Manhattan District Attorney’s Office formally indicted Scores strip club owners Richard Goldring and Harvey Osher on tax evasion charges Tuesday.
Goldring and Osher pleaded not guilty to diverting $3.1 million in revenue from the pair’s two Manhattan strip clubs into shell companies as part of an effort to avoid paying taxes, the New York Post reported today.
Goldring and Osher were arrested Tuesday along with Osher’s niece 25-year-old niece, Cheryl who served as his bookkeeper and was accused of serving as president of one of the shell companies.
Osher’s attorney George Weinbaum told The New York Daily News that his client did nothing wrong and was relying on advice from “accounting professionals.”
According to the indictment, Scores CEO Goldring, 36, and club Manager Osher, 38, were accused of “flagrant” tax evasion by funneling club revenue into three dummy companies that were fronting as consulting firms. The tow men allegedly used the money to pay for personal items such as a new Mercedes Benz automobile and an estimated $185,000 for Goldring’s $2.2 million mansion he is building.
Manhattan District Attorney Robert Morgenthau told the Post that the two shell companies paid no taxes last year, claiming they had more deductions than income.
Morgenthau added that there are four separate investigations underway on the matter antd that the latest findings may be just the tip of the iceberg.
The Scores Holding Company, which is publicly traded on the Over the Counter Bulletin Board, is also under investigation to determine whether its financial disclosures are correct. The company licenses Scores franchises around the country.
The company was trading 1 cent a share following the arrests. Its 52-week high was 3 cents a share reached on March 3. Its 52-week low was 1 cent a share previously reached on Aug. 25.
Prosecutors are also investigating the use of the clubs’ Diamond Dollars or scrip customers use in exchange for money to pay topless dancers as well as allegations of overcharging of customers.
“There were a lot of corporate people who spent a lot of money at Scores, and this got a lot of attention,” Morgenthau told the newspaper.
Last year, New York newspapers reported that Robert McCormick, then CEO of St. Louis-based Savvis Communications, complained to authorities about receiving a $241,000 bill for lap dances and drinks at the club. He said he had only spent $20,000 there, but was later fired over the flap.
Goldring said that the clubs, located in Manhattan’s East and West sides, would continue to operate as usual. The clubs have attracted many celebrities in recent years, such as Lindsay Lohan, Russell Crowe and Howard Stern.
If convicted, the two men face up to four years in prison and up $400,000 in fines.
Goldring and Osher’s niece were freed on their own recognizance after being booked. Osher, who was on parole stemming from a 2001 money laundering conviction, was released after posting $10,000 bail.
