- Associated Press
Friday, June 9, 2017

LAS VEGAS (AP) - The ex-owner of a strip club in Las Vegas where a Kansas tourist was beaten and left paralyzed by employees in 2001 has again pleaded guilty in federal court to a felony tax evasion charge.

Former Crazy Horse Too owner Frederick “Rick” Rizzolo’s attorney, Richard Tanasi, declined Friday to comment on a plea deal reached Thursday.

Rizzolo, 58, could face two years in prison and restitution payments of about $2.6 million to the Internal Revenue Service, if Chief U.S. District Judge Gloria Navarro accepts the agreement, federal prosecutors said.

Rizzolo acknowledged avoiding payment of more than $1.7 million in taxes from 2000 to 2002 by paying employees in cash, failing to keep accurate records, and underreporting wages paid.

The plea marked the second time in 11 years the former owner of the white-pillared, Roman-themed club just off the Las Vegas Strip has pleaded guilty to federal crimes.

In 2006, Rizzolo pleaded guilty to conspiring to defraud the government and was sentenced to a year and a day in prison.

The club, under the corporate name The Power Company Inc., pleaded guilty at the same time to racketeering. The plea acknowledged that employees padded customers’ bills and used force to compel payment of disputed charges.

That plea deal ended a decade-long federal probe of whether the club was tied to the mob.

Rizzolo agreed not to contest almost $17 million in fines, forfeitures and restitution to be paid by the club, which he was required to sell.

Kirk Henry, the Olathe, Kansas, man whose neck was broken by club employees in a dispute over an $80 bar tab, was to have received $10 million in restitution under the arrangement. Henry died this year with some $8.8 million still owed.

Prosecutors alleged that after pleading guilty, Rizzolo concealed assets and income with methods including directing $900,000 from the sale of the club to an offshore bank account; falsely stating that he had no income or assets and no ability to pay taxes owed; and withdrawing $50,000 from a bank account by writing a check to another person who then directed the money back to Rizzolo to keep it from being seized.

The maximum sentence for the tax evasion conviction is five years. Rizzolo can withdraw his plea if Navarro rejects the deal. Sentencing is scheduled Sept. 15.

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