Stereotypically, strip club owners tend to be portrayed as a bit slimy and underhanded, to say the least. In the case of one Vegas strip club owner, those stereotypes weren't far from the truth. The man in question went full monty on tax fraud by underreporting his income, laundering money, and even hiding cash offshore.
From the Department of Justice press release:
According to documents filed with the court, Frederick John Rizzolo, 58, of Las Vegas, the former owner of 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 floormen, 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 underreported 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. Additionally, Rizzolo lied to an IRS collections attorney, falsely stating that he had no income or assets and no ability to pay the taxes owed.
Sentencing is scheduled for Sept. 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.
Anyone who believes they might one day face allegations that they evaded taxes, failed to pay taxes or engaged in tax fraud can contact tax law attorneys to discuss their circumstances and available legal options. The attorneys at Robert J. Fedor, Esq., L.L.C. represent clients across the nation who face these accusations and other serious charges.