Judge: Police, topless club must work out differences

A district judge ordered Las Vegas police and the closed Club Paradise on Wednesday to work out differences that will let the longtime topless club obtain readable copies of key computer evidence seized in a June 6 raid.

The evidence includes business and customer records on hard drives the club needs to reopen, according to club lawyers Dominic Gentile and Vincent Savarese.

Club Paradise, operating for two decades in the shadow of the Hard Rock Hotel & Casino on Paradise Road, was one of the busiest and longest-running strip clubs in Las Vegas until it shut down 47 days ago. It went dark after police and IRS agents executed search warrants looking for evidence of credit card fraud by a handful of dancers and managers.

This kind of crime is not common in the lucrative topless club business here, according to people close to the Club Paradise investigation.

Gentile told District Judge James Bixler on Wednesday that the nightclub, which he believes is not a target of the investigation, has lost a total of $645,600 since the police raid. That’s roughly $13,700 a day.

Some employees have been forced to seek unemployment compensation, but the club doesn’t have its employment records to substantiate their claims with the state, Gentile said.

Attorney Kathleen Bliss, who represents the Metropolitan Police Department, said the department has turned over copies of the confiscated hard drives to Club Paradise, but Gentile argued there was no retrievable data on the copies.

“All I need is to be able to get the data back in a form that would permit the club to reopen,” Gentile said.

Bixler ordered the two sides to arrange a meeting of their information technology experts to figure out a way to retrieve the data on the hard drives and report back to him Aug. 13.

Gentile said he was told detectives have not submitted a case for prosecution to the district attorney’s office, but employees were given letters indicating they were grand jury targets.

Las Vegas Review-Journal columnist John L. Smith first reported in June that police and IRS agents were investigating the credit card fraud allegations involving the dancers. Customers were alleged to have been overcharged thousands of dollars and some may have been drugged in the credit scheme, Smith wrote.

Gentile and Savarese said in court papers they learned from employees interviewed by police that the investigation was focusing on two to three dancers, who were independent contractors, and three male managers who resigned a week before police showed up at the club. The managers stepped down rather than take polygraphs about a $50,000 theft from a safe at the club, the lawyers said.

Police executed a broad search warrant at Club Paradise on June 6 that sought records of dealings with seven customers who may have been affected. Most of these customers were from out of town and several were regarded as very wealthy.

Those close to the investigation said customers angry about credit card overcharges reported the irregularities to law enforcement authorities.

The search warrant also sought an array of business records, bank statements, credit card accounts, drugs and drug paraphernalia, computers and cell phones and other personal property belonging to 21 dancers and employees.

No records of Club Paradise owner Geralyn Cecola and her key employee, husband Sam Cecola, both of Chicago, were sought by police, according to the search warrant. Sam Cecola, who owns adult businesses in Chicago, has a 1997 tax conviction.

Police also obtained a second search warrant by telephone during the raid to seize $100,000 they found in a safe. Gentile and Savarese contended in their court papers that the money was unlawfully taken and are trying to get it back.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135. Find him on Twitter: @JGermanRJ.