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Former Strip Club Owner Pleads Guilty To Tax Evasion

LAS VEGAS (KXNT) – Maybe he was so distracted by scantily clad women, that he allegedly forgot to pay his taxes.

The former owners of a Las Vegas strip club pleaded guilty Thursday in U.S. District Court in the District of Nevada to evading employment taxes, said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Steven W. Myhre for the District of Nevada.

According to court documents, 58-year old Frederick John Rizzolo of Las Vegas, the former owner of the The Crazy Horse Too, evaded paying more than $1.7 million in employment taxes that he owed for 2000 through 2002. Rizzolo paid The Crazy Horse Too’s floor-men, bouncers, bartenders and shift managers in cash, but failed to provide accurate records of these payments to the Club’s bookkeepers. As a result, Rizzolo caused false employment tax returns to be filed with the Internal Revenue Service (IRS), which under reported wages paid and thus the taxes due.

In 2006, Rizzolo admitted this conduct and pleaded guilty to conspiring to defraud the United States. Following his plea, however, Rizzolo took affirmative steps to conceal his assets and income to thwart the IRS from collecting the delinquent taxes that he owed.

For example, Rizzolo directed $900,000 that he received from the sale of the Crazy Horse Too to an offshore bank account in the Cook Islands. He also withdrew $50,000 from a bank account, writing a check to a third party, who in turn provided the money back to Rizzolo, thereby avoiding an IRS levy and seizure of the funds. Also, Rizzolo lied to an IRS collections attorney, falsely stating that he had no income or assets and no ability to pay the taxes he owed.

Sentencing is scheduled for September 15. If the court accepts the parties’ agreement, Rizzolo will be sentenced to a period of 24 months in prison and will be ordered to pay restitution in the amount of $2,637,290 to the IRS.

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