They tried to squelch production of
admit "money that was long ago spent"
their conflict of interest; then try
while triggering speculation they received
their law firm's legal fees under the
INSIDE VEGAS by Steve Miller
December 8, 2008
LAS VEGAS - At first it was
thought that the sale of the Crazy
Horse Too would cover all of Rick and Lisa Rizzolo's financial obligations,
but as a conciliation, Rick agreed to personally stand good for the couple's
debts in the event the bar did not sell. This was supposed to occur instead
of letting the money be "long ago spent!" However, it's now been two and
a half years since he plea bargained; the Crazy Horse is dark and decaying;
and Rizzolo and his wife have not paid a dime while they scoff at United
States District Judge Philip Pro, the Federal Prosecutors, and the U.S.
Attorneys who they so skillfully duped with the help of local mob lawyers.
But circumstances may be
about to change. With friends like the criminal defense attorneys at Patti
& Sgro, the convicted racketeer and his ex-wife need no enemies.
Not only did Patti &
Sgro blow the Rizzolo's cover by admitting the couple "long ago spent"
moneys intended to pay beating
victim Kirk Henry, the IRS, and other creditors, but when Patti &
Sgro saw a COMPLAINT filed in Federal Court by Henry's current legal team;
former U.S. Federal Prosecutors Don Campbell and Stan Hunterton, asserting
that Patti & Sgro and others might have participated in a Conspiracy
to Defraud, and a Violation of the Uniform
Fraudulent Transfer Act (UFTA), they began squirming and immediately
filed a MOTION TO WITHDRAW as Rick and Lisa's attorneys.
|The Nevada Rules of Professional Conduct at Rule 1 .7(a)(2) prohibit
a lawyer from representing a client when there is a significant risk that
the representation will be materially limited by a personal interest of
the lawyer. In addition, the Nevada Rules of Professional Conduct at Rule
1.9(a) prohibit a lawyer from representing a person who has interests materially
adverse to the interests of a former client. In this action, Patti,
Sgro & Lewis formerly represented both Defendants in their divorce
and it has been threatened with a lawsuit by the insinuations made in Plaintiffs'
Complaint. This firm has a genuine conflict of interest in remaining
as counsel of record for one of its two former clients in this action.
Pursuant to Nevada Rules of Professional Conduct, Rule 1.16(a) Patti,
Sgro & Lewis is required to seek this Court's order permitting it to
DATED this 4th day of November, 2008.
PATTI, SGRO & LEWIS
MARK C. HAFER
720 So. Seventh St., Third floor
Las Vegas, NV 89101
Attorneys For FREDRICK RIZZOLO
But they are not the only
local attorneys who may find themselves embroiled in this legal mess. John
E. Dawson of the firm Lionel Sawyer and Collins also played a major
part in helping
the Rizzolos hide their assets from creditors. By coincidence, Mr.
Dawson's brother Kent Dawson was the
Federal Judge who officiated over the trials of 15 Crazy Horse Too
defendants. Another potential conflict of interest.
What is most telling is Patti
& Sgro's utter refusal to abide by Campbell and Hunterton's Rule 45
right to subpoena financial records relating to Patti & Sgro's long
standing financial relationship with the Rizzolos and the couple's now
defunct criminal enterprise the Crazy Horse Too strip joint (see INTRODUCTION
below). This refusal is fodder for those who believe Patti & Sgro were
paid their legal fees under the table with no records kept, something the
IRS may find of interest.
And the following notes in
Campbell and Hunterton's MOTION must also be giving Patti & Sgro chills
up and down their spines:
Based on the above court
documents, Judge Pro is being asked to rule on whether Patti & Sgro
are obstructing justice, and if they should be severely sanctioned. The
Internal Revenue Service may also discover the law firm's alleged lack
of record keeping was a factor that should have been included in Rick Rizzolo's
2006 indictment for tax evasion.
During Rick Rizzolo's 2006
plea bargain, Patti & Sgro cut a deal for him with Federal Prosecutors
to get an abbreviated one year sentence in exchange for Rizzolo's guarantee
to pay over $27 million in restitution including $9 million plus interest
to Kirk and Amy Henry; Clark County taxes owed on the property with penalties
and interest; a defaulted Security Pacific Bank $5 million dollar loan
with attorneys' fees, penalties, and interest; the restitution of $1,734,000.00
plus accruals to the IRS; fines of $750,000.00 plus interest; the forfeiture
of $4,250,000.00 plus interest to the IRS; the City of Las Vegas' judgment
lien of $2,192,000.00 plus interest; the IRS tax Iien against Rick and
Lisa Rizzolo for their 2006 individual income taxes of $1,032,535.26 plus
accruals; and the $1 million ordered to be retained in the Clark County
District Court's escrow account pending the resolution of the late Buffalo
Jim Barrier's harassment lawsuit against Rizzolo.
Rizzolo was released from
prison on April 4, 2008, and has since failed to pay one cent of the above
restitution. This has raised the question as to when Judge Pro will drop
the hammer on Rick and Lisa, and possibly the mob attorneys who helped
The most deserving of the
Rizzolo's creditors is Kirk Henry. His neck was broken by one of the Rizzolo's
employees in 2001 when Henry refused to pay what he believed was a bogus
$88 bar tab. Henry was permanently paralyzed from the neck down. This occurrence
triggered the FBI investigation that revealed "35 to 40 beatings had occurred
at Crazy Horse Too in three years," according to Las
Vegas City Attorney Brad Jerbic, plus the plethora of other heinous
crimes that resulted in the strip bar's closure and seizure by the U.S.
Department of Justice in 2007.
The least deserving creditor
is Security Pacific Bank of California. The institution was closed
down by the FDIC on November 7, 2008 for making questionable loans
including the $5 million dollar one they foolishly granted the Rizzolos
in 2005, three weeks before Rick began his plea negotiations.
In a DECLARATION filed with
the court on February 12, 2008, the bank acknowledged being forewarned
(by Steve Miller) that they were about to loan $5 million to a crook, but
they ignored the warning and funded the loan. This is the same bank that
once featured former LV Mayor Jan Jones -- Rizzolo's
Newport Beach neighbor -- as one of its Directors and stockholders.
Rizzolo may have taken unfair advantage of his long time friendship with
the former mayor so she would inadvertently help him obtain the loan that
he had no intention to repay.
On October 20, 2008, a few
weeks before it was shut down, Security Pacific Bank filed a MOTION in
Federal Court trying to foreclose on the Crazy Horse Too. Based on the
bank's lack of credibility, it was rumored that certain bank officials
were functioning as surrogates for organized crime figures who wanted to
obtain the topless bar for less than the $5 million Rizzolo owed the bank
so they could possibly resume his lucrative criminal activities that caused
the Crazy Horse Too's closure and seizure.
On December 3, the United
States Attorney for Nevada correctly petitioned Judge Pro asking that he
deny the bank's, or its successor's MOTION. Judge Pro is expected to rule
on this MOTION in the near future, but court observers don't expect him
to honor a discredited bank's unreasonable request.
Meanwhile, the feds continue
to try to find a buyer who is willing to pay $7-11 million for the depilated
But most important is the
admission by the Rizzolo's lawyers that the couple's money was "long ago
That statement may offend
Prosecutor Eric Johnson enough to finally inspire him to go after Rick
and Lisa Rizzolo's illegally hidden assets including their property
under the Philadelphia
Crazy Horse Too, assets that have an estimated value far in excess
of the couple's debts, as was recommended in the August 21, 2007 Las
Vegas Sun Editorial; "Get
tough with Rizzolo."
The Rizzolos seemed fully
aware as late as June 4, 2008 that they could be at risk to creditors according
to the following document from the Federal Court record. Hence the claim
their money was "long ago spent."
Also, Rick Rizzolo has long
been suspected of stashing millions in cash at the MGM, Hard Rock, and
Palms casino cages where he is known as a "Whale." According to "Casino
Host to the stars" Richard
Wilk, "Rick Rizzolo is one of (his) top players and closest pals."
So if it's true, as Patti
& Sgro claim, the couple "long ago spent" their (ill-gotten) money
(and are probably stashing millions in cash), Rick could face additional
prison time, and Lisa could be indicted for Fraudulent Transfer of Assets
after clearly trying to hide her family's money from creditors.
And local attorneys John
E. Dawson, Dean Patti, Tony Sgro, and Mark C. Hafer could also face indictment
if evidence is found to prove they knowingly conspired to aid and abet
such a scam.
In the meantime, Rick Rizzolo
is regularly seen in our town's most expensive venues squandering
cash, entertaining friends, and gambling while Kirk Henry's family
struggles to pay his life-long medical bills.