NEW YORK—New York Attorney General Letitia James, a Democrat, announced on Tuesday the indictment of the parent company of Rick's Cabaret and other strip clubs, as well as five executives, for their roles in a 13-year-long bribery scheme to avoid paying millions in state sales tax.
The parent company of Rick's Cabaret is the publicly traded firm RCI Hospitality Holdings. RCI is traded on the NASDAQ under the ticker RICK. As of this writing, shares in RCI fell by nearly 17 percent in late afternoon trading after the attorney general's office revealed its 79-count indictment.
The indictment seen by AVN accuses RCI executives and several corporate entities of crimes including conspiracy, bribery, criminal tax fraud and other charges.
“RCI’s executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes,” James said. “I will always take action to fight corruption and ensure everyone pays their fair share.”
Of the executives named in the indictment, RCI chief executive officer and president Eric Langan is named as a top-line defendant.
According to James' office, other RCI executives bribed an auditor-supervisor at the New York Department of Taxation and Finance.
He was allegedly bribed with 13 complimentary multi-day trips to Miami, where he was given up to $5,000 per day for clubs owned by RCI, including Tootsie's Cabaret.
Additionally, RCI's controller and accountant, Timothy Winata, allegedly traveled to Manhattan from Texas to provide the auditor with illegal bribes under the guise of inspecting venues that are owned by the parent company. This happened at least 10 times, and took place at Rick's Cabaret, Vivid Cabaret, and Hoops Cabaret and Sports Bar, according to the indictment.
James' office lists all three clubs in the indictment, as well as Langan, Winata, CFO Bradley Chhay, director of operations Ahmed Anakar, and former New York regional manager turned assistant director of nightclub operations Shaun Kevlin.
"A sixth individual has also been indicted but not yet arrested and will be arraigned at a later date. The indictment will remain sealed as to that defendant until they are arraigned," James' office said.
Further, the indictment focuses on RCI's in-house currency known as "Dance Dollars." Customers can purchase Dance Dollars and redeem them for private dances.
"As part of its tax fraud scheme, RCI failed to collect and pay over $8 million in sales taxes on the sale of Dance Dollars," the office added.
"In exchange for the illegal bribes provided to him, the auditor agreed to settle pending and future DTF sales tax audits of RCI’s Manhattan strip clubs for substantially less in back taxes, penalties, and interest than were owed, saving RCI millions of dollars."
