As if things couldn't get any more bizarre...

Racketeer Rick Rizzolo's lawyers -- one licensed,
and one not -- file phony court documents that
further stall beating victim Kirk Henry's case

INSIDE VEGAS by Steve Miller
AmerianMafia.com
February 1, 2010

   Subpoena issued at 1 PM on the day Steve Miller was "commanded" to appear at that morning's trial

LAS VEGAS -  For the entire length of the Kirk Henry federal case, the United States Federal Court for the District of Nevada has handled defendant Rick Rizzolo with kid gloves. In the meantime, quadriplegic Kirk Henry is still waiting to be paid for the injuries he suffered at the hands of one of Rizzolo’s thugs back in October 2001.

Henry's neck was broken after he disputed a padded  bar tab at Rizzolo's now-defunct Crazy Horse Too topless bar in Vegas. Henry was not Rizzolo's first victim.

Instead of going after racketeer Rizzolo for using the court to stall this case, the federal court is going after Rizzolo's jail house lawyer James “Spud” Kimsey for allegedly practicing law without a license -- at Rizzolo’s behest!

Instead of throwing the book at RIzzolo for knowingly hiring a non-lawyer like Kimsey, then signing his name to fifteen bogus court filings Kimsey authored including a subpoena commanding Kirk Henry’s attorney appear for a deposition at one in the morning, the federal court seems obsessed with punishing the easiest target, an ex-con biker who's kept his nose clean for the past fourteen years.

This is another example of why Kirk Henry has had to wait so long for justice.

Kimsey’s inclusion in this case was intentional -- to stall the case for at least an additional six months. It worked. The case has gone nowhere since last summer and Henry still sits in his electric wheelchair waiting for justice that seems more elusive with each passing day. And now the court is taking even more time away from Kirk Henry’s plight, to attend to this latest waste of time -- punishing Kimsey for doing Rizzolo's bidding.

But what's even more amazing is that Kimsey usually makes more sense than Rizzolo's licensed  attorneys! To see what I mean, take a look at the quality of this document he authored that was filed in federal court on Friday, January 29: http://www.stevemiller4lasvegas.com/Spuds01-29-10Response.pdf

In it, Kimsey tries to explain why he should not be held in contempt for practicing law without a license, but he also completely and clearly explains Rizzolo's bogus defense better than all Rizzolo's high priced lawyers could do since this case began in 2001.

With the exception of the ridiculous subpoena Kimsey filed on the same day he "commanded" me to appear in court so he could attempt to put me on the witness stand (see the subpoena above that I received four hours after the court hearing ended), or the subpoena he filed with Rick Rizzolo's approval on September 14, 2009 demanding that Kirk Henry's lawyer appear for deposition at one in the morning, Kimsey makes more sense than any other member of Rizzolo's legal team ever has!

As a journalist, I must occasionally refer to the Nevada Reporter's Shield Law when I'm subpoenaed to testify at depositions or in court.

Several years ago, Rizzolo's former attorneys Dean Patti and Tony Sgro tried to force me to appear at a deposition. They wanted to know the names of my sources. My attorney cited NRS 49.275, and their subpoena was summarily quashed.

In this case,  even had I received the subpoena in a timely manner, I would have opted to exercise my  privilege and not testify.  I would have done so in respect to other Nevada journalists.

However, I would have loved to sit in the witness chair and tell the court that they had the wrong man. But, as a working journalist engaged in an ongoing story involving the litigants in the same court's proceedings, it would have set a terrible precedent for my profession.

Therefore, I'll testify on AmericanMafia.com instead:

I wish I could go on the record and tell Federal Judges George Foley and Philip Pro: "You're punishing the wrong man! Rick Rizzolo put Kimsey up to this, and Rizzolo should be the one charged with Contempt, not Kimsey!"

Hopefully they'll get the message.

Below is an example of the work product of a licensed attorney working on Rizzolo's behalf. After reading Ken "The Ticket Fixer" Frizzell's latest court filing,  I believe that "Spud" Kimsey could have done a better job:

In it, Frizzell argues (as did Kimsey) that the Crazy Horse Too was worth more than $30,000,000 in 2006 when it was seized by the government

(In 2006, my house was worth just over a million dollars.)

Today, the broken down converted warehouse and seedy property where the Crazy Horse Too once stood is appraised at just under $3 million and dropping in value each day.

(My house is presently estimated to be worth around $250,000.)

So it's like crying over spilled milk for Rizzolo to claim he could have sold the topless bar and its property for enough to pay all his debts. He couldn't. Furthermore, the "buyers" he claimed were offering $30 million were all phonies with no money, or were Rizzolo's mob associates acting as straw men.

Even though Frizzell's estimate of the Crazy Horse Too's worth is wildly exaggerated, he helps Kirk Henry's case by his use of the words "the obligation of both,"  meaning Rick Rizzolo is personally obligated to pay his "restitution of $10,000,000 (to Kirk Henry)," "assessments," "fines," "forfeiture of personal money judgment of $4,250,000.00," and "IRS lien of $1,723,340.31."  This, in "agreement with the Government," does not include an ability to file bankruptcy, or hide the money off shore.

In its hey day, Rizzolo bragged the Crazy Horse Too purportedly turned profits of up to $12 million per year. But on April 28, 2003, INSIDE VEGAS published several affidavits taken from District Court records that relayed eyewitness accounts of how Rizzolo allegedly produced such profits: These allegations were subsequently proven to be accurate.

According to eyewitness statements, Rizzolo was operating a major drug and prostitution super market in addition to extorting customers out of cash or forcing them to sign bogus credit card bills! Lisa Rizzolo was married to Rick at the time, and because Nevada is a Community Property state, she shares responsibility for her ex-husband's court ordered debts. Getting a "sham" divorce and stashing ill-gotten money off shore does not protect her from prosecution or collection through "repatriation" (more later).

According to a U.S. Department of Justice press release that described the: "...serious threat that the Crazy Horse Too has presented to the community," and the fact that  "...male employees sought to extort payment from them (customers) through threats of violence and through the actual use of force," the only way Rizzolo could make $12 million per year was through highly illegal methods, and that was the only possible reason the bar was worth $30 million in Rizzolo's mind.

To pay $30 million for the Crazy Horse Too, a new owner would have had to continue doing business in the same manner as Rizzolo.

Another example of why Kimsey is a better advocate for Rizzolo than Rizzolo's licensed legal team is contained in the following document filed last  Friday by attorney Ken Frizzell falsely claiming that his client had a legitimate divorce, and has the right to declare bankruptcy:

Frizzell fails to note that the Rizzolo's divorce was a "sham" that took place three weeks before he entered into plea negotiations, and was accurately referred to as such in the Las Vegas Sun editorial of August 21, 2007. And as far as being able to "discharge in bankruptcy" all of Rick and Lisa Rizzolo's financial obligations, Frizzell should know that bankruptcy was ruled impermissible by the court in 2006 as part of Rick's plea agreement.

If bankruptcy was an option, the Rizzolo's would have already filed one.  Instead, they hid their cash off shore out of their creditor's reach -- a clear sign they knew they were in deep trouble.

In doing so, Rick and his ex-wife Lisa may have incriminated several local attorneys including one who is the brother of a federal court judge. At the time the judge's brother was hired to set up off shore accounts, Rick Rizzolo's troubles were front page news. Fully aware of who he was working for, the "asset protection" lawyer along with accountants and others in the Las Vegas legal community including Patti and Sgro obviously schemed to deceive federal authorities to protect the Rizzolo's bounty thereby killing almost every chance of Kirk Henry and the IRS getting paid, unless the overseas tax shelter laws could be changed, or a brave judge stepped in and changed the rules (more on this later).

The attorneys and accountants that helped the Rizzolos were paid a fortune for their highly questionable services.

Las Vegas Review-Journal columnist John L. Smith on Friday, January 29, 2010 wrote: "Rizzolo's days running from his $9 million judgment obligation to paralyzed Kansas tourist Kirk Henry could be near an end. If that happens, Rizzolo's mess will get much deeper. The list of potential defendants next in line to be charged with attempting to deceive federal authorities will surely make bigger headlines."

Smith is right, especially if Lionel Sawyer & Collins asset protection attorney John Dawson is named as a defendant. His brother is United States Federal Judge Kent Dawson who coincidentally presided over the felony trials of fifteen Crazy Horse Too employees without disclosing that his brother was hiding cash for the former Crazy Horse Too owner.

At a time like this, the court should be focusing on moving Henry's case forward and forcing the Rizzolos to "repatriate" their millions stashed in the Cook Islands.

If this took place in an expedient way, it might negate having to name new defendants, and open a major political can of worms in the months leading up to a highly contested federal election.

The IRS should also jump in because we need the tax revenue to bail out banks, insurance companies, and auto manufacturers.

Rizzolo in his plea bargain agreed to pay over $27 million in debts in exchange for a light prison sentence. The government kept their part of the bargain, but Rizzolo welched on his, and to the present day, the court, Department of Justice, and IRS don't seem to care.

Last week, a federal judge in Minnesota established new and long-overdue Case Law that Judges Foley and Pro can now use to force the Rizzolos to return their cash to the United States.

The Honorable Michael J. Davis. Chief U.S. District Judge, District of Minnesota ordered litigants in his court to “repatriate” their ill-gotten funds stashed in off shore banks.

Now, the U.S. District Court for the District of Nevada can do the same so that Kirk Henry, the IRS, and others can finally be paid.

Here's the ruling:

Case 0:09-cv-03333-MJD-JJK Document 52 Filed 12/08/09 (emphasis added)

IT IS HEREBY FURTHER ORDERED that Defendant shall, no later than December 3, 2009, repatriate to the territory of the United States any and all funds and assets that are held by Defendant or are under his direct or indirect control, jointly or singly, or in which Defendant has or had any beneficial interest, or over which he maintained or maintains and/or exercised or exercises control, including but not limited to any and all assets and funds:
1. Held in foreign bank, brokerage or other financial accounts; or
2. Transferred out of the United States from any account within the territory of the United States at any point from January 1, 2006 through the present; and Defendant shall, no later than December 3, 2009, deposit such repatriated funds into the Registry of this Court.

In contrast to the Minnesota case, federal judges in Nevada have turned their backs when the Rizzolos withdrew money from their off shore accounts to pay legal fees, or fund their lavish lifestyles.

In the Minnesota case, Judge Davis was not as patient or lenient as Nevada judges, and on January 25, 2010, set the perfect example for the Rizzolo case -- he jailed the defendant Trevor G. Cook for not complying with the court's order to repatriate his money. Cook is to stay in prison until he repatriates his ill-gotten cash.

Not only did Rick Rizzolo not comply with the court's order to pay his debts, his wife Lisa falsified her income tax returns by refusing to report the off shore accounts.

What’s good for a goose in Minnesota , should be good for the gander in Nevada!

Rick and Lisa Rizzolo are probably laughing their heads off because the court was duped into going after the wrong guy -- Spud -- further stalling this case and causing further injury to Mr. Henry.  But based on the December 8, 2009 ruling in Minnesota, they may not be laughing for long.