Updated 

Mustang Ranch brothel owner's firm loses $1.3 million claim


VIRGINIA CITY — A Storey County jury on Friday awarded $1.3 million to a man who said Mustang Ranch owner and Storey County Commissioner Lance Gilman cheated him out of his share of brothel profits.

The District Court jury in Virginia City awarded the judgment to Tom Gonzales of Fort Lauderdale, Fla., for breach of contract, and breach of good faith and fair dealing.

District Judge James Wilson had dismissed five other counts Thursday that personally named Gilman and brothel manager Susan Austin as co-defendants in Gonzales’ civil lawsuit. The judgment is against Gilman’s company Cash Assets Management LLC, which controlled the Wild Horse brothel.

The lawsuit, which originally sought $1.5 million, accused Gilman of conspiring with county officials to cut the Florida businessman out of his share of the profits at the legal house of prostitution just east of Reno.

Gonzales claims Gilman, who was elected commissioner in November, used his cozy relationship with county officials to pull the license of the neighboring Wild Horse brothel before Gilman then merged it with the Mustang Ranch under a new license.

The dispute dates to 2003, when Gonzales’ company, TC Investments LLC, lent Gilman $2.25 million to help build the Wild Horse brothel.

Gonzales said Storey County altered its brothel ordinance in 2009, outlawing his business arrangement with Gilman after the government received input from Gilman.

Gilman denied any conspiracy. His lawyer, Mark Gunderson of Reno, said it was Gonzales’ responsibility to understand the change in the law requiring anyone with any investment in a brothel to be licensed.

Wray said Gonzales never thought of himself as a co-owner or partner in the brothel business because all he did was lend money to Gilman, who also is the exclusive broker for Storey County’s Tahoe Reno Industrial Center, a major source of tax revenue for Storey County.

Gunderson said it might be difficult to collect a judgment after Gilman and Austin were dropped from the suit.

“Would you like to have some judgments? I’ve got a drawer full that we can’t collect,” he told the Reno Gazette-Journal.

But Gonzales said he has some leverage that might pressure Gilman to pay. His company, TG Investments, holds the mortgage on the land where Gilman’s Mustang Ranch brothel now sits. The building of the old Wild Horse brothel is now part of the Mustang.

“We are still the lender,” Gonzales said. “We (TG Investments) are a professional lending company. We have a mortgage against the land, against all the fixtures and everything else.”

Gonzales said his company could foreclose or sell the property if the judgment is not paid.

 

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