Crazy Horse Too goes into foreclosure Aug 30, 2007 07:28 AM PDT TOP STORY STREAMING VIDEO The infamous adult nightclub, Crazy Horse Too, is now in foreclosure, with the federal government seizing the club from Rick Rizzolo and his associates. As Steve Crupi tells us, the feds are planning to sell the club and use the money to pay millions of dollars to the victims of violence at the Crazy Horse. "The document actually says the whole shopping center has been taken over by the federal government," said Buffalo Jim Barrier. Barrier owns the auto shop next to the Crazy Horse; he's been fighting for years to expose how the Crazy Horse has victimized its customers. Kirk Henry is one of those victims. Rizzolo and his corporation were ordered to sell the club and distribute proceeds to Mr. Henry and others. Former Las Vegas City Councilman Steve Miller says federal prosecutors simply got tired of waiting, and he believes Rizzolo has used all this time to hide millions of dollars from the government. In its foreclosure notice, the government lists three potential buyers for the Crazy Horse, but no deal has been finalized. Rizzolo is serving time in federal prison for tax evasion and racketeering. Prosecutors say his club would routinely over-bill customers, and those who refused to pay would be threatened and beaten up until they paid up.

Through a Federal Grand Jury, we are now learning of some of the ways bribes may have been laundered to him.

Yet to be discovered is an alleged "consulting" fee of $30,000 per month paid to Michael McDonald from a topless bar known as "Pleasures" - another possible way to launder political bribe money. 

Also, it's expected that the favors McDonald did in return for the money will soon to be disclosed. Favors such harassing Buffalo Jim Barrier and others for the eight years he was in office.

Also, information about the City's and McDonald's participation in allowing Rizzolo's 6,000 square foot addition to the Crazy Horse to be opened without building permits, traffic studies, increased parking, or an occupancy permit, and the fact that the addition was built on improperly zoned land may soon be heard by the Federal Grand Jury.

Or McDonald's and Father Dave Casaleggio's participation in the effort to stop the approval of Sapphire Gentleman's Club as a favor to Rizzolo. Casaleggio and McDonald told the Clark County Commission that parishioners at Our Lady of Las Vegas Church didn't want the giant topless bar near their church. But neither McDonald nor Casaleggio spoke up when their friend Rizzolo opened his illegal expansion located one mile closer to the church.

Casaleggio was fired from Our Lady of Las Vegas Church after he testified before the County Commission, and after he marched next to McDonald in the St. Patrick's Day Parade wearing a "Re-elect McDonald" T-Shirt.

After his firing, Casaleggio, through his attorneys Patti and Sgro (surprise!), sued the Catholic Diocese of Las Vegas, and regained his position at OLLV.

His contract expired six months after he was reinstated though, and Casaleggio ended up being relegated to oblivion as the priest at Indian Springs Prison.

That's not all!

Did golf course developer Billy Walters pay McDonald to convince the City to sell him 80 acres of taxpayer owned land for $5,600 per acre when the land was valued by the county assessor at over $30,000 per acre?

And then there's Silver State Disposal. What did McDonald receive for ramming through Silver State's $1.5 billion dollar franchise renewal without competitive bids five years before the contract was due to expire?

And now, Mayor Goodman is anxious to sell his protégé acres of taxpayer owned land for a song, possibly in exchange for McDonald doing Goodman law firm clients Rizzolo and Walters favors.

The proof is in the pudding - McDonald's one acre $2 million dollar estate at 2520 Pinto Lane.

How did an ex-cop with little education become a multi-millionaire after only eight years on the LV City Council?

A priest, a topless club owner and a politician.

It sounds like a set-up for a joke, but the Rev. Dave Casaleggio wasn't laughing when he was called to testify before a grand jury three weeks ago about his unusual friendships.

Casaleggio, who counts Crazy Horse Too owner Rick Rizzolo and former Las Vegas City Councilman Michael McDonald among his close friends, was questioned by federal prosecutors about $30,000 he loaned to McDonald more than four years ago.

In June, he (McDonald) was back in the Las Vegas City Council chambers. The council agreed to sell city land to his company for $6.5 million, millions of dollars less than it is worth.

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                                                  (Las Vegas Review-Journal photos)
Steve watches as Councilman Michael McDonald is questioned by State Ethics Commission on
favors he did for Republic Silver State Disposal. Following the meeting held in 2000, McDonald
expresses anger after the Commission found probable cause to prosecute him based on
Steve's complaint.
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Bart Rizzolo is inside the Crazy Horse Too

 

At 2:30 PM Thursday August 30, 2007, Bart Rizzolo, Rick Rizzolo's father, was observed entering the forfeited Crazy Horse Too.

 

On Wednesday, when Federal Marshall's delivered Seizure Notices to tenants, Buffalo Jim Barrier was informed that "The Rizzolos are locked out."

 

However, the doors to the building were not chained shut by the Marshals allowing the elder Rizzolo to sneak in. At 3;20 PM, Rizzolo was reportedly still inside the building.

 

Federal officials were alerted, but Rizzolo left the property before officials arrived. It's not known whether any seized property was removed during the illegal entry.

Then there's this:

Weeks after Rick and Lisa Rizzolo's 2005 bogus divorce, Lisa went to the law firm of Lionel Sawyer and Collins and established the "Lisa M. Rizzolo Separate Trust."

Before the ink could dry on the new Trust, according to Clark County records, Lisa put a new mortgage on the couple's Canyon Gate Golf Course estate. It's believed that she did the same on the couple's Newport Beach estate, and their lake front condo in Chicago to extract all the equity to avoid government seizure.

It's suspected that this scheme was the work product of the Rizzolo's attorneys Dean Patti and Tony Sgro.

In the meantime, Rick, during the time he was participating in plea negotiations with the Feds and after beating victim Kirk Henry had filed a lien lis pendens on the Crazy Horse, somehow obtained a second mortgage on the topless bar for around $5 million dollars. He then took the money in cash and hid it according to an FBI report to U.S. Federal Court Chief Judge Philip Pro.

How a legitimate title company could have missed the Henry lien, or how a bank could make such a loan on a clouded title is a mystery to me. The title company and lender are being closely looked at by an investigator commissioned by INSIDE VEGAS, and the results will be published in an upcoming column.

But that's not all. I just learned that in the spring of 2007, Rizzolo's lawyers Patti and Sgro also placed a lien on the Crazy Horse Too. The amount they claim Rizzolo owes them is not known.

Altogether, the Crazy Horse Too is encumbered for over $28 million so far including Henry's $9 million lien plus interest, the IRS $4.5 million plus interest and penalties, the City's $2.3 million lien (on appeal to the Nevada Supreme Court where Judge Saitta will rule on the lien's validly), and Buffalo Jim Barrier's $1 million dollar lien.

Rizzolo paid $5.5 million for the property on March 22, 2002. Considering appreciation and the Consumer Price Index, the value of the shuttered bar and land is worth no more than $8 - 10 million today according to qualified sources, especially now that the Nevada Department of Transportation plans to take a 23 foot deep swath of the complete frontage for a road widening.

The Feds will soon learn that there is no money available to pay Rizzolo's debts even if they could find a buyer stupid (or crooked) enough to buy the Crazy Horse for over $28 million -- a buyer who doesn't mind being extorted by limo, van, and taxi drivers $30 - $70 per passenger for bringing customers -- a quasi-legal practice started by Rizzolo in the late 90's that's bringing other topless bars to their knees.

Also, according to City of Las Vegas Ordinance 19.16.030 (3:) Discontinuation of Use. "If a non conforming use of a conforming building is discontinued for a period of one hundred eighty days.... the future use of such building shall be only in conformance with the provisions of this Title."

 

In other words, the Crazy Horse closed on June 30, 2007. If a new liquor license is not issued by January 1, 2008, the adult use zoning that was grandfathered for Rizzolo will revert to the present zoning that prohibits adult use at that location. It normally takes six months for a new applicant to go through the investigative process to obtain a liquor license with adult use. Sixty of the allowed one hundred and eighty days have elapsed, and there is no application for a new liquor license pending at City Hall.

 

Meanwhile, Rick and Lisa Rizzolo, along with their divorce lawyers Dean Patti and Tony Sgro have insulted the Federal Court by openly hiding assets. It would not surprise me if Mrs. Rizzolo is soon indicted, and her husband's stay at the Los Angeles Federal Detention Center is extended for trying to defraud the United States Government - again.

 

Messrs. Patti and Sgro may also find themselves sharing accommodations with their best client when the dust settles in Judge Pro's court room, especially it they're subjected to a polygraph and asked where the Rizzolo's money went?

 

I don't believe that being involved in fraud falls within lawyer-client privilege, but I could be wrong.

 

My heart goes out to the family of Kirk Henry. It doesn't look like their ongoing medical or legal bills will be paid in the foreseeable future.

 

And to their attorneys Don Campbell and Stan Hunterton: you were duped into supporting the licensing of Rizzolo's straw man who obviously kept the skim going for ten months while the Rizzolo's were refinancing their homes and hiding the cash backs. You should have insisted that the forfeiture take place immediately after Rick Rizzolo was sentenced. Now you're up the creek with no way to get paid for thousands of billable hours.

 

It looks like the Crazy Horse is finally dead, and the Feds have no appetite for operating another adult business after the humiliation they suffered trying to operate the seized Mustang Ranch brothel in order to maintain its value. Now the Crazy Horse Too saga is looking too similar to that of Joe Conforte who played trick after trick on the Federal Court and the IRS to keep his Mustang Ranch open under straw men and women until he could secure refuge with his millions in Argentina where he remains today.

Based on Conforte's example -- an example that may be Rizzolo's road map to keeping his ill-begotten riches -- upon his release from prison in April, Rick Rizzolo and his cash may also seek refuge in a country that does not have extradition.

 

Otherwise, the only revenge that may eventually be enjoyed by the citizens of Las Vegas in exchange for the hundreds of robberies and beatings, the crippling of Kirk Henry, and the deaths of Rick Sandlin and Scott David Fau, will be the lengthening of Rick Rizzolo's sentence for twice cheating the taxpayers and lying to Judge Pro; and the incarceration of Lisa Rizzolo, Dean Patti and Tony Sgro. That's if the Federal Court drops the hammer immediately before any more shenanigans can occur.

Based on all the leins on the Crazy Horse, the refinancing of their three houses, and the missing cash, it sure looks like the Rizzolo's have gotten the upper hand and made a fool of the government of the United States of America. But at least the beatings and killings have stopped, and that's certainly a cause for celebration.

I am not one of those who likes to brag "I told you so!" But because everything I've predicted about this story since 1999 has so far come true, I can no longer contain my self.


      (LV RJ photo by Clint Karlsen)                                 (AmericanMafia.com photo by Mike Christ)

I TOLD YOU SO!!!

Copyright © Steve Miller