prosecuted in the state of Nevada," Hicks said. "None of it would have happened ... but for Mr. Galardi paying the money."
In 2003, Galardi signed a plea deal that put a five-year cap on his potential sentence if he provided substantial help to the government.
Hicks acknowledged that Galardi's testimony played a significant role in the May convictions of former Clark County Commissioners Dario Herrera and Mary Kincaid-Chauncey.
But Hicks was reluctant to be too lenient because he agreed with the government's argument Galardi played a leadership role in the scheme.
"Mr. Galardi was there at the inception of the scheme," Acting U.S. Attorney Steven Myhre said after the sentencing hearing. "He indeed benefited from the scheme.
Rose pleaded with Hicks to show Galardi compassion, emphasizing that Galardi divested himself from his business that generated $14 million a year and that his help was crucial to the government's case.
Rose also said that Galardi is raising his two children, ages 7 and 9, by himself as his estranged wife has struggled with a drinking problem.
Hicks rejected his arguments and sided with Assistant U.S. Attorney Daniel Schiess, who recommended a 30-month sentence.
"It was a fair sentence," a soft-spoken Rose said afterward. "It could have been better, it could have been worse."
Galardi, Kincaid-Chauncey, Herrera and former Clark County commissioners Erin Kenny and Lance Malone were indicted on the political corruption charges in 2003. Galardi and Kenny pleaded guilty.
Kincaid-Chauncey was sentenced to 30 months in federal prison, Herrera is serving a 51-month term, and Malone received a six-year sentence. Kenny is scheduled to be sentenced in June.
Malone was the first commissioner to forge a relationship with Galardi. After Malone lost his bid for re-election in 2000, he was hired as Galardi's lobbyist. He served as Galardi's bagman, delivering thousands of dollars in cash to the sitting commissioners.
Galardi testified last year that Las Vegas City Councilman Michael McDonald first suggested to him that it would be beneficial to pay elected officials to watch over matters concerning the strip club industry. Galardi said that he began paying McDonald $5,000 a month and that McDonald gave himself the title of "consultant."
Rose told Hicks that Galardi initially paid McDonald and the commissioners to be left alone. It quickly turned into extortion, Rose said. Elected officials began demanding cash, and Galardi grew so angry, that he nearly went to the authorities, Rose said.
"The cruel irony, your honor, is that in July 2002, Mr. Galardi wanted to talk to the FBI about his frustration over this endless cycle of payments," Rose said.
Rose said Galardi's attorney, Pete Christiansen, talked him out of it. Christiansen reassured Galardi that the payments were legal campaign contributions, Rose said.
In Galardi's pre-sentencing report, Rose said Christiansen brought fellow attorneys to Galardi's Cheetah's club for "lawyers night." They were given free lap dances and drinks, Rose said.
"Christiansen picked the lawyers to invite to 'lawyers' day' at Cheetah's," Rose wrote in his report. "Christiansen deployed Galardi's cash. Christiansen advised Galardi as to which judges and politicians he should contribute to."
Rose named Malone, McDonald and Christiansen as "key players" who could have made the difference in Galardi's actions that landed him in a federal courtroom.
"I don't know how they escaped it (the indictment)," Galardi said when asked outside the courtroom about McDonald and Christiansen.
Christiansen did not return the Review-Journal's call seeking comment Monday. McDonald has declined to comment on Galardi's statements.
Inside the courtroom, Galardi spoke of his affection for Las Vegas, where he has lived since he was a 4-year-old.
"I'm very sorry for what I've done," Galardi said. "I love this city. This city has been very good to me and my family.
"The last four years have been pure hell for me. The stress has been unbearable," he said.
Hicks admonished Galardi, but he saved his harshest comments for Herrera and Kenny, two Democrats who were aiming for higher office while pocketing cash bribes from a strip club owner.
The judge slammed Herrera for his testimony during which he denied ever accepting money from Galardi or Malone. Hicks said that Herrera could have been a U.S. congressman had he not been tripped up by ethics troubles.
"He would have been more dangerous in the years to come if it had not been for this prosecution and this defendant," Hicks said.
Kenny was in a tight race for lieutenant governor when her phone call with Malone was intercepted by the government: "Tell me what I've got to do, but I've gotta have money from him (Galardi). ... I'm begging now ... I'm on my knees begging," she said.
"The value of this community learning what she was all about cannot be undermined," Hicks said.
Myhre declined to comment whether his office is continuing to pursue additional indictments in the political corruption scandal.
Galardi now will have to face a second sentencing, March 22 in San Diego.
In Southern California, Galardi was involved in a scheme similar to his one in Southern Nevada. He and Malone were accused of paying off San Diego city councilmen.
Galardi signed a plea agreement in that case that allows him to serve no more than five years in prison. The sentence he receives in San Diego will run concurrently with the one he was given Monday in Las Vegas.
Hicks said he hopes sentences he levied will send a message to other politicians looking to pad their pockets at the public's expense. Whether the messages have been heard remains to be seen, said Schiess, who successfully prosecuted Herrera and Kincaid-Chauncey.
"We'll wait to see the actions in the future," Schiess said. "We are hoping they hear it."
INVESTIGATION TIMELINE
May 14, 2003: The 2-year-old corruption investigation, dubbed Operation Catcall by the FBI, becomes public. Agents raid the Galardi family's feline-themed strip clubs in Las Vegas and San Diego, and the offices of three San Diego City Council members.
July 14, 2003: Former Clark County Commissioner Erin Kenny, who has been cooperating with the government, secretly pleads guilty in Las Vegas to conspiracy to commit wire fraud and two counts of wire fraud. She admits that she received bribes from strip club owner Michael Galardi.
Aug. 28, 2003: A San Diego grand jury indicts Galardi, former Clark County Commissioner Lance Malone, and San Diego City Councilmen Ralph Inzunza, Michael Zucchet and Charles Lewis. The defendants are accused of plotting to overturn a San Diego law that prohibits physical contact between strippers and their patrons.
Sept. 2, 2003: Galardi employee John D'Intino of San Diego, also charged in the indictment, pleads guilty to conspiracy to commit wire fraud. His plea agreement states that he, Galardi and Malone conspired to pay the three San Diego councilmen in an attempt to reverse the “no-touch” law.
Sept. 8, 2003: Galardi pleads guilty in San Diego to conspiracy to commit wire fraud and agrees to testify against his co-defendants. According to his plea agreement, he conspired with Malone and D'Intino to make illegal payments to the three councilmen and a police officer.
Oct. 24, 2003: Galardi secretly pleads guilty in Las Vegas to racketeering. He admits to paying between $200,000 and $400,000 to “certain public officials” in exchange for their influence over matters affecting his strip clubs. He also agrees to cooperate with authorities investigating the Las Vegas case.
Nov. 6, 2003: A Las Vegas grand jury indicts Clark County Commission Chairwoman Mary Kincaid-Chauncey, former Commissioner Dario Herrera and Malone on conspiracy and wire fraud charges. Malone is accused of paying bribes to Kincaid-Chauncey, Herrera and Kenny on Galardi's behalf. Plea agreements reached with Galardi and Kenny in the Las Vegas case are unsealed.
Aug. 8, 2004: Lewis dies of liver disease in San Diego at the age of 37.
May 3, 2005: San Diego corruption trial starts.
July 18, 2005: Jurors in San Diego convict Malone, Inzunza and Zucchet of conspiracy, wire fraud and extortion charges.
Nov. 10, 2005: U.S. District Judge Jeffrey Miller of San Diego sentences Malone to three years in prison and Inzunza to 21 months.
The judge grants Zucchet's request for a judgment of acquittal on most of the counts in his case and grants Zucchet a new trial on the two remaining counts.
Malone and Inzunza both vow to appeal their convictions and are allowed to remain free on bond during the appeal process.
March 14, 2006: Trial starts for Herrera and Kincaid-Chauncey in U.S. District Judge Larry Hicks' courtroom.
May 5, 2006: Jurors convict Herrera and Kincaid-Chauncey of conspiracy, wire fraud and extortion charges.
Aug. 21, 2006: Hicks levies a 51-month sentence against Herrera. Kincaid-Chauncey receives a 30-month prison term.
Sept. 18, 2006: Three years after he was indicted and just days before his trial is scheduled to begin, Malone signs a plea agreement with the government.
Jan. 12: Herrera turns himself in to the Federal Prison Camp in Florence, Colo. to start his sentence. Kincaid-Chauncey surrenders at the women's prison camp in Victorville, Calif.
Feb. 14: Hicks sentences Malone to six years in prison. He is ordered to surrender to the government by April 9.
March 12: Galardi receives a 30-month prison sentence. He must turn himself in to authorities by June 22.
POLITICAL CORRUPTION Galardi Investigation News Archive