Ninth Circuit Court of Appeals to hear
exaggerated claims about the value
of the Crazy Horse Too strip club

A familiar name is hired to lobby for
new zoning to reopen the club

INSIDE VEGAS by Steve Miller
AmericanMafia.com
June 18, 2012

LAS VEGAS - On May 18, 2012, attorneys for Lisa Rizzolo, ex-wife of convicted racketeer Rick Rizzolo, filed a 32 page APPEAL with the Ninth Circuit Court of Appeals in San Francisco. Lisa wants the circuit court to decide if United States Senior Judge Philip Pro was correct on April 19, 2012 when he issued a six page ORDER stating:

"However, a tort committed during the marriage by one spouse is considered a community debt, and the entirety of the community property is subject to a judgment against the tortfeasor spouse, even if the other spouse was not a named party to the suit.

Here, Kirk Henry was injured in September 2001, Plaintiffs filed suit against Rick Rizzolo in October 2001, and the Rizzolos divorced in June 2005. Because the conduct giving rise to Plaintiffs’ claim against Rick Rizzolo occurred during the marriage, Plaintiffs’ claim against Rick Rizzolo is a community debt.

Accordingly, Lisa Rizzolo’s share of the community property is 'subject to process by a creditor holding a claim against only one tenant' as set forth in NUFTA (Nevada Uniform Fraudulent Transfers Act) § 112.150(2)(c), and therefore falls within the definition of an 'asset' that can be fraudulently transferred. Moreover, to the extent the divorce settlement inequitably divided the community assets and Rick Rizzolo fraudulently transferred a portion of his share of the community property to Lisa Rizzolo through the divorce, Rick Rizzolo’s share of the community property that was fraudulently transferred to Lisa Rizzolo is also subject to the judgment.

This is so even though Rick Rizzolo settled the claim and breached the settlement agreement after the divorce. Married couples may not avoid community debts by (1) making fraudulent transfers through a divorce, (2) settling the community claim against the spouse who fraudulently transferred community assets, and (3) breaching the settlement agreement, leaving the spouse who fraudulently transferred community assets without sufficient means to satisfy the liability owed to the third party creditor.

As this Court already has determined a reasonable jury could find the Rizzolos’ divorce constituted a fraudulent transfer, the Court will deny Lisa Rizzolo’s Motion on this basis."

Ms. Rizzolo's primary appeal argument is that she received the short end of the stick in the division of her and Rick's community property. She claims that the then-operating Crazy Horse Too that Rick individually received in the divorce settlement was valued at the time of her divorce "in excess of $30 million," an outrageous claim that could only be supported if the new owners continued robbing and beating patrons as was the Rizzolo's modus operandi. Lisa claims that what she received in her settlement was worth a fraction of what her ex-husband got, therefore she should be allowed to keep the community property that was derived from Rick's criminal activities including cash and assets she stashed in the Cook Islands out of the reach of Kirk Henry and the IRS.

Not mentioned in her claims is that a straw man appeared in 2007 to run the club for the Rizzolos after Rick began his first shortened prison sentence based on his plea bargain agreement to stay out of the adult business for the rest of his life. When it was discovered that the crime family was still in charge, the City of Las Vegas on July 1, 2007 revoked the club's liquor license forcing the club to go dark. One year later with no business operating, the adult use zoning expired. Then the recession hit and six years after her divorce the club sold at auction to a California investor (Canico Capitol Group, LLC) for only $3 million.

Lisa's attorneys ask the Ninth Circuit Court to reverse Judge Pro's ruling because:

"The Crazy Horse Too which was awarded to Rick Rizzolo pursuant to the decree of divorce, had a value in excess of $30 Million at the time the decree of divorce was entered. Essentially, Ms. Rizzolo received the marital residence in Las Vegas, Nevada, appraised at $944,700.00, a house in Newport Beach, California appraised at $1.4 Million and a condo in Chicago, Illinois, with a market value of $192,638.00 in 2003 as well as the Oppenheimer accounts in the amount of $7.2 Million. At the time of the divorce, the Crazy Horse Too was worth substantially more than the property received by Ms. Rizzolo in the divorce."

Unfortunately, Lisa's argument is full of holes. For instance, she neglected to mention the whereabouts of $5 million dollars she and Rick "borrowed" on October 26, 2005 from Security Pacific Bank of California using the strip club as collateral and never paying back one cent (see the Declaration of FBI Agent Anthony J. Mace). Her unpaid loan along with many other questionable loans made by Security Pacific caused the bank to go under and the FDIC (taxpayers) to foot the bill to protect depositors.

Lisa's $30 million dollar claim is based on the following "offers" that never panned out.

The first "offer" was from Las Vegas restaurant owner Michael Signorelli shown looking at his attorney Jay Brown in this Las Vegas Review-Journal photo by Clint Carlson taken during a city council hearing when Brown vouched that Signorelli had the funds to pay $45 million for the strip club he was purportedly leasing and operating while Rick Rizzolo was in jail.

Following the hearing, City Attorney Brad Jerbic filed this report about Signorelli's ability to purchase the Crazy Horse Too:

"Signorelli, on multiple occasions, has informed the City staff and the City Council that he has legitimate commercial financing for the $45 Million purchase of Crazy Horse Too. LVMPD has repeatedly asked for evidence of this. No evidence has been forthcoming... LVMPD has been unable to verify any source of funding for the purchase of the business."

It was later confirmed the Rizzolos were still operating the club in violation of city law while Signorelli reportedly slept in the back office.

Then in October 2007, a confidential source in the local law office of Dean Patti and Tony Sgro slipped INSIDE VEGAS a confidential letter sent to casino operator Steve Wynn explaining that all deals for the purchase of the Crazy Horse Too had fallen through:

"Other buyers were also approved, but to date, no buyer has performed its contract. The contract rights of Imperial Share Holdings Corp. and White Drive Acquisitions, LLC were terminated by mutual consent. To date, the seller has not notified The Mortgage Broker, Inc. that its contract is rescinded since it has tried in good faith to purchase the property. That notice could be given at any time since The Mortgage Broker, Inc. has failed to perform. At the present time the United States and the seller would still be willing to allow The Mortgage Broker, Inc. to revive its contract upon the deposit of $34,200,000 into the Nevada Title Company escrow established for this transaction."

No deposit was forthcoming and the club went into foreclosure. So it's hard to imagine the Crazy Horse Too was ever worth what Lisa claims, and that her stash in the Cook Islands and two luxurious houses in the U.S. are fully subject to seizure per Judge Pro's ruling.

Jay Brown is currently representing parties attempting to reopen the Crazy Horse Too.  He has asked Las Vegas City Councilman Bob Coffin (left) to sponsor an ordinance to allow the property to regain its lost zoning. Coincidentally, Brown and his law partner former LV Mayor Oscar Goodman were once Rick Rizzolo's corporate agents, and Goodman for years served as Rizzolo's criminal defense attorney. Based on a July 10, 2006 ethics complaint filed by Steve Miller, Oscar Goodman was forced to recuse for 18 months on council items related to the Crazy Horse Too thereby removing an obstacle that cleared the way for the city to close the club one year after my complaint was filed.

Councilman Coffin has agreed with some reservation to bring a new ordinance before the city council, but with the caveat that Rick Rizzolo and any of his associates not be involved in the future operation of the strip club. Coffin is guaranteed to have plenty of eyes including my own watching Industrial Road to make sure that doesn't happen.

In response, the applicant wrote this letter to City Attorney Brad Jerbic promising to abide by Councilman Coffin's admonition:
 
 

Lets hope so!

Based on Coffin's reputation after decades in public office, few who know him doubt his sincerity or would try to deceive him. He's known for doing his homework and when I reminded him of Jay Brown's less than forthright statements made to a previous city council about Signorelli's ability to raise $45 million, Coffin tersely responded, "I have read some of your columns to refresh my memory."

I'm sure he has...

If the property is rezoned and the business allowed to reopen under new ownership, the city will again have to waive parking requirements for the new owners as it did in 1999. Similar 26,000 square foot public facilities are required by city law to provide at least 300 parking spaces. The old Crazy Horse Too was required to provide only 134 resulting in a nasty lawsuit filed in 1999 by neighboring property owners who correctly claimed Rizzolo was given a political favor allowing him to forego legally required traffic and parking studies causing his patron's cars to park on nearby private property and monopolize curbside spaces at adjacent low income apartment buildings. The lawsuit was later dismissed on a (political) technicality, however, the current city council is fully aware of its content and validity.

It's estimated that Lisa Rizzolo is holding cash and assets worth over $15 million dollars much of which she and her ex-husband fraudulently transferred off shore. The Ninth Circuit Court is expected to rule on Lisa's appeal sometime this fall. A similar appeal filed by Rick Rizzolo was unceremoniously disposed on April 3, 2012 by the same court.  Its reported that Lisa is awaiting her appeal's ruling at her beach house on Ocean Front Drive in Newport Beach, California, an asset that may be subject to seizure following the ruling.