Judge orders ex-owner of strip club to pay up

A federal judge on Monday paved the way for a reluctant former Crazy Horse Too owner Rick Rizzolo to begin paying millions of dollars in restitution stemming from his 2006 criminal plea agreement with the government.

A large portion of the payments, more than $9 million, would go to Kirk Henry, a Kansas City area man paralyzed following a 2001 fight at Rizzolo's strip club.

Henry's lawyer, Don Campbell, told U.S. District Judge Philip Pro during an hourlong hearing that Rizzolo continued to lead a wealthy lifestyle after getting out of prison, running up $900-plus nightclub and restaurant tabs, maintaining hundreds of thousands of dollars in foreign trusts and dealing only in cash.

"His lifestyle hasn't changed at all," Campbell said after the hearing.

Pro ordered Rizzolo to comply with requests from his probation officer for personal financial information so that authorities can begin setting up a monthly payment schedule. Among his other debts is a $1.7 million tab owed to the IRS.

Lawyers for Rizzolo argued that he had satisfied his debts after the government took possession of the Crazy Horse Too in 2007. They contended the government "squandered" the value of the shut-down club by failing to sell it in a timely fashion. Rizzolo had been hoping to pay his debts, including those to Henry, with proceeds from the sale.

The government estimated the club was worth $31 million to $35 million in June 2008, but the latest offer has come in during an economic downturn at only $10.5 million.

Pro, however, told Rizzolo in court that the declining value of the Crazy Horse Too does not relieve him of his restitution obligations.

Rizzolo pleaded guilty to a criminal tax charge in June 2006, as part of an agreement to end a decadelong FBI racketeering probe of the strip club. He was ordered to serve a 366 days in federal prison.

Contact reporter Jeff German at jgerman@reviewjournal.com or 702-380-8135.