IRS cracks down on Las Vegas strip clubs bribing transportation drivers

IRS cracks down on strip clubs bribing transportation drivers Club owners agree to drop pay offs down to $30 per passenger. The owners of Sapphire Gentleman's Club lead the way by convincing all other club owners to standardize pay outs.

---

After being extorted for up to $130 per passenger delivered, local strip clubs led by the owners of Sapphire, today agreed in a unanimous vote to stop paying over $100 to limo and taxi drivers for the delivery of club patrons. The practice led to some clubs and businesses being boycotted in the event owners refused to pay the bribes. The illegal practice became so out of hand recently that some tourists reported that they were paid $30 each by certain drivers to ride in their limousines or cabs on the condition the passengers agreed to go to the destination of the driver's choice. The destinations chosen by the drivers were known to be paying up to $130 per passenger, making it possible for the divers to absorb the fare and still have enough left over to pay the passengers for riding in their cabs. With Las Vegas setting the example, the problem has begun spreading to other cities.(See:"Town car dispute leads to fine - City cites Westin Hotel for letting valets choose town cars over taxis." The Portland Tribune,) The extortion practice in Las Vegas caught the attention of the Criminal Division of the Internal Revenue Service that launched an undercover investigation last summer. Through the government's efforts, the business owners who paid the bribes are now known, and may face criminal prosecution. The SUMMONS (below) is just one of dozens issued to adult business owners, and is credited with inspiring the standardizing of the pay outs. However, because so much unreported cash changed hands amounting to millions per year per participating strip club, the government is actively seeking more information on the practice. Based on the government's interest and possible prosecution of some business owners, the cash transactions may be curtailed permanently because most of the money paid out has gone unreported. In past investigations, the Nevada Transportation Services Administration, and Nevada Taxi Authority did nothing. However, because many of the businesses participating in the illegal pay offs hold privileged business licenses, the City of Las Vegas, and Clark County governments were asked to temporarily suspend the liquor or business licenses of offending businesses. Both the city and county governments also refused to participate in stopping the pay off practice even though many tourist's complaints had been registered. Our city was getting a nightly black eye when visitors were being over ripped off by businesses that had to raise their prices so they could cover the cost of the bribes. This is not the first time local businesses have unanimously agreed to stop or limit the pay offs. However, this is the first time the IRS has stepped in to enforce our nation's tax laws. With the IRS closely monitoring each and every club owner to see if the pay offs return, it is doubtful any owners will break rank and again try to out bid their competition. - SM MORE INFORMATION: