One of the less licentious elements of the drug-and-prostitution-riddled federal racketeering indictment of CLS Nevada limousine service CEO Charlie Horky and eight others is the relatively tame-sounding alleged fraud perpetrated against American Express.
The credit card giant and its customers claim losses of $2.8 million through unauthorized charges by CLS in connection to the ring run out of the company’s front office and limos. (Horky also is accused of participating in a check-kiting scheme that totaled more than $2.4 million.)
Horky’s attorney, Richard Schonfeld, said he looks forward to defending the case. Frankly, I look forward to hearing the attorney explain some of Horky’s more colorful quotes that are highlighted in the indictment.
The idea that local limo company operators might have countenanced or even unofficially encouraged drivers to cater to their customers’ Vegas party fantasies should surprise no one who has lived here more than a few weeks. But when a major credit card company allegedly became victimized, a federal criminal investigation became inevitable.
The FBI doesn’t usually investigate simple cocaine-and-hooker schemes. (That sort of action is normally the purview of Metro’s vice, narcotics, and Intelligence sections.)
With a multibillion-dollar reputation at stake, the company surely didn’t want to be compelled to change its famous marketing signature to, “American Express: Don’t leave whores without it.”
While less sexy than the other charges, that alleged fraud activity poses the biggest threat to the freedom of the defendants. Witnesses come and go in prostitution-linked cases, but an established credit card paper trail is hard to beat.
The idea that Horky’s connections somehow don’t reach the corporate casino management level seems absurd. But in keeping with its policy the Gaming Control Board on Friday would not comment on whether it is looking into any potential regulatory issues associated with the CLS investigation. With so much CLS business conducted at the front door of major Strip casinos, state gaming should be all over this issue.
Call it an intriguing aside: In July, American Express sued Horky in district court alleging nonpayment of $404,759 and running an overdue balance due of $38,574. A call to the credit card company’s local counsel wasn’t returned.
Meanwhile, the connection of CLS to possible prostitution doesn’t surprise those following the criminal odyssey of Emmanouil “Manny” Varagiannis. He is the former Olympic Garden topless cabaret manager and one-time operator of the Midnight Entertainers escort service. Authorities consider Midnight Entertainers a front for prostitution.
Varagiannis has been charged with laundering $1.8 million in escort service profits in a case brought by the U.S. Attorney’s office and IRS Criminal Investigation.
Varagiannis has direct ties to CLS, according to documents I’ve obtained. As local manager of Vegas Tens LLC, Varagiannis entered into a services contract in October 2010 with CLS Nevada that called for limo drivers to steer customers to select adult-oriented businesses in exchange for several hundred thousand dollars.
Considering Midnight Manny is suspected of being in the whores-to-your-door business, and Horky is now accused of implementing those services as part of the marketing of his limousine operation, I’m guessing Varagiannis might know something about the way CLS operates behind the scenes.
After all, it’s not as if it’s a shock that local limo drivers have been providing such services to casino customers. The Las Vegas gaming scene for generations has danced in and out of shadows when it comes to feeding customers’ hedonistic desires.
In a move that surely does surprise some local hustlers, a judge approved an agreement between prosecutors and defense attorneys that actually allows Horky to continue to operate the limousine service – minus the hookers and blow – while his case proceeds through the system.
That’s right. The alleged mastermind of the mobile brothel and Colombian pharmacy gets to keep his day job.
Sorry, lowly, lonesome ladies of the evening.
You’ll have to find another ride to work.
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