Allegations in lawsuit lay bare dirty laundry involving strip clubs

A nude cabaret seems like an odd place to start a war.

For one thing, it must be difficult to maintain discipline in the ranks when your soldiers refuse to wear uniforms.

But a war is precisely what’s being waged these days after attorney Neil Beller, on behalf of club owner and porn king Harry Mohney, filed a lawsuit in District Court alleging a string of rivals have conspired with cabdrivers to divert customers from the Little Darlings and Déjá vu Showgirls. With many millions at stake in the local skin business, there’s plenty to fight about.

The battle isn’t new. Some years ago Pete Eliades of Olympic Garden pursued a similar strategy when his rivals began tipping cabdrivers $20, $30 and even $50 for every delivered customer. The kickbacks ethics aside, drivers were encouraged to divert customers to clubs paying the most cash.

These days, hard times have hit the taxi trade. Drivers complain about the lack of business. A recessed economy only increases the temptation to divert customers, especially at $50 and even $70 per person.

The action has slowed considerably at many topless cabarets, too. Dancers can’t earn a living without a steady flow of cash customers and credit card cowboys.

In addition to tipping drivers for delivering customers, some savvy club operators have taken to giving drivers free-drink coupons as deal sweeteners for passengers. Other drivers have worked deals with club managers to charge customers less at the door in order to close a deal, adult industry sources say.

The cash-oriented interplay between some front-door personnel at Strip resorts and limousine drivers working to hustle customers to select topless clubs is another plot twist. The back scratching never ends, and all participants — except the folks at the Internal Revenue Service — stand to gain from the exchange.

But you’d think the combination of willing drivers hustling willing customers to willing women would be pretty close to foolproof. Turns out it’s more complicated than that.

When Little Darlings and Déjá vu Showgirls didn’t keep pace with increases in the kickback scheme, I mean taxi-based freelance marketing program, management saw its customer flow decline sharply. Private investigators hired by the club discovered a contributing factor: Customers were being encouraged by cabdrivers to go elsewhere.

“Nobody goes there,” one driver said. The dancers were “old hogs” and “chicks with bullet wounds.”

Personally, I’ve always thought a bullet wound adds character. But I digress.

(As an aside, I asked management for a stipend to spend in order to inspect the women at the clubs to determine whether the criticism was justified, but the request was denied. And editors wonder why there’s so little investigative reporting being done these days.)

Another driver told the undercover investigator that Little Darlings was “a dump.” “You’ll have a much better time (at Treasures).” And “Treasures and Sheri’s are much higher-class joints.”

They also paid cabdrivers for the customers they delivered.

In all, a dozen topless clubs are named as defendants in the civil complaint, which alleges intentional interference with prospective economic advantage, negligent interference, negligence and conspiracy, and seeks injunctive relief. Beller added a twist to his legal strategy when he filed a voluminous complaint with the state Taxicab Authority against 11 local cab companies, alleging a general conspiracy among the drivers to divert customers from Déjá vu Showgirls and Little Darlings. That complaint asserts the taxicab companies “are liable for the actions of its agents and employees.”

Drivers aren’t allowed to accept a gratuity of any kind in exchange for diverting customers from one business to another. Whether club managers openly encourage drivers to divert customers isn’t clear from the lawsuit’s exhibits.

It only makes sense that the clubs and cab companies accused of collusion will want to downplay the lawsuit and official complaint as sour grapes from a foundering competitor, but the presence of the private investigators’ findings is sure to give Beller room to argue. The reported comments of the drivers, as catalogued by the investigators of Orilio & Associates, only serve to give weight to the presence of a palm-to-palm system that finds clubs spending, by one educated estimate, more than $20 million a year to hustle taxi customers.

The first shot has been fired.

The latest taxi-topless war has begun.

John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith/.