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Strip Club Owner Gets Jail Time For Evading Millions In Taxes

LAS VEGAS (KXNT) – The former owner of a Las Vegas strip club was sentenced Friday to 24 months in prison for evading payment of more than $1.7 million in employment taxes, announced 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.

Frederick John Rizzolo, of Las Vegas, the former owner of The Crazy Horse Too, pleaded guilty in June, to attempt to evade and defeat the payment of employment taxes that he owed for 2000 through 2002.

According to documents filed with the court, Rizzolo paid the Crazy Horse Too’s floor men, bouncers, bartenders and shift manages 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 Club, in Philadelphia, 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 then provided the money back to Rizzolo, thereby avoiding an IRS levy and seizure of the funds. Also, Rizzolo falsely stated to the IRS that he had no income or assets and no ability to pay the taxes owed.

In addition to the term of imprisonment imposed, U.S. District Chief Judge Gloria M. Navarro ordered Rizzolo to serve six months of supervised release and to pay restitution in the amount of $2,637,290 to the IRS.

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