Executives at a company that owns strip clubs around the country have been charged with bribing a New York official with free trips to some of the venues and with private dances to avoid paying more than $8 million in sales taxes, authorities said Tuesday.<\/p>\n
Houston-based RCI Hospitality Holdings and its corporate leaders received favorable treatment during at least six tax audits that were performed over a decade in exchange for the perks given to a state auditor, New York Attorney General Letitia James said.<\/p>\n
James alleges RCI gave the auditor at least 13 complimentary trips to Florida, including hotels meals, plus up to $5,000 per day for private dances at its strip clubs, including Tootsie\u2019s Cabaret in Miami. The auditor also received free dances, food and admission at clubs in New York, authorities said.<\/p>\n
\u201cRCI\u2019s executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes,\u201d James said in a statement.<\/p>\n
RCI Hospitality, publicly traded on the Nasdaq composite, owns and operates more than 60 clubs and sports bars and restaurants across the county, including Rick\u2019s Cabaret establishments in more than a dozen cities including New York, according to the company\u2019s website. It also owns two other businesses in Manhattan.<\/p>\n
A 79-count grand jury indictment that was unsealed Tuesday charges RCI, five of its executives and the three clubs in Manhattan with conspiracy, bribery, tax fraud and other crimes.<\/p>\n
Daniel Horwitz, a New York lawyer for RCI, disputed the allegations and said the defendants will fight the charges in court.<\/p>\n
\u201cWe are clearly disappointed with the New York Attorney General\u2019s decision to move forward with an indictment and look forward to addressing the allegations,\u201d Horwitz said in a statement. \u201dWe remind everybody that these indictments contain only allegations, which we believe are baseless. RCI and the individuals involved are presumed innocent and should be allowed to have their day in court.\u201d<\/p>\n
He added that RCI\u2019s policy is to pay \u201call legitimate and non-contested taxes\u201d and all three Manhattan clubs remain open.<\/p>\n
The indictment alleges RCI failed to pay over $8 million in city and state sales taxes on the sale of \u201cdance dollars,\u201d which are purchased by customers and redeemed for private dances.<\/p>\n
In exchange for the bribes, the auditor agreed to assess \u201csubstantially less\u201d in unpaid sales taxes, interest and penalties than was actually owed by RCI\u2019s New York clubs and to stop the state from performing additional tax audits of Rick\u2019s Cabaret, the indictment says.<\/p>\n
James\u2019 office and the indictment did not name the auditor, who worked for the state\u2019s Department of Taxation and Finance. It said that a sixth person who was not publicly named was indicted but not yet arrested. James\u2019 office declined to say whether that person was the auditor.<\/p>\n
Among the RCI executives who were indicted are Eric Langan of Bellaire, Texas, chief executive officer, president and board chairman; and Timothy Winata of Houston, a controller and accountant. Prosecutors allege Langan and other executives authorized and oversaw the bribes, and Winata directly provided the bribes and accompanied the auditor on trips to the clubs.<\/p>\n
According to the indictment, the auditor texted Winata in 2022 saying: \u201cThis was the best trip I had in Florida. The girls were very beautiful and nice.\u201d He wrote that on Thursday night there were \u201cso many beautiful women,\u201d and he had \u201cmany lap dances instead of going to the room.\u201d He thanked Winata and said he hoped for another trip before the summer.<\/p>\n
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