Former Crazy Horse Too owner loses appeal

Former strip club owner Rick Rizzolo lost his bid Tuesday to overturn a nine-month prison sentence for violating the terms of his 2008 supervised release.

A three-judge panel of the San Francisco-based 9th U.S. Circuit Court of Appeals issued a written decision upholding the sentence handed down by Senior U.S. District Judge Philip Pro, who had concluded Rizzolo deceived his probation officers.

The violations occurred after the former Crazy Horse Too operator, long suspected of having ties to organized crime, had served 10 months of a one-year prison sentence for a felony tax conviction.

In its four-page decision Tuesday, the appeals panel found that Pro did not abuse his discretion and noted that Rizzolo's lawyers did not challenge the judge's findings that he had committed the violations of his probation.

"Even if the district court did abuse its discretion, Rizzolo suffered no prejudice from this error," the appeals panel wrote.

Rizzolo, who surrendered to federal prison officials on Sept. 14, expects to be released soon to a halfway house in Las Vegas to finish his prison time. After his release, he will have to undergo two more years of supervised release.

Federal prosecutors sought the extra prison time, alleging Rizzolo was living a wealthy lifestyle while on probation, using funds he hid from authorities. At the same time, prosecutors argued, Rizzolo was failing to pay millions of dollars in restitution to Kirk Henry, a Kansas City-area tourist crippled in a fight outside the Crazy Horse Too in September 2001.

Prosecutors contended last year that Rizzolo had concealed from probation officers lucrative financial transactions, including several with offshore trust accounts. Many of the transactions were related to $1 million from the sale of a Philadelphia strip club one day before his 2008 release.

The U.S. Marshals Service took control of the now-shuttered Crazy Horse Too more than four years ago but could not find a buyer . In July, Canico Capital Group, the Southern California investment firm that owns the property's first deed of trust, bought the club and its property for $3 million at a public auction.

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