Sin City Cabbie Conspiracy Worsens
The tail is wagging the dog with government help!

INSIDE VEGAS by Steve Miller
AmericanMafia.com
October 24, 2005

"We've taken in excess of 50 rides, and one out of five rides that we take, we offered the opportunity for the driver, and they attempted or diverted us to a specific location." -  Former Nevada Taxi Authority (TA) Administrator John Plunkett

LAS VEGAS - Strip clubs in Sin City are currently the target of the biggest extortion racket since the Mafia supposedly left our town. The operators of lucrative adult businesses are being forced to pay cab drivers up to $70 per passenger for delivering customers to their door, or suffer being boycotted. The racket, according to insiders, is costing some clubs up to $100,000 per night in unreported cash, amounting to an estimated $500,000 per day to transportation people being paid by the combined clubs in town!

This does not include the unreported money paid out by massage parlors, escort services, swingers clubs, check cashing services, wedding chapels, restaurants, or bordellos.



 Cabbies block Strip to protest payoff law
          R. Marsh Starks / LAS VEGAS SUN

One prominent gentleman's club owner told INSIDE VEGAS: "The biggest losers in this mess are the tourists and conventioneers who have to pay door and drink prices that are 3 times what they were a couple of years ago before this got out of hand. Also many tourists are diverted to strip clubs when they ask to be taken to a regular nightclub. We get guests all night long that were told we were a dance club, disco, or singles bar. We even get some guys who are dropped off after asking to go to a gay bar. The cabbies hope to get paid before the guest finds out he's been tricked. It makes for many unhappy out of towners who are beginning to see everything about Las Vegas as being a rip off. It surprises me that the powers that be aren't more concerned about the long term impact on 'good will.' This is a city that relies on repeat business. For years people might leave town feeling a little depressed that they lost money at the tables, but at least felt they were treated like royalty, and overall were really entertained. Now they leave just feeling abused and cheated."

Those allowing the scam are the governor, state taxi authority, Clark County Commission, LV City Council, city attorney, and district attorney who are threatened with the loss of political campaign contributions from cab company owners and some strip club operators if they enforce laws already on the books. In certain cases, sexual favors may also be curtailed if public officials act to stop the extortion, extortion that can easily spread to other type businesses.

Some cab company owners have secretly said they want the payoffs to continue so they don't have to pay their drivers a living wage, or benefits. Some unscrupulous club owners even want the authorities to continue turning their backs so they can gain advantage over their competitors by upping the ante and gouging their customers to make up the difference.

In 2004, a passenger caught a cab at McCarran Airport. He reportedly asked the driver to take him to a club owned by a life-long friend. The driver told him that that club was "filthy," and another one nearby would be a much better choice. The passenger insisted on going to his original location. He was then informed he would be dropped off at the nearest corner if he refused to go the club the driver suggested. The passenger was taken into a seedy neighborhood in the middle of the night and ordered out of the cab. The driver refused to radio for another cab. The passenger told his club owner friend of the incident. The driver was reported to both the taxi authority and his employer. Its not known what consequences, if any, were suffered by the cabbie.

On any given night, the Industrial Road/Highland Drive corridor is crowded with hundreds of idling taxies sitting in front of strip clubs. In the meantime, the transportation needs of local residents and many tourists go unmet leaving locals waiting hours for a cab to the airport to catch a red eye.

In response to the complaints and extortion, desperate sounding Emails began circulating on a daily basis between club owners or managers telling of the frustration they are experiencing over the singling out of their businesses, and the government's total lack of enforcement of the existing laws.

Out of desperation, the club owners recently hired former Nevada Taxi Authority Administrator; former Clark County Commissioner; and former Las Vegas Convention and Visitors Authority Director Manny Cortez to try to straighten out the mess. After months of lobbying, even the once influential ex-politician was unable to inspire government action.

Then, on September 15, one strip club manager sent the following Email to his competitors:

"The Cab Ordinance (affecting all vehicles for hire) will not be completed and done until the end of October. Manny (Cortez) tried to get the authorities to 'enforce' laws as they exist (a while back they issued warnings to the county) but to no avail. They do not want to go in and take a bite of the apple, only to return for another bite of the apple. So, we are remaining in this situation until then. The State is not involved in this, and it is the City Council, the County Commission, the City Attorney, the DA's Office, the County Attorney, and Metro (police) that are all involved in the issue. As you know, the complaints are mounting relative to lack of cabs at the airport, long waits for cabs at the airports, lack of cabs at hotels for tourists, etc., which is working in our favor. If you all think a meeting is in order, I will be happy to arrange one."

The "bite of the apple" the Email writer was referring to was obviously the political campaign contributions, gifts, under the table cash, or sexual favors, some local politicians, and a few corrupt cops, have long accepted to leave some strip bars alone, especially the one the Email writer manages.

Shortly after this Email was sent, its friendly writer tried to call a meeting of all club owners, but he requested it take place at his biggest competitor's strip club (instead of his own) -- a dangerous place to meet for the owner of the hosting club -- something some other owners felt was by design since the club the Email missive came from is known for playing dirty tricks on its competitors. To bolster suspicions, a flier was mysteriously distributed the next day at the airport cab staging area telling the time and place of the secret meeting. The meeting was wisely canceled. Had the meeting taken place, the club where it occurred and its owner would have been scorned by the cabbies. It was suspected that the Email writer leaked the time and location as a way to hurt his competitor thereby revealing the degree of back stabbing taking place within the industry.

Another club owner Emailed: "I know as a fact that some commissioners/councilmen are outraged that these payoffs are affecting the cabbies' services to other legitimate customers, as well as spreading into other industries/businesses. Some cabbies themselves are intentionally creating fictitious 'passengers' who are going from club to club collecting the payoffs but not spending any money in the clubs. They basically walk in and walk out. Although many of us are attempting to curtail these actions, at times it is impossible. We are the laughing stock in the community."

On August 8, this Email was sent by another club owner: 

"Regarding proposing a new ordinance, I myself think the existing would be sufficient if it were enforced. In essence, the existing really does solve the majority of our problem... We will wait till eternity or at least past election day for government intervention. I am certain we can control ourselves. It is the prudent and businesslike solution."

In September, one strip club owner reported paying over one-million dollars to cab drivers so he could remain in business! And where is the IRS while all this goes on?

Only one club owner is requiring all cabbies to sign a receipt for the cash he distributes. This information is forwarded to the IRS. However, this club has suffered increased diversions since implementing the reporting practice.

Nevada Taxi Authority (TA) Administrator John Plunkett, in March 2002, stated that cab drivers told his investigators who were posing as tourists, that certain topless clubs were closed; a rip off; dirty; or the girls were ugly, in order to persuade them to go to a club that paid drivers more. Investigators also noticed that the problem had spread to doormen at hotels along the Strip, Plunkett said. The doormen were demanding a share of the kickbacks limousine drivers were receiving from the topless clubs. In return they were steering hotel guests to cash-friendly limousine drivers instead of cabbies. The cabbies became enraged and staged a boycott of the Rio, allegedly one of the biggest offenders, according to Plunkett.

Plunkett softened his remarks after reportedly being chastised by several cab company owners.

Four months later, instead of trying to remedy the problem, the state Taxi Authority Board, then-chaired by LV attorney Jim Jimmerson, and under the directorship of Sydney Wickliffe of the state Business and Industry Department, abruptly abolished the state laws that were intended to prevent the practice in the first place! Ms. Wickliffe works very closely with cab and limo company owners.

However, the local law remains strong -- but is completely ignored in Clark County where the extortion is most prevalent. According to the Clark County Department of Business License, a law enabling the county commission to either suspend or revoke the liquor licenses of clubs that pay off cabbies has been on the books for over forty years, but such drastic action -- if taken -- could stop some politicians from taking an additional "bite of the apple."

The City of Las Vegas was recently asked to enact a similar law, but the obedient council of Mayor Oscar Goodman and his sidekick, Mayor Pro-Tem Gary Reese, soundly rejected it. Goodman, in 2003, accepted a $40,000 campaign contribution from the Crazy Horse. Reese, during the same election and with Goodman's help, took $10,000 with full knowledge the club was under federal investigation for racketeering and income tax evasion.

CLARK COUNTY CODES: 8.20.297 Paying taxicab drivers. It is unlawful for any liquor licensee subject to this chapter or any employee or agent of said licensee to pay any tip, gift, or gratuity of any kind to any taxicab driver for the delivery of any passenger to the business location of the licensee. 8.20.570 Grounds for disciplinary action. (s) Each licensee who tips, pays or extends any form of gratuity to a taxicab driver for the delivery of any passengers to the business location. Disciplinary action taken pursuant to this section is directed only to regulate the sale and distribution of alcoholic liquor and to minimize its deleterious effects on the public health, safety, morals, good order and general welfare. Sanctions imposed upon a licensee which restrict or prohibit the sale or distribution of alcoholic liquor are within the state's power under the Twenty-First Amendment as delegated to the board by NRS 244.350. (Ord. L-215-02 § 1,2002: Ord.L-212-02 § 5,2002: Ord. L-191-99 § 3, 1999: Ord. L-142-94 §1, 1994: Ord. L-133-93 § 1, 1993: Ord. L-63-87 § 4, 1987: Ord. L-61-86 § 1, 1986: Ord. L-58-85 § 2, 1985: Ord.L-45-82 § 1, 1982: Ord. L-39-80 § 1, 1980: Ord. L-13-70, 1970: Ord. L-11-69 (part), 1969: Ord. L-7-65 § 10, 1965)

The county law, first enacted in 1965 to stop restaurants from being extorted, has been revised on ten occasions, the last being in January 2002. But the city attorney, and DA continue to turn the other way while politicians collect huge political campaign contributions from the cab companies and strip clubs. In 2002, DA David Roger proudly accepted a $50,000 campaign contribution from the Crazy Horse Too, but purportedly returned it after his opponent revealed the donation during the election.

When did the strip club extortion problem first surface? A summit conference of sorts took place in December 1998. Then-Councilman Mike McDonald ask local transportation consultant Peter Christoff to schedule the get-together at Pizzeria Uno on behalf of McDonald's close friend Rick Rizzolo, owner of the Crazy Horse. In attendance were all of the owners and managers of adult businesses that depended on taxis. The meeting was intended to address customers being diverted to clubs that were at the time paying off cabbies up to $20 per passenger. The participants discussed standardizing the amount of money the clubs would pay each taxi driver per passenger delivered. The group agreed on paying $5 per head. Several months later, without warning, the Crazy Horse broke rank and openly began bribing cabbies $10 a head. That's when the bidding war began. Councilman McDonald, a former policeman, took no action.

Within days, the Crazy Horse's front entrance was crowded with taxies. Investigative reporter Darcy Spears of KVBC TV News set up a sting and several drivers were taped diverting passengers to the club. After the newscast, the Nevada Taxi Authority did nothing.

The diversion problems worsened and neighborhood taxi service became almost nonexistent.

The first diversion study took place on January 14, and 15, 2000. It verified an average of seventy-three cabs per hour dropping off or picking up passengers from the Crazy Horse Too. Facing financial devastation, the other clubs joined in, and the auction began.

On September 19, 2001, at a special TA hearing regarding poor service for locals, citizens from Green Valley and Summerlin complained to the politically appointed commissioners of waiting for over two hours for a taxi while dozens of cabs were idling in front of adult businesses. Their complaints fell on deaf ears and the "tipping," as the TA began calling it, started its meteoric rise to the astounding present levels.

The sudden official use of the word "tipping" by state authorities sent up a red flag in the eyes of the club owners who knew it was anything but!

Meanwhile, some cabbies became so brazened by the state's action that a few began protecting the clubs that paid them the highest ransoms. As an example, following the October 2001 beating of Kansas tourist Kirk Henry in front of the Crazy Horse, a cabbie became the club's star witness. The cabbie, who was later identified as having received special treatment from the club including being able to park at the head of the cab line, and being singled out to take intoxicated patrons home at the club's expense, refuted other witness reports that said Henry's neck was broken by a club bouncer over a disputed $88 bar tab. The cabbie testified during deposition that Henry tripped and fell thereby braking his own neck causing him to be permanently paralyzed.

In an unrelated May 30, 2002 Las Vegas Metropolitan Police INCIDENT REPORT, the following statement appears:

"A witness to the incident (name withheld), had the names of the cab drivers who allegedly observed the battery. (names withheld). Contact was made with (cab driver) who did not complete a voluntary (statement). (The cab driver) also stated that (Crazy Horse Too) security person (Michael) Muscato threatened him after he spoke with officers."

In 2004, a recently retired police officer who drove a cab part time reported that he witnessed several tuxedo clad men drag a patron out of the Crazy Horse and knock him down. The cabbie, reverting to his police training, jumped from his cab armed only with a pen and notebook. He confronted the bouncers who were reportedly kicking the man and demanded they stop. He asked them to give him their names. He stated that he was warned to "get back in your cab or we'll kick your ass." He held his ground. The beating stopped. He transported the injured man to the ER at no charge. He later told his story to the Federal Grand Jury investigating the Crazy Horse. A number of cabbies also witnessed the beating, but none agreed to give statements.

With the ante now raised to $70 per passenger, any rumor of enforcement of anti-pay off law is met with an organized protest by cab drivers who communicate with cell phones and fliers placed on the bulletin board at the staging area at the airport.

The cabbies threatened to block the Strip and boycott McCarran International Airport if Governor Kenny Guinn did not veto a new bill intended to prevent cabbies from diverting passengers to businesses that pay them off.

To show their power, on July 29, about 1,000 taxi drivers paraded along the Las Vegas Strip. They used their company's equipment to block traffic for over a half hour without protest from their bosses or authorities.

The state provides the cab company owners with a Certificate of Need and Convenience to limit competition. When boycotts occur, the "convenience" to locals and tourists is affected. Instead of regulating the company owners to prevent their drivers from using their equipment in acts of civil disobedience, or to extort business owners, the state will usually respond by allocating more taxi medallions to further crowd the streets with cabs. The companies that allow extortion then hire fledgling drivers who, for a short time, provide service to locals and tourists, then after learning of the much more lucrative business of strip club diversion and extortion, most new cabbies join the others by ignoring the local's and tourist's needs, and the cycle repeats itself.

After cabbies shut down the Strip and threatened to shut down the airport, Governor Guinn -- who is serving his last term in office -- groveled at the feet of some cab company owners, then obediently vetoed the proposed payoff legislation, thus rewarding the tail for wagging the dog.



Steve Miller is a former Clark County Regional Transportation Commissioner