The former owner of The Crazy Horse Too strip club pleaded guilty today in U.S. District Court for the District of Nevada to evading employment taxes.
Frederick John Rizzolo, 58, 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 September 15, 2017.
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.
