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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 threatened with Contempt of Court - sort of

"The Court's power to hold Mr. Rizzolo in civil contempt is likely to be
the most effective method for coercing him into complying with the
Court's discovery orders if he refuses to comply voluntarily."
U.S. Magistrate Judge George Foley, March 11, 2010

INSIDE VEGAS by Steve Miller
March 15, 2010

LAS VEGAS - In the latest in a series of hollow Orders issued by United States Magistrate Judge George Foley compelling convicted racketeer Rick Rizzolo to answer unpaid beating victim Kirk Henry's interrogatories regarding the extent and whereabouts of Rick and his ex-wife Lisa's hidden cash, the judge for the first time is beginning to sound tough.

But in his third Order to Compel, Judge Foley -- again -- refuses to issue sanctions against the recalcitrant Defendant, and in the past week rescheduled the close of discovery in this case to accommodate the ex-felon's reluctance to reveal the extent and whereabouts of his cash.

"IT IS FURTHER ORDERED that Defendant shall provide full and complete discovery responses within thirty (30) days of this order. Defendant's responses shall include any and all documents that the Court has ordered him to request and obtain from banks, financial institutions, credit card providers or other persons or entities. To the extent such documents have been requested, but not yet received by Defendant, he shall provide full and complete information showing that he has requested such documents and when he or his counsel expect to receive and produce such documents. To the extent Defendant is unable to produce information and documents that the Court has ordered him to produce, he shall provide a full and complete explanation under oath setting forth the reasons why such information or documents cannot be provided."

This latest 16 page Order issued on March 11, compels Rizzolo to produce years worth of financial documents. However, conspicuously missing from the Order is the mention of the shredding of documents that occurred on April 3, 2007 at Rizzolo's 2486 Industrial Road office behind the LV Crazy Horse Too, or the "flood" in the law office of Dean Patti and Tony Sgro that purportedly turned the Rizzolo's financial documents into "MISSING INFORMATION." (see: )

(Upon learning of the "flood," Judge Foley did not require Patti and Sgro to verify when and if it actually occurred.)

In regard to those destroyed documents, it will be interesting to hear Rizzolo's explanation as to what happened to them, if he's asked.

The Uniform Fraudulent Transfer Act (UFTA) jury trial of the Rizzolos is set for sometime in September 2010. Motions are due by 7/30/2010, and the Proposed Joint Pretrial Order is due by 8/31/2010.

"Defendant has not fully complied with his obligations to disclose his assets or transfer of assets in response to Plaintiffs’ discovery requests. The Court is particularly troubled by the information that Defendant did not disclose the deposit of $990,000 into the “RLR Trust” bank account in 2008."

Judge Foley is talking about $990,000 that Rizzolo allegedly received in 2008 for the sale of his interest in the Philadelphia Crazy Horse Too strip club (left).

But Judge Foley is not being informed of the Rizzolo's recent penchant for mortgaging their other real property; taking cash outs, and stashing the money in the Cook Islands out of the reach of Henry and the IRS.

The first occurrence was in 2005 when Rick mortgaged the Vegas Crazy Horse Too through a suspicious bank loan made by the now defunct Security Pacific Bank of California.

Rizzolo borrowed (stole) $5,000,000.00 from the bank with no intention of ever paying it back. The bank went belly up, and the First Deed of Trust on the LV Crazy Horse Too that was used as collateral was purchased four years later at the FDIC auction by a California LLC. (More on this later.)

The Rizzolo's "sham"   Decree of Divorce was signed on June 3, 2005 soon after he mortgaged the strip club. On August 29, 2005, Lionel Sawyer & Collins asset protection attorney John Dawson, the brother of Federal Court Judge Kent Dawsontransferred the couple's Las Vegas mansion, parcel number 163-05-711-072,  over to something called "THE LISA M. RIZZOLO SEPARATE PROPERTY TRUST."

According to Clark County Records, two months after transferring APN: 163-05-711-072 to her trust, Lisa placed a First Mortgage on the property with the now-defunct INDYMAC Bank at a time when the bank was known for making questionable loans.

One month later, it appears she placed a Second Mortgage on the same property (left) with an almost unknown California lender called Money First Financial Services, Inc.

This was during the time Las Vegas was enjoying a housing market "bubble," and real estate prices were sky high. It was also possible at the time to mortgage houses for over 100% of their value by use of combined first and second mortgages from overly friendly bankers.

But the Las Vegas house was not the only property Rick transferred to Lisa's "Separate Property Trust."  Two other houses were transferred that she may have also mortgaged to the hilt.  One is a beach house located at 104 West Ocean Front, in ritzy Newport Beach, California. The other is a lake front condo located at 195 Harbor Drive in Chicago.

Two Oppenheimer accounts valued at $7,200,000 in 2005, were also discovered during an investigation of the Rizzolo's assets by the FBI.

Experts in the real estate field estimate that the Rizzolo's three houses, if mortgaged, generated between $8 to $10 million in possible cash backs. That, along with the $5 million stolen from Security Pacific Bank and the $7.2 million dollar annuity totals over $20 million undisclosed dollars that may be hidden in the Cook Islands -- money that Rizzolo may be keeping secret from the court.

Now, according to Judge Foley, Rick has until around April 11 to come clean, or possibly be held in civil contempt. I won't hold my breath based on Judge Foley's previous actions.

However, while we wait for this to happen, several other things are going on.

In an obvious further attempt to waste time and divert the court's attention from the relevant issues in this case, Lisa Rizzolo is trying to force Kirk Henry's attorneys to violate their attorney-client privilege by being compelled to appear for depositions.

This required Henry's attorneys Don Campbell and Stan Hunterton to spend time and resources that must later be reimbursed by Mr. Henry, to file a MOTION TO QUASH SUBPOENAS AND FOR PROTECTIVE ORDER.

Attorneys in active court cases are almost invariably protected from being deposed by opposing party's attorneys because it would have a chilling effect on honest communication between attorney and client. But instead of summarily quashing their subpoenas, Judge Foley scheduled a hearing so attorneys for both sides can waste the court's time arguing with each other about attorney-client privilege.

This is not the only silly hearing Judge Foley has calandered in this case.

He's still obsessed with Rizzolo's jail house lawyer James 'Spud" Kimsey, and has scheduled an expensive Contempt of Court jury trial to decide if Spud needs to go back to prison for ghost writing over a dozen Motions and documents that Rick Rizzolo signed, thereby successfully stalling Kirk Henry's UFTA case for an extra six months. Notice that Judge Foley didn't include Rizzolo as a co-defendent even thou Spud was working at Rizzolo's behest.

At taxpayer's expense, the United States Public Defender was assigned to defend Spud, and last week she filed a 5 page MOTION FOR EXTENSION OF TIME, followed by a 13 page well written MOTION TO DISMISS.

Based on this Motion to Dismiss, Judge Foley must decide if he still wishes to go through with a jury trial in Spud's case, and he's still toying with the idea of requiring Kirk Henry, a quadriplegic, and his wife Amy to travel to Las Vegas for a face to face deposition so Lisa Rizzolo's legal team can "evaluate their demeanor and credibility as witnesses," (see page 16 @

All of this is costing the taxpayers lots of money, but there are even more recent developments in this case that can further muddy the water!

On February 28, 2008, the United States Federal Court granted a STAY to prevent Security Pacific Bank of California from foreclosing on the defunct Crazy Horse Too strip club in Las Vegas after the bank loaned Rick Rizzolo $5 million cash secured by a First Deed of Trust on the Crazy Horse property. As I said earlier, Rizzolo promptly stashed the money off shore, and never paid one payment on the loan.

After making this and many other highly questionable loans, Security Pacific went belly up. The First Deed of Trust was purchased by a California LLC.
However, the LLC was STAYED from foreclosing on the property because, at the time, the government was making a diligent effort to sell the closed Crazy Horse Too.
After all efforts to sell the business and property failed, the California LLC on  March 9 filed a MOTION TO LIFT STAY so they can foreclose on the property and purportedly sell it to the highest bidder.

(On several occasions, associates of Rick Rizzolo have attempted to purchase the Crazy Horse Too as straw men representing his interests. The principals in the California LLC have not yet been identified, but should be individually scrutinized if they are successful in foreclosing on the property.)
If the LLC is granted permission to foreclose, it may signal a "sale" has taken place, therefore opening the door for the government to require Rick and Lisa Rizzolo to be forced to "repatriate" their off-shore-stashed money to pay Kirk Henry, the IRS, and other debtors per Rick's plea agreement to make up the difference between what the club sells for, and what he owes which is estimated to be in excess of $17 million dollars, and growing.
Per a recent Federal Court decision, case law now exists to allow the court to imprison Defendants who refuse to "repatriate," or return funds stashed off shore that are owed to the government.

In the meantime, it would be prudent for the court to immediately seize Rick and Lisa's passports.

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