Rick Porrello's - AmericanMafia.com - Steve Miller

Chicago "buyer" visits Crazy Horse Too
"He knew where every light switch was located."

INSIDE VEGAS by Steve Miller
AmericanMafia.com
December 17, 2007

It's easy to use this festive season to try to put one over on us. Making clandestine moves during Christmas is brilliant timing because law enforcement and local reporters are not paying much attention.

"This is where Ricky kept his sports memorabilia." "This is where Ricky's prized Al Capone barber chair sat." This is how the steam room works." "It''ll take about six months to get the club working again, and after that it'll make about twelve million the first year, then it'll boom." "The first six months, we gotta get the cabbies and limo drivers paid off to start bringing customers back again."

These reportedly were the words of a man only identified as "Spero from Chicago," who along with local hard money lender Raymond F. Williams and a female representative from CB Richard Ellis Realty were observed entering the seized Crazy Horse Too at 1:45 PM on Friday December 14, 2007.

The two men on the left were photographed waiting for over an hour in the parking lot for an audience with Spero. When he arrived they accompanied him into the building. According to my source, the two men only identified as Marshall and Jessie, pitched Spero for positions in management after he''s approved to buy the place. Spero reportedly turned them down saying he already has managers and bartenders standing by. The men left and Spero continued giving his tour.

"He knew where every light switch was located. Every nook and cranny. He talked as if he once ran the place. It sounded like the same old crew is coming back in," reported the INSIDE VEGAS source.

Spero has reportedly offered $28 million for the shuttered topless bar. He reportedly secured a $24 million dollar "non-recourse loan" from an unknown source, and is trying to raise the difference of $4 million from local lenders. A non-recourse loan is secured by only the equity in the property and is not guaranteed by the borrower. If such a loan was granted, it was miracle since the Crazy Horse land and buildings were just appraised by the government for only $5.4 million!

This should be the first red flag to the Feds.

The next red flag is that Spero reportedly knew the layout and operation of the Crazy Horse Too "like the back of his hand," according to my source.

U.S. Federal Court Judge Philip M. Pro ruled the Crazy Horse cannot be sold to "a close relative or ongoing business partner of (Rick) Rizzolo’s, is a felon, or has business dealings with organized crime members or groups."

CB Richard Ellis Realty couldn't care less who they sell it to as long as they get their 5% commission, so they can't be counted on as a first line of defense. Neither can the District Attorney, police, or city council.. More on that later. This mess is now solely in the hands of the Federal Court Judge assigned to the case.

Vegas transplant John J. Flood served on the Board of Directors of the Chicago Crime Commission. According to Flood, a Chicago man by the name of Spero "Gus the Greek" Palladinos was involved in mid west adult businesses. "The mob is never far away from the sex business, even in these moralistic, and repressive times," according to Flood.

It has not been verified if Palladinos is the same man who is purportedly buying the Crazy Horse Too, but Rick Rizzolo formerly owned and managed a Chicago strip club also known as the Crazy Horse Too. He was paid as much as $240,000 per year to manage the club according to court records, so therein may lie a connection.

The most alarming part is that the background of the buyer will probably remain a mystery until the club reopens if Assistant U.S. Attorney Daniel Hollingsworth has his way.

"The general public should not be allowed to know the proposed offers, the proprietary information, etc., since Rizzolo will select one to see it will complete the sale. If it fails, Rizzolo will select the next one." - Assistant U.S. Attorney Daniel Hollingsworth, August 13, 2007

Mr. Hollingsworth's statement elicited a strong response from a local attorney. More on this later.

Rizzolo and his associates had to beat money out of bar patrons to make the profits they did, and any new buyer willing to pay five or six times the property's appraised value will have to do the same to cover his debt service.

For years, local authorities allowed murders and beatings to happen on this property causing it to eventually be seized by the Government. Just because it's Christmas, they should not be letting down their guard now.

Despite Hollingsworth's words, the public has every right to know -- in advance -- who will be the next operator, and who would pay so much for something so tainted?

Assistant U.S. Attorney Daniel Hollingsworth said the name of the potential buyer will be kept under wraps until the deal is finalized. Hollingsworth said the buyers have already been harassed and any further problems could cause the sale to fall apart. He didn't elaborate on the nature of the harassment. - Las Vegas Review-Journal, November 27, 2007

"Harassment?" Hollingsworth is misusing the word to describe these columns and my daily E-Briefs that are emailed, faxed, or hand delivered to every potential Crazy Horse buyer and lender as a public service.

Speaking of "harassment," so far the U.S. Attorney for Nevada has allowed beating victim Kirk Henry to languish over six years without being paid for injuries that left him a quadriplegic after he objected to an inflated bar tab at the Crazy Horse. Meanwhile the U.S. Attorney for Nevada also allowed Rick Rizzolo to hide his assets with the help of a prominent local attorney whose brother is a Federal Judge involved with parts of this case.

Rizzolo reportedly removed from equation

I'm repeatedly asked why Rick Rizzolo is allowed to call the shots regarding the sale of his topless bar from a cell in the Los Angeles Federal Metropolitan Detention Center?

The answer finally came on Friday November 30, when attorney Steven A. Gibson filed a MOTION TO CONTEST STANDING OF CRIMINAL DEFENDANTS TO PARTICIPATE IN ANCILLARY PROCEEDINGS.

According to the brilliantly written MOTION, Rizzolo has no such right according to the Federal Rules of Criminal Procedure and several U.S. Supreme Court decisions. Judge Pro is scheduled to rule on Gibson's MOTION, Monday January 14. Hopefully he'll put an end to this charade at that time and expose those who are aiding and abetting Rizzolo in his quest to keep his hidden fortune.

Hollingsworth's once-sealed MOTION stated: "Rizzolo will select one to see it will complete the sale. If it fails, Rizzolo will select the next one."

Thankfully Judge Pro denied Hollingsworth's MOTION, but it still seemed to set a dangerous standard based on the Review-Jounal news story that stated; "Hollingsworth said the name of the potential buyer will be kept under wraps until the deal is finalized."

Any legitimate buyer should not care that his name is mentioned in these columns. Only a crook would be concerned about seeing his name mentioned on AmericanMafia.com.

This is not a matter of national security. It's only about a titty bar. The general public has the right to know every detail of the transaction including what it's costing taxpayers to bring in a government real estate expert from the Department of Justice in Washington D.C. with the express mission to sell the place at top dollar?

It doesn't take a D.O.J. real estate expert to understand that no entity other than La Cosa Nostra would offer $28 million for a shut down topless bar with a horrible reputation in the seediest part of town. Furthermore, since Rick Rizzolo was ordered off the property 16 months ago, the business has been shuttered twice and all of the other clubs absorbed their business and dancers. A new owner may never get the bar back to its previous earnings unless he resorts to the criminal ways that made the place obscenely profitable in the past.

The govenment should do what they did in the Atlanta Gold Club case. Tear the place down and sell the land for a bus station. But Gold Club owner Steve Kaplan didn't have Rizzolo's connections in Washington, D.C.

One of the Crazy Horse's attorneys, Jay Brown who's name has surfaced in organized crime investigations, is the business partner of United States Senator Harry Reid. Brown is also a law partner of LV Mayor Oscar Goodman. All the right folks to have in your corner.

It's long past the time for Judge Pro to lay down the law and lower the U.S. Attorney's outrageous expectations of selling the saloon for five times its worth to pay Rizzolo's debts and let him keep his hidden fortune. The U.S. Attorney knows that if the club sells for market value, between $15 and $18 million, many of Rizzolo's debts will go unpaid, and the court will have to revisit his hasty divorce and go after the assets he hid -- assets worth far in excess of his court ordered debts -- assets that should by now have been seized to pay Kirk Henry's medical expenses and the IRS.

The government owes a speedy resolution to the Henry family, but not at the physical expense of future Kirk Henrys.

But my main concern is that for the past several months, U.S. Attorneys seemed more interested in protecting Rick and Lisa Rizzolo's hidden personal assets than protecting the health and welfare of the general public! Why?

When recently questioned, several federal officials reportedly blamed Steve Miller for their problems in selling the club at a price high enough to cover Rizzolo's debts.

I was also informed that Mark Hafer, one of Rizzolo's mob lawyers, told a source that "Steve Miller is mopping the floor with me." Another source said "Judge Pro is tired of the bullshit, and the Feds who were protecting Rizzolo are having second thoughts." I certainly hope so.

I'm glad I pissing off the right people. We're just trying to save a few lives.

Legitimate buyers realize they're buying a business that was closed down for killing and maiming its customers -- not a pizza parlor or shoe store. They should also understand that the public is justified in being suspicious that the criminal activity will resume at the end of 2009 after next door neighbor and ad-hoc INSIDE VEGAS cameraman Buffalo Jim Barrier's lease expires and the place is no longer under his watchful eye 24/7. Maybe that's what Spero meant when he reportedly said "it'll make about twelve million the first year, then it'll boom."

Therefore the Feds owe it to the citizens of Las Vegas to make sure the buyer will remain squeaky clean if Barrier is forced to move his auto repair shop in 2009.

According to three experts in the strip club and real estate business, the Crazy Horse -- if operating within the law -- is worth approximately $15 - $18 million dollars maximum.

Several bidders have expressed interest with offers between $15 and $18 million mainly for the real estate. Operating the topless bar is their secondary priority. They say that at under $18 million, an investor could cover his debt service with the legal earnings of the club and the rental of adjacent warehouse spaces to established businessmen including Barrier, and could afford to sit on the property which has a high appreciation rate and wait for his profits without having to bash heads to make money as did Rizzolo and others who are suspected of being the high bidders.

It's believed that without a criminal enterprise operating on the property, adjacent real estate values will sky rocket. But it's also believed that with the re-opening of the Crazy Horse Too under questionable ownership, the nearby land values will flatten.

Adjacent high rise condo developers have also indicated they would rather see some other use take place on the property in order for them to consider adding to their investments in the once forgotten industrial area.

FOR SALE: Horseshoe Hotel and Casino - $32 Million, Crazy Horse - $28 Million!

I wish somebody at the U.S. Department of Justice or CB Richard Ellis Real Estate would educate me on why a blood stained, broken down, shuttered, converted warehouse on Industrial Road is worth almost the same as an open-for-business 26 story hotel/casino on Fremont Street occupying a square block of valuable downtown land; with a roof top pool; six story parking garage; sky room steak house; and current liquor and unlimited gaming licenses?

On June 28, 2007, the Las Vegas Review-Journal reported that the Horseshoe sold for $32 million. Now Spero reportedly wants to pay $28 million for a dump!

When asked why anyone would pay so much for the Crazy Horse, one D.O.J. agent told a reliable source: "The mob left Vegas years ago. There are ample safeguards in place. Metro along with (City Director of Business Activity) Jim DiFiore and the City Council would never grant a new license to anyone associated with organized crime."

Mayor can resume voting to help former and current mob clients

Though the Las Vegas City Attorney agreed that the mayor had serious conflicts of interest and advised him to abstain on votes benefiting the Crazy Horse Too, the Nevada Commission on Ethics found nothing wrong with him voting to help his friend Rick Rizzolo and other former and current clients of his law firm.

Goodman in his response to my Request for Opinion stated that he relied on Jim DiFiore, City Director of Business Activity, to find grounds to bring the Crazy Horse before the council to prove why they deserved to keep their privileged license after beatings and racketeering caused the indictment of Rizzolo and 16 of his goons.

Mr. DiFiore (obediently) found no grounds to question the bar's license.

In 1990, then mob attorney Oscar Goodman got Rizzolo off with a gross misdemeanor after beating Rick Sandlin to death with a baseball bat. At the time Goodman was well known for charging his clients $500,000 to take a case.

Goodman states in his response that he wasn't aware his law partner David Chesnoff was representing Bonnono Crime Family member and Crazy Horse manager Vinny Faraci at the time when the bar should have been shut down by the council. I guess the mayor doesn't read the paper. It was big story.

When I filed the Opinion Request in July 2007, I knew from past performance that the politically charged Ethics Commission was probably going to let Goodman off. But since I filed the Request, at least he was forced to abstain for a while on votes to help Rizzolo. Unfortunately, Goodman decided to bully his council from behind closed doors to continue helping Rizzolo, et. al. He also extended his hand to several skeptical council members who may need his help in the future in trade for a small favor for a former client.

That's when once-skeptical Councilman Steve Wolfson made a quick one-eighty and said Rizzolo's twice-bankrupt straw man Mike Signorelli had an "unblemished financial record," then voted to let him reopen the topless bar just before Wolfson's wife District Court Judge Jackie Glass denied Kirk Henry's attorneys the right to audit Rizzolo's hidden personal assets.

Both Wolfson and Glass have higher political goals and Oscar Goodman can be a valuable ally when it comes to campaign fund raising.

That's also when obedient Councilwoman Lois Tarkanian sponsored a law to extend the time the Crazy Horse can retain its adult use zoning for an additional six months, or until after Rizzolo is released from prison on April 4, 2008. Had she not done so, the zoning would have permanently expired on December 30 negating the need for today's INSIDE VEGAS column.

Tarkanian's son Danny also has high hopes of someday holding elective office, possibly succeeding his mom on the city council. Having a friend in Goodman can sure help that happen.

Now Mayor Goodman can resume presiding over the city council when the new (old?) owner comes before them for a license to open the Crazy Horse, even if one of Goodman's law partners represents the guy. Only in Nevada!

Before I filed my ethics complaint, for seven years Goodman schemed to find ways to help his former clients at the Crazy Horse. He sponsored a law to allow teenagers to strip; a law to allow the club to expand; voted to let organized crime associates hold key employee status; tried to lower Rizzolo's fine; harassed two of Rizzolo's competitors -- Treasures and Cheetahs; then bragged "I like Rick Rizzolo." "He goes to Piero's every Thanksgiving and feeds hundreds of needy people. And he treats them with dignity."

During the years following the Sept. 2001 attempted murder of Kirk Henry, additional beatings took place at the hands of Crazy Horse Too staff. A number of requests were filed with city officials to bring the Crazy Horse up on a Show Cause Hearing. These requests came in both written and oral form, often from the podium during citizen's participation at the end of council meetings.

After personally writing an open letter to the mayor requesting the city take immediate action before anyone else was injured, he invited me to visit him in his city hall office. There I received a very cold reception. His opening statement was "I'm not doing Joey Cusumano any favors," though I had not brought up Mr. Cusumano's name.

His reason for mentioning Cusumano was never explained, though Cusumano is a former Goodman Law Firm client and is listed in Nevada's Black Book. He has also been long suspected of having hidden ownership in the Crazy Horse Too.

After my visit, City of Las Vegas Director of Business Activity Jim DiFiore defiantly ignored all requests to bring the club forward for license revocation, while the mayor consistently told inquirers that it was DiFiore's responsibility to schedule such hearings.

The public pressure to schedule a Show Cause become so overwhelming that on April 26, 2005, Mayor Goodman made a personal visit to my home to try to explain why the city was not taking action.

In this AmericanMafia.com photo by Mike Christ, Goodman is telling me he could not take action in the middle of a Federal investigation -- admitting that he possessed such authority -- but would not exercise it at that time.

I reminded him that he personally sponsored a Show Cause hearing against Cheetah's, a Crazy Horse competitor, right in the middle of a Federal investigation. I also informed him that his refusal to take action could expose additional tourists to the harm suffered by Kirk Henry and others.

He turned and left. The beatings continued.

I wrote the city's ethics law, so I felt compelled to take further action and filed a Request for Opinion with the Nevada Commission on Ethics. On Friday, December 14, 2007, they released their decision. I was not surprised that they found no fault with the mayor's actions. But before making their determination, the Commission's attorney presented several strongly written statements for their consideration -- statements Goodman would never want the public to see -- statements that the Ethics Commissioners found irrelevant.

This is just another example of Nevada's way of protecting their crooked politicians... Congratulations Nevada Commission on Ethics!

Note the statements regarding Goodman refusing to take disciplinary action; being Rizzolo's resident agent; asking council members to meet with Crazy Horse owners out of public view; and that he realized he had a conflict only after my complaint was filed.

Also look at his reply saying he has no authority to bring the Crazy Horse up on a Show Cause, and that city staff found no basis to do so.

This is a lie. Las Vegas Metropolitan Police Department statistics indicated that the Crazy Horse received 165 police calls in 1999, 239 in 2000, and 333 police calls in 2001 including 9 assaults and 6 robberies involving bar employees over a two-year-period.

When I served on the council, I personally scheduled five Show Cause hearings without informing the Director of Business Activity or City Attorney until after the City Clerk had scheduled my items.

Also, Lt. John Alamshaw of Metro's robbery detail stated he made five requests for prosecution of Crazy Horse employees with the DA's office that were ignored. (It was later discovered that District Attorney David Roger took $50,000 from Rizzolo for his political campaign, but purportedly gave it back after I wrote a story about it.) Lt. Alamshaw's information and the police call statistics were also presented to the mayor and DiFiore without response.

In the meantime, the Crazy Horse was sued for the wrongful death of long haul trucker Scott David Fau, and Rizzolo allegedly paid beating victims Paul Russo (left) and Eben Kostbar (right) $300,000 each in exchange for them signing agreements of confidentiality.

Many of these cases were well covered on local TV news and in the papers with the exception of reporting Russo and Kostbar's confidential settlements. But Goodman and DiFiore still turned their backs in the face of heavy news coverage and an uproar from the public for the city to shut the place down.

Goodman and DiFiore even refused to act after Dateline NBC on Sunday August 1, 2004, aired a program on the brutality at the Crazy Horse entitled "IT HAPPENED ONE NIGHT."

On August 12, 2004, at the mayor's weekly press conference, a reporter asked Goodman if he watched the broadcast? He meekly replied: "I did not see that."

Dozens of confidential cash settlements were paid to victims of beatings by Crazy Horse bouncers after they refused to sign inflated credit card tabs. Each victim had to hire an attorney to receive a settlement ranging from $100,000 - $300,000. Each settlement required the victim to sign a confidentiality agreement and not press charges or talk to the media.

No Crazy Horse employee has ever been arrested for beating up a customer.

The settlements received by Russo and Kostbar were meant to be confidential, but it's hard to keep secrets in the Clark County Court House.

Regarding Goodman's excuse that the mayor does not have the authority to bring a disciplinary action against a privileged license holder, could you imagine what would happen if the mayor asked to have a Show Cause item scheduled and a staff member refused to cooperate? So it's obvious Goodman is being disingenuous in trying to pass the buck to his subordinate. He was obviously protecting his former client Rizzolo, and got caught.

"The mob left Vegas years ago? There are ample safeguards in place? Metro along with (City Director of Business Activity) Jim DiFiore and the City Council would never grant a new license to anyone associated with organized crime?"

Give me a break!

Dec. 15, 2007
Copyright © Las Vegas Review-Journal

Panel clears mayor
Ethics allegation found without merit

By ALAN CHOATE
REVIEW-JOURNAL

Las Vegas Mayor Oscar Goodman did not give the Crazy Horse Too topless club special treatment and an ethics allegation against him is without merit, according to a Nevada Commission on Ethics report.

"I didn't do anything wrong," Goodman said Friday. "I assumed it would turn out that way."

The allegation was filed by former Las Vegas City Councilman Steve Miller.

"Whether they felt it was a valid request for opinion or not, it kept the mayor from helping his friends at the Crazy Horse," Miller said. "I'm glad I filed it. I'm glad the mayor kept his nose out of it."

Miller's complaint said Goodman did not take disciplinary action against the Crazy Horse Too from 2002 to 2006 because of his connections to the club through his old law practice. It also noted that Goodman received a $40,000 campaign contribution from the club's owner.

Goodman also was the resident agent in the 1980s for the corporation that owns the club.

FULL STORY: http://www.lvrj.com/news/12530571.html

I hope I've made it clear why I don't trust the city to be a "safeguard" to keep the mob from re-gaining control of their criminal enterprise. It seems that Rizzolo's influence pollutes every jurisdiction including Las Vegas City Hall, the State Capitol in Carson City, the office of the U.S. Attorney for Nevada, and the United States Department of Justice.

I'm very concerned that Goodman and Assistant U.S. Attorney Daniel Hollingsworth will welcome anyone who agrees to help Rizzolo and save him from seizure of his hidden personal assets in the event the Crazy Horse sells for less that his $28 million in court ordered debts.

Only persons deeply indebted to Mr. Rizzolo -- or in fear for their lives -- would act in such a way thereby further exposing the public to the brutal method of doing business that's necessary to make enough money to pay such a high price for a shut down topless bar.

Have a MERRY CHRISTMAS and a HAPPY NEW YEAR that hopefully will not include a continuation of this awful story.

Copyright © Steve Miller