Ex-nightclub owner’s sentence on hold

A federal judge on Thursday put a temporary hold on the three-year probation sentence he handed out a day earlier to longtime nightclub operator Steve Davidovici.

At a hastily called hearing, U.S. District Judge Kent Dawson said he was staying the sentence until questions were resolved about whether his son, Brian K. Dawson, worked for Davidovici and whether the judge has a conflict in the case.

Dawson told lawyers in the case that members of the media had made inquiries to his chambers about the possible connections between his son and Davidovici, who pleaded guilty in a $7 million tip-concealing scheme at Pure Nightclub at Caesars Palace.

Dawson said that his son doesn't live with him and that until Thursday, he didn't know where his son worked. He also said he doubted that his son ever was employed by Davidovici, who once co-owned Pure and had ties to other nightclubs.

Davidovici's lawyer, David Chesnoff, told Dawson he saw no potential conflict or any reason for the judge to get off the case.

Justice Department lawyers Christopher Maietta and Joseph Rillotta, however, said they needed more time to assess the matter. Dawson said he would reconvene the hearing on July 9 to give the prosecutors, who participated from Washington, D.C., time to investigate.

The prosecutors, who had sought an 18-month prison sentence for Davidovici, again lodged an objection to the sentence.

Dawson on Wednesday also had sentenced Davidovici, 48, to eight months of electronically monitored home confinement. And he ordered the convicted nightclub icon to pay the Internal Revenue Service $141,306 in restitution.

Word was circulating within the media all week that Brian Dawson, 38, worked as a bartender at Gallery Nightclub, which has been associated with Davidovici.

Dawson said in court on Thursday that there was no mention of any connection between Gallery and Davidovici in the pre-sentence report he received before ordering probation for Davidovici.

And Chesnoff told Dawson that Davidovici had no "equity interest" in Gallery, which is at Planet Hollywood Resort, and no dealings at all with the nightclub at the time of the sentencing.

Sources later told the Las Vegas Review-Journal that Dawson's son obtained a work card in May 2011 as a bartender at Chateau Nightclub & Gardens, where Davidovici was a co-owner. Chateau is at Paris Las Vegas.

Chesnoff declined to comment after Thursday's hearing on that possible connection. He has said Davidovici was divesting himself of his nightclub interests to focus on his new business, the Sugar Factory, a confectionery that has stores in four casinos, including Paris Las Vegas.

In handing out the lighter sentence on Wednesday, Dawson said he was concerned that Davidovici would not get the care he needed in prison for his eye condition, acute optic neuropathy, which threatens to leave him legally blind.

Prosecutors argued that Davidovici deserved to go to prison because he controlled the tip scheme, which they said involved $7 million over a 30-month period between 2005 and 2007.

Davidovici pleaded guilty in March to filing a false 2006 tax return. He acknowledged that he failed to report $403,732 in tip income in 2005 and 2006 and owed the IRS $141,306 in taxes.

His plea came more than four years after IRS agents began investigating allegations that Pure executives, VIP hosts and doormen evaded hundreds of thousands of dollars in taxes. The investigation led to tougher regulatory control over the way the cash-rich nightclubs do business within the casino industry.

Three former Pure hosts and the ex-head doorman also have pleaded guilty to filing false 2006 tax returns in the sweeping scheme.

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