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Inside Vegas - Steve Miller

Steve Miller is a former Las Vegas City Councilman. In 1991, the readers of the Las Vegas Review Journal voted him the "Most Effective Public Official" in Southern Nevada. Visit his website at:

Rick Rizzolo's new legal defense team:
"Spud," and "The Ticket Fixer"

Justice delayed, is justice denied. - William Gladstone

INSIDE VEGAS by Steve Miller
October 12, 2009

LAS VEGAS - On Wednesday, October 7, United States Magistrate Judge George Foley held an abbreviated hearing to decide whether convicted racketeer Rick Rizzolo and his "jail house lawyer" James Kimsey, alias "Spud," should be charged with Contempt of Court.

According to the Las Vegas Review-Journal, lawyers for unpaid beating victim Kirk Henry who is suing Rizzolo and his ex-wife Lisa for $9 million dollars that Rick had agreed to pay him in exchange for a light prison sentence, say they have racked up $260,000 in legal fees while responding to frivolous motions from Rizzolo and Kimsey (Spud).

Court observers suspect that the flood of paperwork is a ploy to extend the case until Kirk Henry passes away from his injuries sustained in October 2001 when one of Rizzolo's managers broke his neck for complaining about a padded bar bill at Rizzolo's now-defunct Crazy Horse Too topless bar just off the Las Vegas Strip. Henry was rendered a quadriplegic from his injuries and has mounted up millions in medical bills since. Sadly, Kirk Henry was only one of many who suffered similar fates at the hands of Rizzolo's goon squad.

Rick Rizzolo while claiming to be acting as his own Pro Se attorney signed sixteen Motions that were actually authored by Kimsey who has no legal training. Rizzolo never revealed to the court that he was not the actual author. His most recent Pro Se Subpoena authored by Kimsey (Spud) was filed on October 6, the day before Rizzolo and Spud were scheduled to appear at their Contempt hearing. Rizzolo's (Spud's) outrageous Subpoena was intended to compel Henry's attorneys Stan Hunterton and Don Campbell to testify against their own client at a Deposition to be conducted by Rizzolo. But the Subpoena is expected to be quashed by the Federal Court within the next week or two because attorneys cannot be compelled to testify against their clients.

On September 17, 2009, a legitimate Subpoena was filed  in U.S. District Court commanding Spud to appear and testify on Wednesday, October 7. Spud (Kimsey) could not be located for service of the Subpoena -- until the day of the hearing.

Kimsey has prior felony convictions including perjury and the unlawful practice of law.

"They (Henry's attorneys) suggested that the relationship between the two felons violates the conditions of Rizzolo's release from prison... Rizzolo's probation officer, Eric Christiansen, allowed him to have the relationship with Kimsey." - Las Vegas Review-Journal, Oct. 9, 2009

According to an eye witness, when licensed private investigator David Groover approached Spud to serve him on the Federal Court House steps, Spud attempted to run away, but Groover shoved the papers under Spud's arm and loudly announced in front a number of observers including two Federal Court Marshals, "You have been served!"

In the meantime, Spud and Rick's hearing had already begun. At the hearing, Rizzolo's latest addition to his legal defense team, Kenneth G. Frizzell, III, alias "The Ticket Fixer," made his first appearance. Unfortunately, Judge Foley had not been informed that Rizzolo had hired a licensed attorney who specializes in traffic court cases to represent him, and made that clear in his Order filed later that day:
Full docket text for document 209:
MINUTES OF PROCEEDINGS - Hearing on Plaintiff's [184] Motion to Reveal Pro Se Litigant Rick Rizzolo's Ghost Writer held on 10/7/2009 before Magistrate Judge George Foley, Jr. Crtrm Administrator: Donna Smith; Pla Counsel: C. Stanley Hunterton, Donald Campbell, Jack DeGree; Def Counsel: Ken Frizzell; Court Reporter/FTR #: 2:03:46-3:19:47; Time of Hearing: 2:00 p.m.; Courtroom: 3A; 
The Court notes the docket does not reflect Mr. Frizzell's appearance as counsel for Mr. Rizzolo. Mr. Frizzell represents appearance paperwork has been filed. The Court makes preliminary remarks and hears the representations of counsel. Plaintiff's [184] Motion stands submitted. The Court will issue a written decision. (Copies have been distributed pursuant to the NEF - DES)Wednesday when Rick Rizzolo is brought before Federal Magistrate Judge George Foley on a Contempt Motion. 

It looks like The Ticket Fixer's sudden appearance in Federal Court frazzled Judge Foley, and in addition to Spud's no-show, may end up being reflected in the judge's written decision expected sometime this week.

But Frizzell's appearance and Spud's absence may not be all that frazzles Foley. Plaintiff's attorney Don Campbell filed this Declaration soon after Wednesday's hearing, a Declaration that might indicate that Rick Rizzolo considers Henry's lawsuit nothing more serious than a simple traffic ticket!

According to the Sept. 4, 2008, Las Vegas Sun, "Officers from Boulder City, Henderson and Metro police roamed Boulder Highway and were armed and wary along the route of a 50-mile poker run sponsored by the Las Vegas chapter of the Hells Angels. Members of the SWAT teams were stationed in the old World War II bunkers above Hoover Dam, poker run organizer James Kimsey said."
Courtesy of an INSIDE VEGAS reader:

James Kimsey
c/o: Lone Wolfs Motorcycle Corporation Inc
8174 S Las Vegas Blvd
Las Vegas, NV 89123

The day after the brief Contempt hearing, Frizzell The Ticket Fixer filed a  Motion to try to disqualify Kirk Henry's attorneys who have financed the prosecution of this case since 2001.

In light of all this tomfoolery, it's now up to Judge Foley to rule whether Rizzolo and Spud are in Contempt of his and Presiding Judge Philip Pro's courts.

Or is Rizzolo, et. al., just trying to find every way possible to stall this case until Mr. Henry passes, or accepts a much reduced settlement?

As the final straw, on Friday, Spud (Kimsey) filed another amazing Motion; this one he calls "OBJECTION TO SUBPOENA."

It claims that he's only "an interested party," and including him in these proceedings is a violation of Rick Rizzolo's First Amendment rights, and is nothing more than harassment.

If this was not enough to infuriate the Federal Court, Rick's ex-wife Lisa filed a Motion on Thursday trying to force Kirk Henry's attorneys to sue the mob lawyers who previously worked for the couple including Tony Sgro, John Dawson, and Dean Patti. This could cause the case to suffer further delays, and cost Henry additional legal fees to be taken from his settlement, and many believe that's Lisa's intent.

But in the meantime, Lisa may soon face her own problems with the Internal Revenue Service for not disclosing her and her ex-husband's off shore accounts, accounts set up to try to hide their assets from Kirk Henry and the IRS.

"Tax regulations are complex, but in this area the law is simple: U.S. citizens must report all foreign financial accounts in excess of $10,000. Willfully failing to report can result in a felony conviction and a penalty of up to 50 percent of the amount in the foreign account. 'Offshore accounts harbor billions of dollars, and people should take notice that the secrecy surrounding these deals is rapidly fading,' IRS Commissioner Doug Shulman said in 2008." - John L. Smith, Las Vegas Review-Journal, 10/11/09

On June 5, 2009, the Deposition of Lisa Rizzolo was filed in U.S. District Court. Here are excerpts from that Deposition:

Attorney Don Campbell: This is your 2005 tax return.

Lisa Rizzolo: Okay.

Campbell: It says - it asks you a question: "At any time during 2005, did you have an interest in or signature or other authority over a financial account in a foreign country; such as a bank account, securities account, or other Financial account?" And you answered, "No." Correct?

Rizzolo: I didn't fill out these forms, so.

Campbell: This is your return?

Rizzolo: Exactly.

Campbell: Let's go to the next question. It asked for the name of a foreign country. There is nothing listed there, right?

Rizzolo: Right.

Campbell: Okay. Number 8. "During 2005, did you receive a distribution, or were you the grantor of, or transferor to a foreign trust?" And you had ''No" there right?

Rizzolo: That's what's marked.

Campbell: Okay. And the tax return [2006] that you filed with the Internal Revenue Service stated that you did not have any interest or signature or other authority over a financial account in a foreign country right?

Rizzolo: That's what its marked, uh-hum.

Campbell: And that it doesn't have the name of any foreign country there, correct?

Rizzolo: That's correct.

Campbell: And moreover, when asked if there was a distribution or whether you are a grantor of or transferor of a foreign trust, your tax return indicated once again in the negative, right?

Rizzolo: That's what it says.

Campbell:  And calling your attention once again to [2007] tax return -

Rizzolo: Uh hum.

Campbell: ...foreign accounts and trusts, correct?

Rizzolo: Right?

Campbell: And again under 7a, calling for disclosure of any interest you had in a financial account in a foreign country, you said "no," right?

Rizzolo: "No" is marked there.

Campbell: to the identification or the name of any foreign country, there is nothing listed there correct?

Rizzolo: Right.

Campbell: And with respect to the as to: "Did you receive a distribution or were you a grantor of a foreign trust?" You again said "no," correct?

Rizzolo: That's what is marked there.

The Trustee of the foreign account being discussed in the Deposition is John Dawson, an asset protection attorney with Lionel Sawyer & Collins, and brother of Federal Court Judge Kent Dawson. John Dawson is also the Resident Agent for Rick Rizzolo's corporation The Power Company, and was responsible for setting up a number of shell corporations and off shore accounts to hide ("Protect?") the Rizzolo's cash from seizure.

Many believe that Ms. Rizzolo and Mr. Dawson are culpable in an illegal scheme to conceal money from debtors.

"Willfully failing to report can result in a felony conviction and a penalty of up to 50 percent of the amount in the foreign account."

And, what kind of a husband (ex-husband) would put the mother of his children in such a perilous legal position?

This topic was thoroughly covered in an earlier INSIDE VEGAS.

An unresolved personal injury case lasting from October 2001 through October 2009 clearly proves that "Justice delayed, is justice denied." And who should be held responsible for unreported assets hidden off shore from court ordered creditors? The debtor Lisa Rizzolo? The Trustee ("Protector") John Dawson? Or both?

But, that's not all!

As if this story couldn't get any more bizarre, the Las Vegas Review-Journal reported on September 25, 2009 that a mystery buyer from Chicago just announced that he's purportedly buying the Rizzolo's shuttered Las Vegas Crazy Horse Too topless bar -- the place where Kirk Henry's neck was broken eight years ago.

The purported buyer, Chris Candotti (photo on left), is supposed to be a very successful entrepreneur with plenty of cash and is not supposed to be connected to the Rizzolos in any way. (Rick Rizzolo had for years been affiliated with a second Crazy Horse Too located in Chicago.)

Condotti (39) is dealing with the same federal officials who several years ago tried to keep the names of prospective Crazy Horse buyers secret. On August 13, 2007, Assistant U.S. Attorney Daniel Hollingsworth informed the Federal Court: "The general public should not be allowed to know the proposed offers, the proprietary information, etc., since Rizzolo will select one to see it will complete the sale. If it fails, Rizzolo will select the next one."

INSIDE VEGAS later revealed that the buyers Hollingsworth tried to keep secret all had ties to Rick Rizzolo.

                                     photos by Mike Christ

Condotti is rumored to be offering much more than the shuttered night club and its property is worth; enough to pay most of Rick and Lisa Rizzolo's debts including debts that Federal Judge Philip Pro ordered be paid in the following order of priority:
All of the United States Marshals Service's costs, expenses, and private counsel's attorney fees for the real property transaction related to the care and the sale of the Property and the Trademark and Trade name Crazy Horse Too, including but not limited to the maintenance, the protection, the repair, the service of process, the publication, the utilities, the insurance, the CB Richard Ellis real estate commission, the escrow, the closing costs, the real estate transfer tax, private counsel's attorney fees for the real property transaction, etc.; 
The Clark County Taxes owed on the Property with penalties and interest 
The City of Las Vegas sewer lien 
The Security Pacific Bank ($5 million dollar) loan with attorneys' fees, penalties, and interest 
The restitution of US $9,000,000.00 plus interest to Kirk and Amy Henry 
The restitution of US $1,734,000.00 plus accruals to the IRS 
The assessment of US $500.00 plus interest 
The fines of US $750,000.00 plus interest 
The forfeiture of US $4,250,000.00 plus interest 
The City of Las Vegas judgment lien of US $2,192,000.00 plus interest 
The IRS tax lien against Rizzolo for the 2006 individual income taxes of US $1,032,535.26 plus accruals 

Note that a $5 million dollar debt to Security Pacific Bank is listed ahead of Mr. Henry's. The California bank went belly up soon after making the suspicious loan, and Lisa Rizzolo hid the $5 million in the Cook Islands.

It now seems that the Federal Marshals will do almost anything to get rid of this embarrassing liability including selling the Crazy Horse to persons who they may not have fully vetted.

I have great sympathy for the Henry family for being forced to wait so long to get what they are rightfully owed, but the possibility of selling the bar back to the same type of hoodlums who injured Mr. Henry and so many others is not something that should be taken lightly.

According to the September 25, 2009 Las Vegas Sun: " alliance of sorts has been formed, said several attorneys knowledgeable about the deal, a kind of 'strange bedfellows' pact in which many of the normally adversarial parties are now allied because they’re eager for the sale to go through. Those parties include the prospective buyer, the federal government, Rizzolo and the man who successfully sued the now-shuttered club after his neck was broken there."

Unfortunately, such "strange bedfellows" pacts can be the harbinger of future "Kirk Henry" type beatings if the wrong persons are allowed to get their hands on the infamous Crazy Horse Too.

But Condotti, et. al. may have a problem closing this deal.

INSIDE VEGAS, in an exclusive interview with San Francisco investor/developer Luke Brugnara (left), recently learned that a group he controls, last April purchased the Crazy Horse Too's First Mortgage at an auction held by the Federal Deposit Insurance Corporation (FDIC).

Brugnara has long wanted to buy the bar, but has never been considered. His top offer was $15 million, but that was in 2007.

At that time, Brugnara described being stonewalled by Rizzolo's attorneys who obviously did not want to sell the club to an outsider, or for less than it would take to get Rick and Lisa off the hook, especially with Kirk Henry and the IRS.

In 2007, Brugnara said any deficiencies can be recovered from the Rizzolo's bank accounts and houses. That didn't go over well with Rizzolo and his supporters.

Nor did Brugnara's description of himself as the son of a law enforcement official and nephew of the former San Francisco Police Chief. His brother and sister in law are reportedly Federal Prosecutors in California -- hardly the type person Rizzolo and his friends (including Mayor Oscar Goodman) would want running a resurrected Crazy Horse Too!

I believe Brugnara was discounted because he made public statements that he would not cut a secret deal to include Rick Rizzolo in as a silent partner.

Regarding his past Nevada deals, Brugnara purchased the Silver City Casino and Shopping Plaza on Las Vegas Blvd. at Convention Center Drive in 1999, bringing Walgreens and Ross to the Strip. He also leased his LV house to Michael Jackson when the pop star lived here in 2006 - 2007.  Brugnara (40) owns other commercial properties in Las Vegas.

"The First Trust Deed is currently foreclosing out the CH2 property and is expected to be completed by November 2009," stated Brugnara. Brugnara says he will own the CH2 at that time.

Las Vegas attorney Jay Brown represents Brugnara regarding the CH2. Brown is a business partner of LV Mayor Oscar Goodman, and U.S. Senate Majority Leader Harry Reid, so he has plenty of political juice.

"The US Marshal opted not to buy the note at the (April) FDIC auction, so they no longer control the fate of the CH2 and cannot sell the property to anyone because the property is under foreclosure and the balance to payoff the first TD is over $7 million dollars," according to Brugnara.

The dilapidated CH2 property is only worth $3M - $4M at present according to real estate experts. Even with a liquor license it isn't worth much more, as several strip clubs in town are quietly being marketed for around $7 - $12 million cash including Seamless and Minxx that are both high tech new structures.

In response to questions about the Las Vegas SUN story by the city hall reporter Sam Skolnik, Brugnara told INSIDE VEGAS: "The U.S. Marshals do not control the sale of the Crazy Horse Too. The group I control purchased the First Deed of Trust at auction from the FDIC (for an undisclosed amount). We are now in the process of foreclosure. The Marshals had the opportunity to bid on the Note, but opted not to."

Brugnara, when asked the value of the Crazy Horse Too property with an active liquor license, brought up another strip club, "Seamless."

"Seamless with an active license can currently be purchased for $7 million cash. Seamless had a $16 million dollar remodel in 2007 and 2008. Seamless is on 2 acres across from the Orleans; is open for business; and brings in $800,000 per month revenue," stated Brugnara.

Brugnara went on to say that the Crazy Horse Too is currently valued at $3.5 million based upon his discussion with Jeffrey West of the Richard Ellis Real Estate firm who estimated the price without a liquor license. With a license, it's worth the same price as Seamless -- $7 million -- Brugnara said.

Richard Ellis Realty is the agency contracted by the U.S. Marshals to sell the Crazy Horse Too.

"The foreclosure will happen before anyone is licensed," stated Brugnara.

Asked if this is a a smoke screen to let the Rizzolos get off the hook? Brugnara said he did not want to comment.

Brugnara's California based group reportedly bought a $40 million pool of Notes from the failed Security Pacific Bank's inventory of bad loans including one they made for $5 million to Rick Rizzolo.

Brugnara told INSIDE VEGAS that he was told by the U.S. Marshals Service in Washington DC that the Marshals have accrued out of pocket expenses of over $800,000. "Their position is subordinate to the Deed of Trust. Their position is ahead of everyone else," stated Brugnara.

In other words, the longer the Marshals drag this on, the more Rick and Lisa Rizzolo will benefit. That's why the U.S. Marshals may be going through this media campaign -- to purport a sale -- and have done so for the past two years. But the bottom line is that Rick and Lisa Rizzolo are the only persons ultimately responsible for paying over $27 million in debts they accrued through their long term racketeering activities at the Crazy Horse Too, debts including $7.7 million owed to the IRS.

Brugnara would not say that the Marshals are purposefully trying to aid the Rizzolos, just that the convicted racketeer and his ex-wife may be benefiting by any delays.

"The group I control will foreclose them out. There's nothing to talk about. No one can get a Stay. The Note is losing value everyday. That's it," stated Brugnara.

Even with all the efforts of Spud and The Ticket Fixer to help Rick and Lisa keep their ill-gotten money, I believe Judges Foley and Pro are about to drop their gavels and hold Rick, Lisa, and Kimsey in Contempt;  go after the Rizzolos ill-gotten fortune;  pay the Henrys;  and stop this mockery of the U.S. Department of Justice, the Internal Revenue Service, and the Federal Court system.

If not, then this pathetic model for how to evade justice may be repeated again and again.

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