Forewarned is forearmed
ignores warning, takes
million dollar loss, then
"Based on our investigation and the
information provided by RicRiz's representatives, we concluded that the
allegations regarding Rizzolo's involvement in unspecified criminal
activity were not verifiable, and that some of the rumors were
affirmatively inaccurate. Accordingly, I and others recommended
proceeding with the loan, which closed on November 3, 2005." -
Gregory Alcala, 1st Vice President and Manager, Real Estate Loan
Underwriting for Security Pacific Bank
INSIDE VEGAS by Steve Miller
February 18, 2008
LAS VEGAS - I've been blamed for a lot of stuff I didn't do, but a
DECLARATION filed last week in U.S. Federal Court tops them all. It
also gives me the perfect opening to say, I TOLD YOU SO!
It started back in 2005 when about-to-be-indicted topless bar owner
Rick Rizzolo applied for a $5 million dollar loan. An application
was filed with a California bank that listed the infamous Crazy Horse
Too as collateral. Missing from the application was any reference to
the-then ongoing heavily reported federal investigation that in less
than a year would result in the forfeiture of the saloon and the
imprisonment of Rizzolo.
The bank funded the loan,
but it didn't take long for Rizzolo to default and skip with the cash.
With egg on their face, Security Pacific
Bank's loan committee (photo on left) claimed total ignorance of
the federal investigation and cried foul. But they didn't to go after
Rizzolo or the
title insurance company to collect what they're owed. They decided to
go after the $9 million dollar court ordered settlement of a man whose
neck was broken by a Crazy Horse manager.
The problem is that the bank was warned in advance that they were about
to loan millions to a crook, and they ignored the warning.
I learned of Rizzolo's loan application in 2005 when Crazy Horse next
neighbor Buffalo Jim Barrier received an Agreement from Security
Pacific's loan department asking him to attest that he had no pending
lawsuits against Rizzolo.
At the time, Barrier was deeply involved in his harassment lawsuit
against Rizzolo and was certainly not willing to sign such a document.
He advised his attorney to contact the bank and inform them of the
I went one step further and sent the bank an email telling of Rick
Rizzolo's problems and sent them links to hundreds
of news stories on the subject.
It was later confirmed that the bank's officers carefully reviewed the
information I provided, then took the word of a mob lawyer over mine.
They granted Rizzolo the $5 million dollar loan after being fully
informed they could lose their investment!
Within days of receiving the
bank's cash, Rizzolo hid their money with the help of the brother
of a Federal Court Judge.
"On October 26, 2005, Rizzolo signed a $5,000,000.00 note which was
secured against the underlying real property on November 3, 2005. The
FBI has not been able to track or locate the $5,000,000.00 in United
Currency," wrote FBI Special Agent Anthony J.
Mace on Aug. 13, 2007.
On Tuesday, February 12,
2008, Security Pacific entered a RESPONSE to a MOTION filed on
February 5 by attorneys for beating
victim Kirk Henry. Henry's MOTION
was in opposition to Security Pacific's effort to foreclose on the
Crazy Horse Too.
The Henrys are concerned that if
the bank gets their hands on the property, they'll hold a fire
sale, and Henry's unpaid $9 million dollar court ordered
settlement will be impossible to collect unless the court reverses an
asset protection scheme devised by the brother of a Federal Court Judge.
Conspiracy theorists also think the bank will sell the property back to
an associate of Rizzolo for the unpaid balance of his loan, and the
carnage will be allowed to continue with the blessings
of the Mayor.
Also in their RESPONSE, the bank identifies Steve Miller as
the source of all the information they received regarding Rizzolo, and
said that based on their conversations with Rizzolo's attorney
Sgro, they decided to discount the information, and fund the loan.
Now they're paying the consequences.
They're referring to an October 30, 2005 email I sent to
bank officers containing links to documents including my comprehensive "Rick
Rizzolo Connection" website; a press
release from the United States Attorney telling of racketeering
activity at the Crazy Horse: and a transcript of the Dateline
happened one night" that aired on August 8, 2004, a
year before the bank granted the loan. The segment told of the beatings
Kirk Henry. Eban Kostbar, and Paul Russo, and confirmed the presence of
a federal organized crime investigation.
According to the transcript: "But
these allegations of intimidation and violence have caught the
attention of the FBI, which has started its own investigation. The feds
have interviewed Kirk Henry and last year they raided the Crazy Horse
as part of a probe into an alleged pattern of sticking customers with
inflated tabs and beating them if they don’t pay up. And what does the
club have to say about the allegations? Its attorney Tony Sgro denies
this was not enough to impress Security Pacific Bank! Throwing
caution to the wind, they raced ahead and granted the loan. It was as
if they did it to spite me and the other writers who've been covering
this story for over a decade.
After the loan was funded, it didn't take long before the bank
learned Rizzolo had no intention of paying back his loan; had hid the
cash; and that their collateral was seized by the United States of
Instead of doing the sensible thing and going after Rizzolo who
personally guaranteed the
loan, or Chicago Title who issued the title insurance policy, the bank
for some unknown reason opted to spend stockholder's money on expensive
and Las Vegas
attorneys to fight Kirk
Henry and ask Federal
Judge Philip M. Pro to approve them foreclosing on the Crazy Horse Too
property so they can conduct a fire sale to recoup their losses.
When attorneys for Henry protested, the bank gave the excuse they
didn't know in
advance of Rizzolo's problems. Then after it was brought to their
attention that I had provided them with the information before the
loan, they tried to
denigrate the veracity of the news reports I sent them in order to
substantiate their foolish decision.
Here's the bank's excuse
for funding the loan:
"In the course of conducting
underwriting due diligence regarding the proposed loan, the Bank became
aware of some allegations and speculation regarding Rizzolo and the
Crazy Horse Too business. The Bank reviewed a number of articles from
the Internet, including some emailed to the bank, suggesting that
Rizzolo was the subject of a federal investigation and was subject to
an impending indictment."
"As part of its investigation of
these issues, the Bank sought further information from representatives
of RicRiz and Rizzolo. On October 11, 2005, the Bank received a letter
from (Paul) Marrone attaching a letter from the attorneys for Rizzolo
and the Crazy Horse Too." "Marrone's letter said that there was no
indictment against Rizzolo and that Rizzolo had 'broken no laws.'
Marrone's letter indicated that the articles the Bank had found on the
Internet were 'dated some time ago,' and had 'been squashed.' Marrone's
letter said that the investigation of Rizzolo had since closed with no
findings at all of illegal activity.'"
The RESPONSE continues: "On
October 21, 2005, representatives of the Bank then spoke with Marrone
and an attorney brought into the call by Marrone." "The borrower's
representatives told the Bank that Rizzolo was the subject of ongoing
investigations by the FBI and IRS, but indicated that this level of
scrutiny was typical for owners and operators of adult businesses in
Las Vegas. And critically, the lawyer said that he had no
knowledge of a pending indictment, and did not expect there to be an
indictment. None of Rizzolo's representatives disclosed ever, that
Rizzolo was in the process of negotiating a plea agreement with
The above excuse is the kind of behavior that should inspire bank
examiners to investigate Security
Pacific Bank, especially since they make
no mention of going after Rick and Lisa Rizzolo's hidden assets, assets
that were also pledged as collateral.
up, then blamed the messenger for their troubles.
This is why our nation is now faced with hundreds of thousands of loan
defaults. Lenders like Security Pacific obviously don't do their
homework, then come begging the
government to bail them out.
For telling a bank such lies, Mr. Sgro should face court sanctions. And
for supposedly believing him, Security Pacific deserves a visit from
Federal Bank Examiners.
Sgro even tried to use Rick Rizzolo's 2000 SLAPP suit against me in
order to try to bolster his claim that I provided bad information.
However he failed to mention that by November 2005, the basis of the
libel lawsuit -- my writing about his client's racketeering activities
-- had been verified and the case dismissed.
Nonetheless, the bank fell for it. At least it looks that way from the
One of my inside sources thinks it goes much deeper:
"The actions of Security Pacific
Bank could have been Rizzolo's plan all along. He could buy the
Crazy Horse back through a strawbuyer with the bank's money.
There are several standing by with close ties to Rizzolo, et. al.,
including two men with real estate holdings on the LV Strip.
This way Rizzolo gets it back for free. Up until this
point everything Rizzolo has done, except for sitting in the can
for a few months, which is a small price to pay for the pay back, has
paid off in spades for him. He gets the money to buy the place
from the same people that foreclosed on it. Then pays back the
strawbuyer with his hidden 5 mil. How beautiful -- if the judge
goes along. You have to give Rick credit for this scam.
Thinking about it, someone at the bank really could have been in on the
scam from the get go. Perfect way to wash his money. He gets the
money from the bank with no intention of paying it back knowing that he
was going to lose his license to operate the CH2. Bank takes
building. All is good for Rizzolo. Now Rizzolo claims poverty and
does not have to pay all the rest that he owes. While he still
has all of his money that can't be touched thanks to a FEDERAL JUDGE'S
brother who hid his assets. Pretty damn smart of him. He
beats everyone and spends a few months in lock-up. His Chicago
friends taught him well the art of the bust out."
His part about Rizzolo claiming poverty is really far fetched. The
following was filed by Tony Sgro on October 30, 2007.
In his sentencing of Rizzolo, Judge Pro
clearly ordered that bankruptcy was not an option -- that Rizzolo could
not declare bankruptcy to protect his assets. I can't understand how
Patti & Sgro can use bankruptcy to try to pressure the court at
this late date. They were present when Judge Pro made his order, and
did not protest it at the time. They also know that Rick
and Lisa Rizzolo hid way more than enough assets to cover their debts,
and the feds know it.
Security Pacific Bank's MOTION will be heard at 3 PM on Friday February
22 in Judge Pro's court. INSIDE VEGAS will be there
to report the outcome.
But the question of whether a bank that didn't do its due diligence
should be allowed to seize an asset owned by the citizens of the United
States of America, then be allowed to auction it off, may have been
answered on Friday February 8 by a highly coincidental action taken by
the IRS. On that day two liens were filed; one against the Crazy Horse Too property, and the
other against Rizzolo personally.
Together they total $22,473,840.41.
It's now very obvious the IRS is not going to let this asset slip out
of their hands.
With this new information, it's expected that Judge Pro will
categorically deny Security Pacific's ridiculous MOTION and put to end
the rampant conspiracy speculation.
That said, there are only 17 weeks remaining to sell the Crazy Horse
Too as a topless bar. On June 30, its adult use zoning will permanently
expire, and the property will revert back to warehouse use only. If so,
this may hopefully put an end to one of the saddest chapters in Sin
Copyright © Steve Miller