Judge sends former strip club owner Rizzolo back to prison for nine months

Former Crazy Horse Too owner Rick Rizzolo is heading back behind bars for thumbing his nose at the judicial system.

U.S. District Judge Philip Pro sentenced Rizzolo on Wednesday to nine months in prison and placed him on two additional years of super­vised release for deceiving his probation officers.

Federal prosecutors sought the extra prison time, alleging the ex-strip club operator had been living a wealthy lifestyle off funds he hid from authorities while failing to pay millions of dollars in restitution to a tourist crippled at the Crazy Horse Too.

Pro added a series of conditions to Rizzolo's sentence to ensure that there is "candor" on his part in his future dealings with probation officers.

Rizzolo will have to transfer his offshore accounts to the United States so that the government can keep track of them. He also will have to find a job after he gets out of prison and report every personal expense to federal probation officials. And he won't be allowed to pursue his passion for gambling.

Pro told Rizzolo, who was observed chewing gum in court, that he made it "next to impossible" for probation officers to supervise him after his April 2008 release.

The judge scolded Rizzolo for paying "very little" of the money he owes Kirk Henry, a Kansas City area man paralyzed after a fight over a bar tab at the now-shuttered Crazy Horse Too in September 2001.

Rizzolo, who declined comment afterward, has until Sept. 14 to surrender to federal prison officials.

In March, Assistant U.S. Attorney Eric Johnson, who led the 2006 criminal prosecution of Rizzolo, charged in court that Rizzolo had concealed from probation officers a series of lucrative financial transactions, including several with offshore trust accounts. Many of the transactions were related to $1 million from the sale of a Philadelphia strip club one day before his release, Johnson said.

Johnson also accused Rizzolo of failing to pay the Internal Revenue Service more than $2.5 million in back taxes. He said Rizzolo owes the IRS $1.7 million stemming from his 2006 plea agreement, plus more than $821,000 from income earned that year.

Last week, Johnson filed court papers, alleging Rizzolo repeatedly lied to probation officials.

"Unless he is faced with, and appreciates, serious repercussions from his conduct, Rizzolo will not comply with his conditions of supervised release and will continue to take advantage of what he perceives as a weakness in the system," Johnson wrote.

At Wednesday's hearing, Pro allowed Las Vegas attorney Stan Hunterton, who represents Henry's wife Amy, to make a pitch for prison time for Rizzolo.

"The first order of business is to send this gangster back to jail," Hunterton said. "It's the only thing he understands."

Hunterton charged that Rizzolo ran "roughshod" over the federal probation system, treating it as if it were a "game of how much he could get a way with."

Hunterton told the judge that he and Henry's Las Vegas lawyer, Don Campbell, were prepared to "go through the gates of hell" to get the more than $12 million with interest that Rizzolo still owes the disabled Henry.

Afterward, Campbell said Pro wasn't "fooled for a minute" by the actions of this "felon and racketeer" and that he was "appreciative" of the sentence the judge handed out.

Campbell said the two attorneys spent several years "hunting down every asset" of Rizzolo's they could find and feel good knowing their efforts forced the government into pursuing the probation violations.

Rizzolo, long suspected of having ties to organized crime, pleaded guilty to a felony tax charge in June 2006 to end a decade-long FBI racketeering investigation. He ultimately served 10 months of a one-year prison sentence.

The Henry attorneys have charged that Rizzolo ducked his responsibility to pay the Henrys, all the while running up $900-plus nightclub and restaurant tabs and maintaining hundreds of thousands of dollars in foreign trusts.

The U.S. Marshals Service took control of the Crazy Horse Too, once a hangout for celebrities, politicians and underworld figures, more than three years ago but could not find a buyer in a depressed real estate market.

Earlier this month, Canico Capital Group, the Southern California investment firm that owns the first deed of trust on the property, bought the club for $3 million at a public auction.

The Crazy Horse Too was said to be worth as much as $35 million when the Marshals Service began entertaining offers.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.