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Rick Rizzolo to Fed Court: "The money's on its way"
An Act of God may relieve Rizzolo of having to pay Kirk Henry and the IRS

INSIDE VEGAS by Steve Miller
April 1, 2013

1000 MILES NORTHEAST OF RAROTONGA  - The funds from a confidential settlement reached on January 28, 2013, between beating victim Kirk Henry and Lisa Rizzolo, are reportedly aboard a disabled Carnival cruise ship drifting without power approximately 1000 miles northeast of the Cook Islands.

On Wednesday evening, March 27, the ship that was purportedly carrying Ms. Rizzolo's funds experienced a fire in the engine room, lost power, and began to list to the starboard side. An SOS was radioed and rescue vessels from the closest ports in Samoa, Fiji, Tonga, and Tahiti immediately began racing to the site of the stricken ship.

A passenger told INSIDE VEGAS via satellite phone, "It's horrible. Horrible!"  "The bathroom facilities are horrible and we can not flush toilets. No electricity and our rooms are in total darkness."

"The odor is so bad that it's making people sick," stated another stranded passenger. "They're vomiting and stuff all over the boat just from the odor ... There's feces all over the floor."

To make matters worse, the captain reported that his ship's safe was broken into some time between midnight and 5 AM Thursday while the purser's office was unguarded and confusion prevailed.

The safe located in the First Class section of the ship, held a padlocked safe deposit box purportedly containing assets being transferred from Lisa Rizzolo's Cook Islands accounts to beating victim Kirk Henry. The transfer was per a confidential settlement agreement negotiated by U.S. Magistrate Judge George Foley, Jr. on January 29, 2013.

Henry was awarded $10 million dollars in restitution after his neck was broken by an employee of the Rizzolos in 2001, but he has been unsuccessful in collecting any of the money since the Rizzolos transferred most of their assets off shore in 2006.

Lisa's ex-husband convicted racketeer Rick Rizzolo agreed in 2006 to pay Henry the restitution as part of a plea bargain to gain a shortened prison sentence. But Rizzolo didn't reveal that he also hired a politically connected asset protection lawyer to hide his assets so they couldn't be seized.

During a June 5, 2009 deposition conducted by Kirk Henry's attorneys, Lisa Rizzolo was asked:

Q.     All right. Have you ever been to the Cook Islands?
A.     No.
Q.     Do you know where they are located?
A.     No. Far away.
Q.     Far away. Do you know what body of water they are located in?
A.     No.

The repatriation of Lisa Rizzolo's Cook Islands money back to the U.S. via the Carnival ship was considered a giant breakthrough in a lawsuit that has lasted for over 12 years.

Reached by satellite phone, Captain Vincent Faraci told INSIDE VEGAS that the ship's electronics including its security system have been inoperative since losing power, therefore he cannot recover video surveillance tapes of the purser's office where the safe was located.

"We are doing our best to take care of our passenger's safety and well being. What's missing from the ship's safe is not our priority," stated Faraci.

The door to the pursor's office and the safe were heavily damaged during the break in according to sources. All the safe's contents were removed after the door was pried open. A fire hose box located nearby was also found open, and its ax was reportedly missing. Sources tell INSIDE VEGAS that the safe contained millions of dollars in cash and jewelry, in addition to Ms. Rizzolo's safe deposit box.

Carnival Lines security officers on board the ship told reporters that they will conduct an investigation after the ship is safely back at port, but say they have more important things on their minds right now. However, its unknown whether Carnival's  insurance is current, and rumors persist that the cruise line is on the verge of bankruptcy after facing several class action lawsuits based on previous emergencies. Therefore, if the valuables are not recovered in the upcoming investigation, its uncertain whether robbed passengers will be paid from the company's overburdened insurance policy, and that includes the money for the confidential settlement owed to Kirk Henry.

If Lisa's safe deposit box is not found, the litigation to confirm and recover her damages could take years.

"There's no air conditioning at all inside," said one passenger, adding that people were sleeping outdoors and staying on an upper-level deck for fresh air in the humid 100 degree temperatures near the Equator.

                            Passengers sleeping on deck                                    Captain Faraci

While docked at Avatiu, Rarotonga, the ship's point of departure from the Cook Islands, Las Vegas asset protection attorney John Dawson, brother of United States Federal Judge Kent Dawson, reportedly arranged for Ms. Rizzolo's safe deposit box to be entrusted to Captain Faraci who reportedly signed a receipt and supervised its placement in the purser's safe. John Dawson is the "protector" of the Rizzolo's off shore assets,

According to the Register of Ships, the disabled cruise liner is owned by BONNANO MARITIME HOLDING LTD of New York, and leased to the Carnival Cruise Line. This is the first time this ship has ever experienced an emergency. Representatives of BONNANO MARITIME were unavailable for comment.

But this is not the first time treacherous waters interfered with the Rizzolo's ability to pay their court ordered debts. In July 2009, the United States Federal Court ordered the Rizzolos to produce their divorce paperwork stored at the downtown Las Vegas law office of Dean Patti and Tony Sgro. Representatives of the law firm that handled the divorce for both Rizzolos, told the court that the paperwork was destroyed in a flood.

The court took no action regarding the lawyers, though the "flood" was never confirmed.

Court observers opined at the time that the Rizzolos were making fools of those in the Federal Court system.

And while thousands of cruise line passengers suffer in the tropical heat, back in Las Vegas, people following this case are starting to wonder if Kirk Henry and the IRS will ever get paid?

"This time it outwardly appears they made a good faith effort to pay their court ordered debts, but it looks like an Act of God may have stopped them in their tracks," stated a veteran Las Vegas attorney who works mainly in the federal court system.

If the attorney's speculation is accurate, the Rizzolos may have dodged two bullets; one that ordered them to pay Kirk Henry over $10 million in restitution; another that ordered them to pay the IRS over $11 million in back taxes and penalties.

The attorney also told INSIDE VEGAS that based on the circumstances, the court may have to excuse the Rizzolos if their fortune was actually stolen on the high seas, though that may be impossible to prove beyond a shadow of doubt.

One long time observer of this case told INSIDE VEGAS that he truly doubts there was anything in Lisa's safe deposit box in the first place. "Her money was probably transferred to another off shore haven weeks before the safe deposit box was delivered to the ship's captain. If my hunch is accurate, the Rizzolos are the smartest people in the world! The safe was probably going to get robbed anyway, and the engine room fire made it that much more believable, especially when other Carnival ships have been disabled at sea in recent months," he exclaimed.

Meanwhile, the Uniform Fraudulent Transfers Act (UFTA) civil jury trial previously scheduled for March 26 was canceled, probably because the settlement had been reached.

In another action, the federal court ordered Rick Rizzolo's step mother Kimtran Rizzolo to turn over to Henry the $3 million she secretly received from the sale of the Philadelphia Crazy Horse Too, something she refused to do until the court garnished the money from several banks and insurance companies in which she deposited the funds.

One of the insurance companies that held Kimtran's ill-gotten money, TransAmerica, refused to comply with the court's order and turn over the money until this month, and only after being court ordered to pay Henry's attorneys over $25,000 in legal fees for work they did responding to the insurance company's bogus opposition to the federal court order.

The money from the Philly strip club sale is being held in trust for Henry while Kimtran appeals its garnishment. Kimtran's U.S. Ninth Circuit Court appeal is expected to be denied as were the appeals of Rick, and later Lisa Rizzolo that failed based on the same arguments Kimtran is using; that the United States Department of Justice should have operated the Rizzolo's former LV strip club the Crazy Horse Too until it could be sold for a hefty profit, and the City of Las Vegas destroyed the bar's value by revoking its liquor license (after it was discovered that members of the Rizzolo family were still running the place while Rick was in prison -- a violation of the city's conditions for issuing a temporary liquor license).

Another of Kimtran's reasons for appeal is her claim that Rick owed his late father Bart Rizzolo a lot of money. Therefore, following Bart's death in 2010, she claims the money belonged to her, free and clear. However, there is no paperwork to back up her claim, and Rick failed to report the $3 million to his parole officer, the court, or IRS.

And while Las Vegas Federal Court watchers are scratching their heads, reliable sources in the strip club industry report that Rick is violating the conditions of his parole by participating in the operation of another Sin City strip club with a familiar name.

"I have an inside guy who works at the Crazy Horse 3 who says that Rizzolo definitely OWNS the club and has been seen ordering employees to do things. Guess he's back in business .....And, I'm sure it will soon be 'As usual' busting heads, dealing drugs, selling ass, and a bit of credit card fraud to round things out," stated one source.

Another source told INSIDE VEGAS: "Per our conversation yesterday, an employee from CH3 said Mr. Rizzolo's son is in there all the time and Mr. Rizzolo is there almost every weekend and stays in the VIP bar."

As a condition of his parole, Rick is supposed to be selling cars at Fletcher Jones Mercedes and not running strip clubs, but he is never at the dealership, and has sold only one or two cars in the past year according to sources.

The Henry settlement was expected to be made prior to June 14, 2013, when a telephonic status hearing is scheduled in the chambers of Magistrate Judge Foley.

Had Henry received the funds purportedly transferred from the Cook Islands prior to June 14, the hearing was to be canceled, but its now uncertain whether the hearing will still take place if the funds remain unaccounted for.

In the event the funds cannot be recovered, sources predict that Rizzolo will move the court for an extension of time to make good on his promise to pay Henry, though he has been promising to do so for the past seven years.

If the court grants the Rizzolos an extension of time to try to recover their stolen funds, the UFTA trial is expected to be put on permanent hold. Had the trial taken place, Lisa Rizzolo could have been jailed until she agreed to repatriate her Cook Islands assets and pay Henry.

The Carnival ship caught fire in mid ocean over 800 miles from the nearest port. The blaze completely destroyed the generators that power the ship's propulsion system leaving the vessel drifting in strong currents with the more than 4,200 passengers and crew on board in limbo.

Captain Faraci says it may take up to a week or more to tow the crippled ship to a port that has repair facilities and a nearby international airport, and that's only if the sea remains calm. Otherwise the tow could take much longer according to Faraci.

So far, the seas have been calm, but according to NOAA's National Weather Service, a cyclone is developing in the South Pacific.

Because the Rizzolo-Henry settlement is so shrouded in secrecy, I've taken a little editorial privilege with this story, and if you believe the part about the stricken ship, HAPPY APRIL FOOLS DAY!


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