By Steve Miller, AmericanMafia.com
Thursday, January 4, 2007
New RICO lawsuit claims Rick Rizzolo still runs the Crazy Horse. A Federal Court Judge may throw the book at him and put the building and land on the auction block after three buyouts were squelched in favor of a straw man with no money.
LAS VEGAS - It always amazes me when a big storyhits just days before Christmas. I've come to the conclusionthat scammers use this time to try to pull fast ones becausereporters and honest public servants are usually onvacation and don't want to pay much attention to negative stuff thistime of year.
My untimely story asks the question -- What's the value of a mob runtopless bar in the seediest part of Las Vegas? Is it worth an amazing $40 to $48million after its owner and sixteen employees were convicted of racketeering, and beating upcustomers who refused to pay inflated credit card tabs? A brand newFederal RICO law suit really opened a can of worms the week beforeChristmas.
The law suit begs the question -- Are the same La Cosa Nostra folks whoRickRizzolo fronts for the ones now backing one or more investors whowant to buy his broken down topless bar? And do the men who representthe investors know who their investors really are?
Former Crazy Horse boss Vinney Faraci is the son of "Johnny Green" Faraci, a notorious Bonanno family capo. New York organized crime experts have said Vinny is a madeguy.
And then there's former Crazy Horse boss RoccoLombardo, the brother of Chicago outfit boss Joey"The Clown" Lombardo.
It's no mere coincidence that upstanding citizens like this want tocontinue running the Crazy Horse Too. Therefore, any buyer who comesforward should receive a complete background check to see if he isbeing used as a "Mr. Clean Face" for such interests with or without hisknowledge.
The method they use is called a "Daisy Train." It means that the sameguys that now own the Crazy Horse pretend to be investors in a newgroup and get an unsuspecting, or complicit general partner to make theoffer on their behalf without having to disclose their involvement. InNevada, this can be done through a Limited Liability Corporation thatdoes not have to reveal names of investors.
Rizzolo keeps bragging he's not going to prison in January, andto prove his point, he's repeatedly seen partying and gambling on theStrip while he awaits his protracted sentencing hearing. Rizzolo may be right because he's a "whale," a term that means milliondollar player. Whales are a protected species in Vegas, and Rizzolo hasconnections all the way to Washington D.C. that may be running legaland political interference for him. If he goes to prison, the goosestops laying golden eggs, and that doesn't go over well with casinooperators, especially those with deep pockets regularly tapped forcampaign contributions during national elections.
To give you an idea of howridiculous the Crazy Horse purchase offers have become, when New Yorkbased Scores bought the brand new 25,000 square footJaguars Gentleman's Club in February 2006 for $25 million, no onequestioned the price tag.
The building was less than two years old and located near a majorintersection on Desert Inn Road in a better part of town. The onlydifference was that the seller, Jack Galardi, did not have hiddenpartners or a reputation for crippling or killinghis customers.
Now there's an inexplicablefeeding frenzy over the leastattractive topless bar in Sin City -- the blood soaked Crazy Horse Too.Why, when the latest $45 to $48 million supposedly being bid could buyjust about any other club in town -- one with a permanent liquorlicense, better location, and a clean reputation?
I smell a fish, or could it be a daisy?
Is there a ruse underway to artificially inflate the Crazy Horse'svalue to discourage the Federal Court from putting it intoreceivership? Or is the exaggerated value being used to convince theCity Council and Federal Court that it's too valuable to shut down, andto let it stay open to continue its M.O. of drug sales, prostitution,and extortion?
Either way, the huge amount of money now being offered for the CrazyHorse may involve a daisy chain of present owners who -- on paper --can offer and pay any amount to stay active in their criminalenterprise because the price doesn't matter when cash is not intendedto change hands. The only thing that would change is the name of thefront man, and he probably doesn't even know who his investors reallyare!
In the real world, the Crazy Horse building and real estate is worthmore in the neighborhood of $10 million, and that's a very generousestimate. Unfortunately, if the place sold for market value it could not coverall the debts Rick Rizzolo has incurred including legal fees owed totwo of our town's most prominent attorneys who represented beatingvictim KirkHenry.
This might be the real reason public officials are allowing one of thebiggest scams in Vegas history to go on and on and on. Attorneys DonaldCampbell and Stan Hunterton want to get paid for the great job they didfor Henry who's family has devastating medical bills, and it would taketoo long to seize and liquidate Rizzolo's personal assets to pay theirfee, the Henrys, and the IRS - total $17 million. Therefore thesale of the club got the nod in Federal Court to facilitate thequickest relief of debt.
Knowing this, Rizzolo conveniently divorced his wife and transferredall his assets to her during the Federal investigation. However thecourt can reverse this transparent legal ploy in the event the clubdoes not bring enough money through a sale. LisaRizzolo, Rick's ex, is suspected of harboring much more money thanneeded to settle her former husband's obligations. But this couldinvolve lengthy litigation, so the quick fix was chosen: sell the CrazyHorse ASAP, but don't look too closely at the buyer.
How can this happen? Remember, this is the town that repeatedly electsa former (?) mob lawyer as its' mayor, and Mayor Oscar Goodman has closeties to Rizzolo and several of his associates.
Everyone in town wants Kirk Henry to get the ten million Rizzolopromised him (and his lawyers), but no public official has the guts torequire casinos to open the safe deposit boxes Rizzolo keeps incashier's cages up and down the Strip. Whales are known for keepingtheir cash in these boxes feeling it's safer than a bank, and away fromthe IRS and FBI's prying eyes.
It's obvious Rizzolo, 47, has no intention of paying his monetarydebts, or his debt to society for that matter. His attorneys also pleadthat his current health won't allow him toserve prison time -- that's if he's reallysick? But he continues burningthe candle at both ends. More on that later.
A reliable source told me that Rizzolo has struck a deal with hisbuddies at City Hall to give him an extraordinary $7 million for a 23foot deep slice expected to be taken by eminent domain from the frontof his property for a road widening. That's an outrageous price for asliver of Industrial Road frontage. The ridiculously high purchaseoffers by supposed buyers may have inspired such an over evaluation bythe City Public Works Department, or it might just have been a nod fromthe Mayor that inspired the $7 mil. Nonetheless, the taxpayers couldtake it in the shorts if nobody pays attention.
The 26,000 square foot Crazy Horse is located amid a tangle of powerandtelephone lines on 2.65 acres next to a noisy overpass and the UnionPacific main line. Recentsoils tests indicate that vibration from passing trains would limit theheight of any new structure to a few stories, and then there's theeminent domain threat that could reduce the acreage. Under thesecircumstances, how can anyone reasonably offer $45 - 48 million?
To his dismay, Rizzolo alsohas three years remaining on a 43 cent per square footlease to a funky auto garage located right next to his club's mainentrance. The garage is owned by stubborn ex-pro wrestler BuffaloJim Barrier whohas become a local folkhero for refusing to move in the midst ofthreats and harassment from his landlord Rizzolo who wants to expandinto his space.
Barrier is so popular that the LasVegas Review Journal just hired him as a columnist. Whoever buys the Crazy Horse automatically inherits the garage and itsburly owner until his lease expires in 2009 whether they like it or not.
And to add insult toinjury, the Crazy Horse has a billboard overhead advertising acompetitive nearby gentleman's club! It just seems Rick Rizzolo can't get no respect.
So why would anyone want to buy such a place for so much, especiallywhen it'soperating under a temporary liquor license?
Last June, U.S. Federal Court Chief Judge Philip Pro ordered the CrazyHorse be sold by June 2007, or a receiver would be placed to liquidatethe building and property. Meanwhile, without requiring a financial statement, last October the Las Vegas CityCouncil granted a six month temporary liquor license to a man who hasgone bankrupt twice in fifteen years and was found financiallyunqualified topurchase the Riviera Hotel.
With this background, Mike Signorelli was described to the City Councilas a successful gaming entrepreneur whowas about to purchase a Strip hotel after successfully building andoperating a casino resort in Mesquite. The Council asked no questions,and nothing was volunteered regarding the Mesquite casino'sbankruptcy and subsequent class action law suit claiming Signorellistole healthinsurance premiums from his employees. Also, no information waspresented about the Riviera discarding Signorelli's unsubstantiatedoffer.
Signorelli's only qualification was that he owns a steak house where heand Rizzolo have been seen drinking together for many years. But hisattorney told the Council that the two men had only known each otherfor two weeks.
The Council members just sat there looking dumb while being lied to. Then, as if guided by an invisible hand, the Council seemed todutifully vote to grant thelicense with a stipulation no member of the Rizzolo family stepfoot on the property. No one asked Signorelli to prove the origin ofthe $400,000 a month rent he purportedly agreed to pay, or the $45million he said he offered for the club. The Council became a laughingstock over their acceptance of Signorelli's less than provable worthand refusal to identify backers.
The Council would probably have reacted the same to any other applicantwho stepped up to the podium with the City's Director of BusinessActivity by his side. Ask no questions about partners or financialbackers -- require no financial statement -- just take the word ofBusiness License Director Jim DiFiore that the applicant standing next to him is qualified.
Soon after he re-opened the shuttered bar, Signorelliwas brought back before the Council to prove the accuracy of suspicionshe was a straw man.
Buffalo Jim Barrier informedthe Council there were three members of Rizzolo's immediatefamily working in the bar as key employees in violation of City Counciland court orders. When askedat a specialCouncil hearing to explain why they were still employed, Signorellinervously claimed he did not know that hisgeneral manager, assistant manager, and bookkeeper's last names wereRizzolo -- and theCouncil bought his story!
However, they did timidly ask him to remove all remaining Rizzolos fromhis payroll and keep them off the property. He agreed, but thatdidn't stop Annette Rizzolo from immediately violating the Council'sorder by sending garage owner Barrier a notice she signed as property manager.
During the past two years,three other buyers were rejected byRizzolo, but only one had verifiable personal assets. He told INSIDEVEGAS that conditions were placed on him that he must employ formerCrazy Horse bosses, or his offer would be rejected. In last week's Federal RICOlawsuit, the plaintiff describes Rizzolo telling him thatSignorelli has no money and has never paid a cent in rent, and thatRizzolo never intended to get paid by Signorelli. The plaintiffalso said he was asked to joint venture with Rizzolo and Signorelli,and employ persons of their choosing.
Because Rizzolo is no longer allowed near an adult business, the buyerrejected the illegal offer and filed his suit against Rizzolo andSignorelli for trying to defraud him.
The law suit is part of the public record so it will now be interestingto see if the City Council requires Signorelli toproduce canceled rent checks when they bring him back fora scheduled three month review in January. It will also be interestingto see if Judge Pro throws the book at Rizzolo for contempt of court,and puts the Crazy Horse on the auction block like he should have donelast June?
At auction, the Feds can scrutinize the buyer and his backers, and it'scertain the price will be much less than what's currently on the table.If any of the current bidders are for real, this should be veryinspiring and they should be shouting for immediate liquidation insteadof increasing their bids to the current Mob owners.
The first rejected bid occurred in 2005 when San Francisco based realestatedeveloper LukeBrugnara offered Rizzolo $40 million. The secondcame from StuartCadwell, co-owner of Spearmint Rhino. Cadwell purportedlyoffered $45 million for the club, but he disappeared when it wasrevealed his business partner was a felon -- something the FederalCourt forbid.
In the meantime, the asking price of the club kept skyrocketing eventhough not one cent changed hands -- similar to insider trading on WallStreet.
Nowa Miami based businessman is suing Rizzolo and Signorelli for allegedlybreaching a $48 million buy out after Rizzolo reportedly signed apurchaseagreement.
Here's a linkto his fascinating 19 page lawsuit filed Friday, December 15, 2006. In the suit, Plaintiff TommyKaras accuses Rizzolo and Signorelli of plotting to squelch hisdeal if he didn't agree to include Rizzolo as a silent partner. This,if true, would indicate Rizzolo is thumbing his nose at Judge Pro'sorder he never be associated with the topless bar industry for the restof his life.
Therefore the contempt of court possibility coming weeks before Rizzolois scheduled to be sentencedon January 16. Not a wise move on Rizzolo's part! When the supposed feeding frenzy began, real estate experts and otherclub owners (I must disclose that I am the landlord of Club Paradise)were shocked at the numbers. It's well known locally that anyone couldbuy a much better, larger piece of land and build a palace for halfwhat's been offered for the Crazy Horse.
Treasures is a palace. Built in 2004 amid heavy opposition from Rizzoloand his sycophants at City Hall, the 25,000 square foot club cost $30million. It's in a superior location nearer the Strip, andincludes a gourmet restaurant and art collection. But soon after its'completion, DiFiore was there citing dancers for alleged acts ofprostitution. None were convicted, but he asked that the club be closednonetheless. The owners sued the City and soon re-opened.
The interior of the Crazy Horse was described as a "toilet" by severalFBI agents who raidedthe place in February 2003. "You should have seen it when the lightswent on. It was filthy," one agent told INSIDE VEGAS. "They sprayperfume to cover the stench."
In response to the Karas law suit, Jeff German, senior investigativereporter for the Las Vegas SUN,wrote," Justweeks before his sentencing on tax evasion charges, Crazy Horse Toolandlord Rick Rizzolo has been hit with a federal lawsuit charging thathis leasing of the topless club to restaurateur Mike Signorelli is aruse designed to allow Rizzolo to continue calling the shots."
In a follow up article on December 22, German reported,"Concerned over allegations they may have been duped into agreeing to adeal that conceals the true ownership of a popular topless club, LasVegas City Council members said Thursday that the charges could promptthem to reconsider their decision."
But German left one question unanswered: Why would anyone in theirright mind pay $45 or $48 million for a "toilet?" Rizzolo boughtthe building and land from his former landlady RenataSchiff for $5.5 million in 2002, and he was criticized for overpaying at the time. What's happened since to raise the ante? The buyer's feeding frenzyinspired me last Friday to send this e-mail to each member of the CityCouncil:
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This story has stolen a day from myown holiday, and I kind of regret having to tell it during this specialseason. I hope hearing about Las Vegas' dark side during the Holidaysdoesn't bum you out. If so, I apologize. But there is so much more!
In the end, "Operation Crazy Horse," as the FBI refers to it, couldincriminate our Mayor, a formerCouncilman, and a NevadaSupreme Court Judge. I sure hope what I'm telling you is justthe tip of the iceberg because Las Vegas deserves much more on the partof the Feds.
It's unfortunate, but in past years investigations such as this werecut short by ambitious FBI agents and Federal Prosecutors who learnedthey could gain lucretive positions working for Strip casinos if theybacked off. Some did and are now employed on the Strip. Remember, nocasino owner wants to kill a whale.
Have a great New Year! And it you're a straw man reading this column , don't get too close to those Christmascandles.
PS: Rick Rizzolo's attorney has told the judge his client was too sickto attend his sentencing. This excuse has gotten the sentencingpostponed on two occasions and let the convicted felon binge throughthe Holidays. Last week at his regular Monday night party at Piero's,Rizzolo told several sources that Steve Miller was lying in thesecolumns by saying he's sick. He put it this way, "Tell that lying M - -- - - F - - - - - I'm not sick!"
OK, I stand corrected. Now tell the judge....
Copyright Steve Miller
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