Steve Miller is a former Las Vegas City Councilman. In 1991, the readers
of the Las Vegas Review Journal voted him the "Most Effective Public
Official" in Southern Nevada. Visit his
website at: http://www.SteveMiller4LasVegas.com
sealed bids on Crazy Horse Too
debts to go unpaid if bids come up short
Rizzolo suspected of backing highest bid to keep
his ex from being prosecuted for hiding assets
INSIDE VEGAS by Steve Miller
October 15, 2007
VEGAS - The U.S. Department of Justice has given potential buyers of
the shuttered Crazy Horse Too topless bar until 5 PM, Thursday October
25 to make unpriced sealed bid cash offers for the building and 2.65
acre property. The winning bidder will then have until December 31,
close escrow on the purchase.
Because the City of Las Vegas revoked its liquor license on July 1, the
city gave 180 days from that date -- or until December 31 -- for an
approved buyer to
obtain a temporary liquor license and reopen the Crazy Horse Too, or according to CLV
19.16.030 (3): "If a non
conforming use of a conforming building is discontinued for a period of
one hundred eighty days.... the future use of such building shall be
only in conformance with the provisions of this Title."
The Crazy Horse was previously zoned as Industrial/Office Warehouse
only, and was operating as a topless bar under a grand fathered
Conditional Use Permit since 1986 that allowed it to be within 1,500
feet of another adult use (Cheetahs). If it stays dark for more than
180 days, the Use Permit permanently expires.
So the race is on!
As I reported in INSIDE
VEGAS on October 1, 2007, attorneys for ex-Crazy Horse owner Rick
Rizzolo filed a PETITION AND REQUEST FOR HEARING to try to convince the court that an
error had been made and the property was seized from the wrong entity.
The lawyers argued that the property actually belonged to RICRIZ LLC,
not Frederick John Rizzolo, and should be returned to its rightful
Federal Court Chief Judge Philip Pro made short order of the PETITION by denying a hearing and issuing
a simple Docket Correction from his chambers refilling the case under
Docket Correction to  MOTION for Hearing and Petition
and Request for Hearing by Ricriz, LLC re  Order, as to Power
Company, Inc., Frederick John Rizzolo: Filed under defendants name;
To be refilled under interested party name.
Now, to buy the shuttered "Horse" is like buying a pig in a poke.
your bid is accepted, there's no guarantee the City Council will issue
a temporary liquor license. In that case, if you paid more than
what a run down warehouse is worth -- estimated to be somewhere around
$5.5 million -- you could get stuck with an overpriced white elephant
and no liquor license unless you had inside information from the city,
and that would be a blatant violation of the State Open Meeting Law.
On September 1, 2007, Judge Pro STIPULATED that beating
Kirk Henry would be first in line to receive proceeds from the sale
the Crazy Horse Too real estate and building.
This put other creditors including the IRS and Security Pacific Bank in
the awkward position of having to go after the Rizzolo's personal
assets if the bids come up short.
Mayor Oscar Goodman has admitted several times to being Rick
Rizzolo's good friend. He once served as Rick's criminal defense
attorney, and his law firm has since profited heavily from Rizzolo's
referrals of dozens of criminal clients.
Only after I filed an ethics
complaint against him for voting to help his friend did Goodman
begin recusing on matters before the council that affected Rizzolo.
I believe Goodman would grant a quick liquor license to Mahmoud Ahmadinejad if it would protect
the personal assets of Rick and Lisa Rizzolo! Goodman is well known for
his loyalty to former clients. It
normally takes six
months for a new applicant to go through the investigative process to
obtain a liquor license with adult use, but in this case, the city is
prepared to treat any application like it's a matter of national
the event the bar is sold at a bargain basement price that only covers the obligation to
Henry but does not cover over
$5 million in back taxes and penalties along with a now-in default $5
million mortgage, Goodman may be reluctant to grant the bargain-seeking
buyer a temporary liquor license. He wouldn't want to insult Rizzolo.
However, if the buyer has secret connections to the imprisoned Rizzolo
-- possibly including Rizzolo's hidden financial backing -- Goodman is
expected to convince his weak council to license the applicant no
matter who he is as long as he pays off the taxes and mortgage, and
keeps Lisa Rizzolo from going to jail for hiding assets.
That of course could only happen if the Feds let down their guard.
The United States Department of Justice, District of Nevada
Tuesday, January 23, 2007
Additionally, defendants’ plea agreements require The Power
Company, Inc. to sell The Crazy Horse Too by June 1, 2007. The
Government has the right to disapprove the sale if the buyer is a close
relative or ongoing business partner of Rizzolo’s, is a felon, or has
business dealings with organized crime members or groups.
According to FBI sources, the Feds are only interested in assuring that
Kirk Henry's $9 million is paid. They could care less about Rizzolo's
personal debts to the IRS and bank saying the IRS and bank can recover
their money in future civil or criminal prosecution. That the LLCs and
trusts suspiciously formed after Kirk
Henry filed his attempted murder law suit -- trusts filed after Rick and Lisa Rizzolo's
hasty divorce, can easily be pierced to get the Rizzolo's three houses
that were heavily mortgaged in 2006 so Lisa could hide the cash; the
land under the Philadelphia
Crazy Horse Too; and their personal bank accounts -- collectively
amounting to more than enough to satisfy their debts.
along with a slew of Rizzolo's friends in casinos do not want the Feds
to come after Rizzolo's
family fortune to make up the difference. Rizzolo is a heavy gambler
known to lose up to $1 million per night on the crap tables. So anyone
who bids enough to pay off all of
his former client's debts will receive special treatment from the Mayor
and Jim DiFiore, the City Director of Business Activity who acts as his
(Rizzolo over paid $5.5
million for the property on March 22,
2002 as a means to oust his next door neighbor Buffalo Jim Barrier who was photographing beatings and other
crimes committed by Crazy Horse employees. Several of Barrier's photos
were used on NBC News. In 2007, the value of the property is near what
he paid, and Barrier is still there in his garage paying forty three
cents per square foot rent, making money, and taking pictures.)
Last week during a discussion about potentially taking all of Rizzolo's
personal assets to satisfy creditors, a law enforcement official
jokingly asked, "How will Rick survive if that happens?" I reminded him
that Rick is a "Whale" on the Strip and probably has millions in cash
hidden in the casino cages of the MGM and Palms -- something most
degenerate gamblers are known to do.
Sources say the legitimate bids will probably come up short of
Rizzolo's total obligation of around $19 million dollars. Anything over
$9 million will most likely be considered suspect unless every investor
is publicly disclosed, and few legitimate investors want their names
associated with over paying for a property with no guarantee they can
make it profitable without resorting to extortion, and after years of
horrible publicity based on Rizzolo's business practices. That being
the case, Lisa Rizzolo is expected to be asked to fully cooperate in
recovering the millions of dollars in real estate and annuities that
according to an FBI
Declaration she hid after her
divorce in the middle of the RICO investigation.
Just prior to their hasty divorce in 2005,
this photo was purposefully published showing Rizzolo and Rocco Lombardo at the MGM. It was
later revealed that Rizzolo paid each girl $1,000 to be photographed
with him in order to make it look like he was playing around and to
give his wife purported grounds for a divorce in the middle of the Federal
If Lisa Rizzolo refuses to voluntarily tell the Feds where her hidden
assets are stashed, or refuses to sign off on her LLCs, sources say she
may face criminal prosecution under 923
18 U.S.C. § 371 -- Conspiracy to Defraud the United States.
Nevada is a community property state. All the assets she hid were
accumulated during a 19 year marriage and during the time crimes were
committed at the Crazy Horse Too.
How much is the Crazy Horse worth if it regains a liquor license? Keep
mind that its previous owners pleaded guilty to racketeering that
included padding credit card bills and threatening or beating patrons
who refused to sign. Therefore their claims of extraordinary profits
must be taken with a grain of salt -- unless the new operator plans on
resuming the extortion,
beatings, and tax evasion that made Rick and Lisa filthy rich.
Other club owners say that without the criminal activity, the place
won't be able to stand on its own against well established competition
with no criminal activity, so recent claims that it's worth $30 - $70
million are ridiculous.
the bar went dark, Rick Rizzolo's father Bart, sister Annette, and
brother Ralph were amazingly permitted to accompany U.S. Marshals and
potential buyers on at least three tours of the facility. During the
tours, the Rizzolo's reportedly bragged that their former operation
grossed as high as $14.5 million with a net of as high as $7 million in
a single year. However, they didn't mention that extortion,
and drug sales were included in their former business plan.
Last summer, even though the place was about to be seized, Bart Rizzolo
had it completely renovated as if he was sure his family would soon be
back in business.
Also not mentioned during the tours were the
unreported millions in cash bribes the Rizzolo's paid to transportation
drivers to divert customers to
the club -- bribes as high as $100 per passenger. (Currently, strip
bars are bribing limo, van, and taxi drivers $50 per head.) Since
the Rizzolos were the
first to up the ante from $5 to $20 in the late 90s, then to
continue increasing the bribes until they reached $100 just before the
Crazy Horse closed, greedy drivers are expected to swarm the new
he doesn't pay up, they'll divert
passengers to his more generous competitors -- a racket long
overlooked by state and local authorities.
In other words, it will be very difficult for any new operator to rake
in the millions once gleaned by the Rizzolo's and their band of thieves.
In addition to the transportation driver's bribes, there are several
other factors any interested buyer should take into consideration.
Factors such as a sinking foundation, cracked walls, toxic waste,
vibration, and a possible eminent domain taking must be included in all
disclosures according to state law.
Next door neighbor Buffalo Jim Barrier reports that his garage has been
sinking since early 2006. He had an engineer assess the damage and
discovered a water main had been leaking under the foundation of the
building for several years creating a large cavern. This type of damage
under a concrete slab requires major structural repair costing hundreds
of thousands of dollars and requiring temporary closure of the
City building officials last week told INSIDE VEGAS that several
expansions on the property were not signed off by electrical,
mechanical, and plumbing inspectors. Nor did the building meet city
parking requirements when it was politically allowed to expand by 6,000
square feet in 1999 without
a parking and traffic study. These are all issues that will have to
be addressed by the new owner according to a veteran building inspector
who promised to take action after the first of the year.
The property's adjacency to the rail road tracks revealed over 75 years
of toxic waste spills absorbed by the soil behind the back row of
warehouses. The building's proximity to the U.P. tracks and Sahara
overpass indicate ground vibration limiting the height of future
development on the site.
Then there's the threat of eminent domain for a road
widening referred to on January 30, 2003 in
Vegas Mercury when Rizzolo said the Nevada Department of
Transportation needed to raze the entire building. The latest figures
show the state taking a 23 foot deep swath of the property's 142 foot
frontage eliminating the main entrance to the Crazy Horse and forcing
it to be replaced in the ally behind the building.
But that didn't dampen the
enthusiasm of one purported bidder. David Lannon and
K. Michael Kinses of The
Mortgage Broker, Inc. located in Rizzolo's home town of Anaheim,
California paid several visits to Barrier's Allstate Auto. They
reportedly told him they had the purchase in the bag for $31.5 million!
They also told Barrier that the bar was worth $70 million! This flies
in the face of the Department of Justice who wants to keep a lid on who
is bidding, and how much is being bid.
A confidentiality agreement required of all legitimate bidders clearly states:
"No Disclosure: Accepting Parties shall not (i) disclose the fact that
discussions or negotiations are taking place concerning the possible
acquisition of the property by Registered Potential Purchaser or any of
the terms thereof, or (ii) conduct any discussions, negotiations or
make any inquiries concerning the possible acquisition of the Property
with any other person or entity (including tenants) except for Owner
and Listing Broker."
Not only did
their visits to tenant Barrier violate confidentiality, it speaks
volumes about there being a possible new straw man about to buy the
Crazy Horse Too.
Real estate experts repeatedly say the property is worth no more than
$5.5 million without a liquor license. The Feds say they are only
interested in getting $9 million to cover the ongoing medical expenses
of the Henry family. So why would anyone want to pay $31.5 million not
knowing with certainty if they would be granted a liquor license by the
City? Maybe it's because they're assured they'll get the license if
they agree to relieve Lisa Rizzolo from the threat of federal
prosecution by paying her legal obligations to the Henrys, IRS, and
Expediting a new liquor license for another straw man before December
31 is the least Mayor Goodman can do to repay Rizzolo, et. al. for
making him a rich and famous criminal defense lawyer. Goodman worked
behind the scenes to help another
straw man get a temporary license to operate (skim) the Crazy Horse
back in 2006. After welching on his payroll taxes and health insurance
premiums, the straw man probably was able to share at least $10 million
cash with Rizzolo before his temporary license expired in June, 2007.
I don't think it matters what a new straw man offers for the strip
club. All moneys paid over those owed to the Henry's, IRS, and bank
will probably be returned to Rizzolo or whoever else is backing the
scam. Meanwhile, if the Feds lose interest, the mayor will let the
new/old operator resume all the criminal activities the old Crazy Horse
Too became infamous for.
Federal authorities should look at ridiculously high offers through a
microscope because if Rick Rizzolo is the silent backer, it would be
worth his while to guarantee his wife will not face criminal
prosecution and asset seizure. Later, his family could be hired as
employees by the new operator and resume control of the criminal
enterprise in his stead.
Rizzolo can accomplish this by putting cash into a Nevada LLC that does
not legally have to reveal its investors. Then his Disneyland pals can
buy the bar, hire Rizzolo's son Dominic, daughter Monica, dad Bart,
Mickey Mouse, and his sister Annette Rizzolo (not Annette Funicello) to run the place just like in the bloody
a local poker player told me "Rizzolo overplayed his hand" when he
divorced his wife in the middle of the investigation. The Feds now can
anticipate his moves and raise red flags if offers come in that are
exaggerated too far above the property's worth. The Feds may gladly
accept $9 million from someone who is clean, but higher bids should be
carefully scrutinized in what little time is left.
The local hard money lender Vestin Mortgage should also raise
red flags. Vestin has a major investor named John
E. Dawson, the same John E. Dawson who is the asset protection
lawyer who was hired by the Rizzolos to hide their assets in 2006 while
his brother U.S. Federal Court Judge Kent Dawson presided over the
trials and sentencing of 16 former Crazy Horse goons. Judge Dawson did
not reveal that his brother was working for the Rizzolos when he gave
Rizzolo's former employees slaps on the wrist. Judge Dawson is
scheduled on October 15 to preside over a trial involving a Vestin
investor. He did not recuse when this was recently brought to his
I suggest if Vestin Mortgage is listed as an institution financing any
Crazy Horse Too bidder, the Feds should pay particularly close
attention based on John Dawson's connection to Vestin and Rizzolo. The
Dawson family owns over a million dollars worth of shares in Vestin.
Vestin accepts LLCs as investors, and the partners need not be
identified according to state law -- a perfect cover up for Rizzolo.
The Judge also didn't reveal that his brother became the Rizzolo's
corporate agent during the time of the trials.
All names of investors must be made public before the Crazy Horse sale
With so much being hidden from the public, and if the Feds let down
their guard, Rizzolo could easily slip back into the mix and have the
last laugh as his family regains control of the strip joint.
Buffalo Jim Barrier will be watching every move a new operator may
make. Barrier still has two years left on his iron clad 30 year lease.
As he did in the past, Barrier pledges to monitor and photograph any
suspicious activity at his neighboring business, especially the comings
and goings of persons associated with Rizzolo or the mob.
"I'm gonna be on them at all times. Any new operator with shady ties
will have a microscope up his ass, and I'll give my pictures to INSIDE
VEGAS and the FBI within minutes of any mobster coming on the
property," stated Barrier.
the place sells for less than $19 million, Security Pacific Bank
will probably have a foot race with the IRS to file legal actions
against Lisa Rizzolo.
This could also prove to be a big embarrassment to former LV Mayor Jan
Jones who as a past Director of Security Pacific and a major
stockholder may have helped her Newport Beach neighbor and crony obtain
his breached loan.
Security Pacific is not located in Nevada and may not have been aware
of Rizzolo's well publicized troubles in
October 2005 when
took them for $5 million cash. They probably took someone's word
for Rizzolo's credit.
This sordid story should finally come to an end by New Years Eve. Or a
new chapter may begin if "Mr. Clean
Face" is about to take over the Crazy Horse Too. Will the Department of
Justice get fed up and let the time elapse then auction the place as
warehouse property in January, give the proceeds to the Henrys, then go
after Lisa Rizzolo for the balance?
I bet if she was charged with Conspiracy
to Defraud the United States, the money would magically appear the
© Steve Miller
Editor's note: The
author is currently writing a book about the mob's battle to keep the Crazy Horse open.
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