Rick Porrello's - AmericanMafia.com - Steve Miller

Rizzolo could be in contempt of court
New RICO lawsuit claims Rick Rizzolo still runs the Crazy Horse.
A Federal Court Judge may throw the book at him and put the
building and land on the auction block after three buyouts
were squelched in favor of a straw man with no money.

INSIDE VEGAS by Steve Miller
AmericanMafia.com
December 26, 2006

LAS VEGAS - It always amazes me when a big story hits just days before Christmas. I've come to the conclusion that scammers use this time to try to pull fast ones because reporters and honest public servants are usually on vacation and don't want to pay much attention to negative stuff this time of year.

My untimely story asks the question -- What's the value of a mob run topless bar in the seediest part of Las Vegas? Is it worth an amazing $40 to $48 million after its owner and sixteen employees were convicted of racketeering, and beating up customers who refused to pay inflated credit card tabs? A brand new Federal RICO law suit really opened a can of worms the week before Christmas.

The law suit begs the question -- Are the same La Cosa Nostra folks who Rick Rizzolo fronts for the ones now backing one or more investors who want to buy his broken down topless bar? And do the men who represent the investors know who their investors really are?

Former Crazy Horse boss Vinney Faraci is the son of "Johnny Green" Faraci, a notorious Bonanno family capo. New York organized crime experts have said Vinny is a made guy.

And then there's former Crazy Horse boss Rocco Lombardo, the brother of Chicago outfit boss Joey "The Clown" Lombardo.

It's no mere coincidence that upstanding citizens like this want to continue running the Crazy Horse Too. Therefore, any buyer who comes forward should receive a complete background check to see if he is being used as a "Mr. Clean Face" for such interests with or without his knowledge.

The method they use is called a "Daisy Train." It means that the same guys that now own the Crazy Horse pretend to be investors in a new group and get an unsuspecting, or complicit general partner to make the offer on their behalf without having to disclose their involvement. In Nevada, this can be done through a Limited Liability Corporation that does not have to reveal names of investors.

Rick Rizzolo and Rocco Lombardo

Rizzolo keeps bragging he's not going to prison in January, and to prove his point, he's repeatedly seen partying and gambling on the Strip while he awaits his protracted sentencing hearing.

Rizzolo may be right because he's a "whale," a term that means million dollar player. Whales are a protected species in Vegas, and Rizzolo has connections all the way to Washington D.C. that may be running legal and political interference for him. If he goes to prison, the goose stops laying golden eggs, and that doesn't go over well with casino operators, especially those with deep pockets regularly tapped for campaign contributions during national elections.

To give you an idea of how ridiculous the Crazy Horse purchase offers have become, when New York based Scores bought the brand new 25,000 square foot Jaguars Gentleman's Club in February 2006 for $25 million, no one questioned the price tag.

The building was less than two years old and located near a major intersection on Desert Inn Road in a better part of town. The only difference was that the seller, Jack Galardi, did not have hidden partners or a reputation for crippling or killing his customers.

Now there's an inexplicable feeding frenzy over the least attractive topless bar in Sin City -- the blood soaked Crazy Horse Too. Why, when the latest $45 to $48 million supposedly being bid could buy just about any other club in town -- one with a permanent liquor license, better location, and a clean reputation?

I smell a fish, or could it be a daisy?

Is there a ruse underway to artificially inflate the Crazy Horse's value to discourage the Federal Court from putting it into receivership? Or is the exaggerated value being used to convince the City Council and Federal Court that it's too valuable to shut down, and to let it stay open to continue its M.O. of drug sales, prostitution, and extortion?

Either way, the huge amount of money now being offered for the Crazy Horse may involve a daisy chain of present owners who -- on paper -- can offer and pay any amount to stay active in their criminal enterprise because the price doesn't matter when cash is not intended to change hands. The only thing that would change is the name of the front man, and he probably doesn't even know who his investors really are!

In the real world, the Crazy Horse building and real estate is worth more in the neighborhood of $10 million, and that's a very generous estimate. Unfortunately, if the place sold for market value it could not cover all the debts Rick Rizzolo has incurred including legal fees owed to two of our town's most prominent attorneys who represented beating victim Kirk Henry.

This might be the real reason public officials are allowing one of the biggest scams in Vegas history to go on and on and on. Attorneys Donald Campbell and Stan Hunterton want to get paid for the great job they did for Henry who's family has devastating medical bills, and it would take too long to seize and liquidate Rizzolo's personal assets to pay their fee, the Henrys, and the IRS - total $17 million. Therefore the sale of the club got the nod in Federal Court to facilitate the quickest relief of debt.

Knowing this, Rizzolo conveniently divorced his wife and transferred all his assets to her during the Federal investigation. However the court can reverse this transparent legal ploy in the event the club does not bring enough money through a sale. Lisa Rizzolo, Rick's ex, is suspected of harboring much more money than needed to settle her former husband's obligations. But this could involve lengthy litigation, so the quick fix was chosen: sell the Crazy Horse ASAP, but don't look too closely at the buyer.

How can this happen? Remember, this is the town that repeatedly elects a former (?) mob lawyer as its' mayor, and Mayor Oscar Goodman has close ties to Rizzolo and several of his associates.

Everyone in town wants Kirk Henry to get the ten million Rizzolo promised him (and his lawyers), but no public official has the guts to require casinos to open the safe deposit boxes Rizzolo keeps in cashier's cages up and down the Strip. Whales are known for keeping their cash in these boxes feeling it's safer than a bank, and away from the IRS and FBI's prying eyes.

It's obvious Rizzolo, 47, has no intention of paying his monetary debts, or his debt to society for that matter. His attorneys also plead that his current health won't allow him to serve prison time -- that's if he's really sick? But he continues burning the candle at both ends. More on that later.

A reliable source told me that Rizzolo has struck a deal with his buddies at City Hall to give him an extraordinary $7 million for a 23 foot deep slice expected to be taken by eminent domain from the front of his property for a road widening. That's an outrageous price for a sliver of Industrial Road frontage. The ridiculously high purchase offers by supposed buyers may have inspired such an over evaluation by the City Public Works Department, or it might just have been a nod from the Mayor that inspired the $7 mil. Nonetheless, the taxpayers could take it in the shorts if nobody pays attention.

The 26,000 square foot Crazy Horse is located amid a tangle of power and telephone lines on 2.65 acres next to a noisy overpass and the Union Pacific main line. Recent soils tests indicate that vibration from passing trains would limit the height of any new structure to a few stories, and then there's the eminent domain threat that could reduce the acreage. Under these circumstances, how can anyone reasonably offer $45 - 48 million?

To his dismay, Rizzolo also has three years remaining on a 43 cent per square foot lease to a funky auto garage located right next to his club's main entrance. The garage is owned by stubborn ex-pro wrestler Buffalo Jim Barrier who has become a local folk hero for refusing to move in the midst of threats and harassment from his landlord Rizzolo who wants to expand into his space.

Barrier is so popular that the Las Vegas Review Journal just hired him as a columnist. Whoever buys the Crazy Horse automatically inherits the garage and its burly owner until his lease expires in 2009 whether they like it or not.

And to add insult to injury, the Crazy Horse has a billboard overhead advertising a competitive nearby gentleman's club!

It just seems Rick Rizzolo can't get no respect.

So why would anyone want to buy such a place for so much, especially when it's operating under a temporary liquor license?

Last June, U.S. Federal Court Chief Judge Philip Pro ordered the Crazy Horse be sold by June 2007, or a receiver would be placed to liquidate the building and property.

Meanwhile, without requiring a financial statement, last October the Las Vegas City Council granted a six month temporary liquor license to a man who has gone bankrupt twice in fifteen years and was found financially unqualified to purchase the Riviera Hotel.

With this background, Mike Signorelli was described to the City Council as a successful gaming entrepreneur who was about to purchase a Strip hotel after successfully building and operating a casino resort in Mesquite. The Council asked no questions, and nothing was volunteered regarding the Mesquite casino's bankruptcy and subsequent class action law suit claiming Signorelli stole health insurance premiums from his employees. Also, no information was presented about the Riviera discarding Signorelli's unsubstantiated offer.

Signorelli's only qualification was that he owns a steak house where he and Rizzolo have been seen drinking together for many years. But his attorney told the Council that the two men had only known each other for two weeks.

The Council members just sat there looking dumb while being lied to.

Then, as if guided by an invisible hand, the Council seemed to dutifully vote to grant the license with a stipulation no member of the Rizzolo family step foot on the property. No one asked Signorelli to prove the origin of the $400,000 a month rent he purportedly agreed to pay, or the $45 million he said he offered for the club. The Council became a laughing stock over their acceptance of Signorelli's less than provable worth and refusal to identify backers.

The Council would probably have reacted the same to any other applicant who stepped up to the podium with the City's Director of Business Activity by his side. Ask no questions about partners or financial backers -- require no financial statement -- just take the word of Business License Director Jim DiFiore that the applicant standing next to him is qualified.


           Mike Signorelli and Jim DiFiore
           (AmericanMafia.com photo by Mike Christ)

Soon after he re-opened the shuttered bar, Signorelli was brought back before the Council to prove the accuracy of suspicions he was a straw man.

Buffalo Jim Barrier informed the Council there were three members of Rizzolo's immediate family working in the bar as key employees in violation of City Council and court orders. When asked at a special Council hearing to explain why they were still employed, Signorelli nervously claimed he did not know that his general manager, assistant manager, and bookkeeper's last names were Rizzolo -- and the Council bought his story!

However, they did timidly ask him to remove all remaining Rizzolos from his payroll and keep them off the property. He agreed, but that didn't stop Annette Rizzolo from immediately violating the Council's order by sending garage owner Barrier a notice she signed as property manager.

During the past two years, three other buyers were rejected by Rizzolo, but only one had verifiable personal assets. He told INSIDE VEGAS that conditions were placed on him that he must employ former Crazy Horse bosses, or his offer would be rejected.

In last week's Federal RICO lawsuit, the plaintiff describes Rizzolo telling him that Signorelli has no money and has never paid a cent in rent, and that Rizzolo never intended to get paid by Signorelli. The plaintiff also said he was asked to joint venture with Rizzolo and Signorelli, and employ persons of their choosing.

Because Rizzolo is no longer allowed near an adult business, the buyer rejected the illegal offer and filed his suit against Rizzolo and Signorelli for trying to defraud him.

The law suit is part of the public record so it will now be interesting to see if the City Council requires Signorelli to produce canceled rent checks when they bring him back for a scheduled three month review in January. It will also be interesting to see if Judge Pro throws the book at Rizzolo for contempt of court, and puts the Crazy Horse on the auction block like he should have done last June?

At auction, the Feds can scrutinize the buyer and his backers, and it's certain the price will be much less than what's currently on the table. If any of the current bidders are for real, this should be very inspiring and they should be shouting for immediate liquidation instead of increasing their bids to the current Mob owners.

The first rejected bid occurred in 2005 when San Francisco based real estate developer Luke Brugnara offered Rizzolo $40 million. The second came from Stuart Cadwell, co-owner of Spearmint Rhino. Cadwell purportedly offered $45 million for the club, but he disappeared when it was revealed his business partner was a felon -- something the Federal Court forbid.

In the meantime, the asking price of the club kept skyrocketing even though not one cent changed hands -- similar to insider trading on Wall Street.

Now a Miami based businessman is suing Rizzolo and Signorelli for allegedly breaching a $48 million buy out after Rizzolo reportedly signed a purchase agreement.

Here's a link to his fascinating 19 page lawsuit filed Friday, December 15, 2006.

In the suit, Plaintiff Tommy Karas accuses Rizzolo and Signorelli of plotting to squelch his deal if he didn't agree to include Rizzolo as a silent partner. This, if true, would indicate Rizzolo is thumbing his nose at Judge Pro's order he never be associated with the topless bar industry for the rest of his life.

Therefore the contempt of court possibility coming weeks before Rizzolo is scheduled to be sentenced on January 16. Not a wise move on Rizzolo's part!

When the supposed feeding frenzy began, real estate experts and other club owners (I must disclose that I am the landlord of Club Paradise) were shocked at the numbers. It's well known locally that anyone could buy a much better, larger piece of land and build a palace for half what's been offered for the Crazy Horse.

Treasures is a palace. Built in 2004 amid heavy opposition from Rizzolo and his sycophants at City Hall, the 25,000 square foot club cost $30 million. It's in a superior location nearer the Strip, and includes a gourmet restaurant and art collection. But soon after its' completion, DiFiore was there citing dancers for alleged acts of prostitution. None were convicted, but he asked that the club be closed nonetheless. The owners sued the City and soon re-opened.

The interior of the Crazy Horse was described as a "toilet" by several FBI agents who raided the place in February 2003. "You should have seen it when the lights went on. It was filthy," one agent told INSIDE VEGAS. "They spray perfume to cover the stench."

In response to the Karas law suit, Jeff German, senior investigative reporter for the Las Vegas SUN, wrote, "Just weeks before his sentencing on tax evasion charges, Crazy Horse Too landlord Rick Rizzolo has been hit with a federal lawsuit charging that his leasing of the topless club to restaurateur Mike Signorelli is a ruse designed to allow Rizzolo to continue calling the shots."

In a follow up article on December 22, German reported, "Concerned over allegations they may have been duped into agreeing to a deal that conceals the true ownership of a popular topless club, Las Vegas City Council members said Thursday that the charges could prompt them to reconsider their decision."

But German left one question unanswered: Why would anyone in their right mind pay $45 or $48 million for a "toilet?" Rizzolo bought the building and land from his former landlady Renata Schiff for $5.5 million in 2002, and he was criticized for over paying at the time. What's happened since to raise the ante?

The buyer's feeding frenzy inspired me last Friday to send this e-mail to each member of the City Council:

To contact COUNCILMAN ROSS, please complete the form below and click Submit.

Your name:	Former Councilman Steve Miller
E-mail address:
Subject:
Comments: * required field (4000 character limit)	Because of newly postured information regarding Rick Rizzolo's (LCN) desire to maintain control of the Crazy Horse Too in spite of Judge Pro and the City Council's orders, every effort should be made by the City Council to inspire the Federal Court to liquidate the business and property as soon as possible. This will require the removal of the current straw man purportedly running the enterprise. At auction, all bidders must prove financial wherewithal. This will end any speculation that La Cosa Nostra interests are manipulating the process by making false offers (three times in excess of the club's worth), to artificially inflate the club's value and delay liquidation to allow Rizzolo et al, to stay in control. - SM

"Because of newly postured information regarding Rick Rizzolo's (LCN) desire to maintain control of the Crazy Horse Too in spite of Judge Pro and the City Council's orders, every effort should be made by the City Council to inspire the Federal Court to liquidate the business and property as soon as possible. This will require the removal of the current straw man purportedly running the enterprise. At auction, all bidders must prove financial wherewithal. This will end any speculation that La Cosa Nostra interests are manipulating the process by making false offers (three times in excess of the club's worth), to artificially inflate the club's value and delay liquidation to allow Rizzolo et al, to stay in control. - SM"

This story has stolen a day from my own holiday, and I kind of regret having to tell it during this special season. I hope hearing about Las Vegas' dark side during the Holidays doesn't bum you out. If so, I apologize. But there is so much more!

In the end, "Operation Crazy Horse," as the FBI refers to it, could incriminate our Mayor, a former Councilman, and a Nevada Supreme Court Judge. I sure hope what I'm telling you is just the tip of the iceberg because Las Vegas deserves much more on the part of the Feds.

It's unfortunate, but in past years investigations such as this were cut short by ambitious FBI agents and Federal Prosecutors who learned they could gain lucretive positions working for Strip casinos if they backed off. Some did and are now employed on the Strip. Remember, no casino owner wants to kill a whale.

Have a great New Year! And it you're a straw man reading this column, don't get too close to those Christmas candles.

PS: Rick Rizzolo's attorney has told the judge his client was too sick to attend his sentencing. This excuse has gotten the sentencing postponed on two occasions and let the convicted felon binge through the Holidays. Last week at his regular Monday night party at Piero's, Rizzolo told several sources that Steve Miller was lying in these columns by saying he's sick. He put it this way, "Tell that lying M - - - - - F - - - - - I'm not sick!"

OK, I stand corrected. Now tell the judge....

Copyright © Steve Miller