Two judges rule to further cripple Kirk Henry
and let Rick and Lisa Rizzolo keep
their hidden assets hidden

INSIDE VEGAS by Steve Miller
AmericanMafia.com
February 9, 2009

LAS VEGAS - Adding  insult to a quadriplegic's injury, on Tuesday of last week, United States Magistrate Judge George Foley, Jr. ordered that unpaid beating victim Kirk Henry not be allowed to examine the hidden assets of convicted racketeer Rick Rizzolo and his ex-wife Lisa until a state judge rules that Henry has a viable claim against the couple personally for breaching an agreement to pay Henry $9 million from the proceeds of the sale of their shut down topless bar.
 

Case 2:08-cv-00635-PMP-GWF Document 73 Filed 02/03/2009 Page 10 of 13 CONCLUSION: There is substantial doubt whether the Plaintiffs have any right of recovery against Rick Rizzolo other than through the sale of the Crazy Horse Too business pursuant to the terms of the 2006 settlement agreement. The Nevada District Court has twice denied Plaintiffs’ motion to reduce Mr. Rizzolo’s settlement obligations to judgment. The Court therefore concludes that Plaintiffs should not be permitted to pursue discovery regarding the alleged fraudulent transfer of Defendant Rick Rizzolo’s assets until they demonstrate the existence of a viable claim against Mr. Rizzolo for breach of the 2006 settlement agreement. Absent such a viable claim, the UFTA (Uniform Fraudulent Transfer Act) discovery sought in this action is, by its nature, irrelevant and unduly burdensome. Accordingly, IT IS HEREBY ORDERED that Plaintiffs’ Motion to Compel Answers and Responses to Plaintiff Kirk Henry’s First Set of Interrogatories and Requests for Production to Defendant Fredrick Rizzolo and For Appropriate Sanctions (#42) is denied without prejudice. The Court will permit Plaintiffs to proceed with discovery regarding the alleged fraudulent transfer of Defendant Fredrick Rizzolo’s assets if Plaintiffs show that they have a viable claim against Defendant based on his alleged breach of the parties’ settlement agreement and that Plaintiffs are, in fact, pursuing a judgment on that claim.  DATED this 3rd day of February, 2009. ______________________________________ GEORGE FOLEY, JR. United States Magistrate Judge

The basis of Judge Foley's ORDER was the following page from Rizzolo's MOTION to stop the examination of his hidden assets. In it he claims that the government ruined his chances of selling the topless bar for enough money to pay Henry and other debtors over $28 million dollars..

Clark County District Court Judge Jackie Glass is the wife of a Las Vegas City Councilman who once spoke in favor of letting the Crazy Horse stay open while Rick Rizzolo was in prison. More on that later.

On several occasions Rizzolo has used the excuse that he cannot pay his bills because the City of Las Vegas or the U.S. Department of Justice would not approve a buyer willing to pay in excess of what he and his ex-wife owed their creditors. (Rick and Lisa were married at the time all crimes were committed.)

Judge Glass (left) twice agreed with Rizzzolo and on April 24, 2007, ruled that until the Crazy Horse Too is sold, Henry could not officially locate or examine the Rizzolo's assets, and that Henry must wait for the sale of the bar to be paid what he's owed.

Henry's attorneys tried in vain to convince Judge Glass that the assets were fraudulently transferred during a hasty 2005 divorce so that creditors could not get paid.

Glass acted like she couldn't care less, and ignored their requests. Her nonchalance forced the Henrys to file a separate lawsuit in Federal Court.
 

Here's a list of Rick and Lisa Rizzolo's debts in order of priority according to U.S. Judge Philip Pro:
 

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 lein  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

Since Rick Rizzolo's release from custody on April 4, 2008, not one cent of the above has been paid.

Rizzolo's excuse?

On September 6, 2006, the Las Vegas City Council with Mayor Oscar Goodman abstaining, unanimously voted to permanently revoke Rick Rizzolo's liquor license and fine him $2.2 million dollars for condoning twenty years of robberies, beatings, and murders at his Crazy Horse Too. Goodman was forced to abstain based on an ethics complaint I filed after he was caught defending his former client Rizzolo.

During the four hour hearing, Deputy City Attorney Bill Henry told the council that there had been at least one beating per month between 2000 and 2005!

Within days, Rizzolo's attorney Tony Sgro filed motions in Clark County District Court asking for a Temporary Restraining Order against the City. It was denied by Judge Mark Denton. Sgro also filed a motion for a Preliminary Injunction to stop the license revocation. That motion was also denied.

The Crazy Horse Too went dark for the first time in twenty years. But that didn't last for long.

On October 18, 2006, six weeks after its closure, a much more meek City Council sat silent -- not questioning -- as Oscar Goodman's law partner Jay Brown (left) and other attorneys for Rizzolo presented a man named Mike Signorelli (right) to the council saying he will pay $400,000 per month ($14,000 per day) "rent" for the privilege of running the topless bar. Brown, a well known political lobbyist and fund raiser with ties to U.S. Senate Majority Leader Harry Reid, made it sound as though Signorelli was doing the citizens of Las Vegas a favor by reopening the blood soaked business -- putting hundreds of single mothers back on the payroll.

Brown eloquently described his (twice bankrupt) client as an extremely successful businessman with over 3,000 employees, and that he could easily handle the topless bar's management duties.

Without discussion, the council granted Signorelli a temporary liquor license, but ordered that no member of the Rizzolo family could step foot on the property. It was as though the vote had already taken place in the back room (as it had).

That evening it was business as usual with the Rizzolos running the joint.

When the Crazy Horse's next door neighbor the late Buffalo Jim Barrier photographed Rizzolos coming and going from the club on a regular basis, I informed the City that the crime family was still running the place, and a special meeting of the Council was called for November 1, 2007.

During that hearing, Sgt. Ray Alexander of the Las Vegas Metropolitan Police told the Council: "A reasonable person could draw the conclusion that Signorelli is simply running the business for Rizzolo, who is forbidden to do so."

Alexander was joined by City Attorney Brad Jerbic who told the Council: "Signorelli may be doing his best effort to keep Rizzolo out, but it's happening anyway. He can't run this business without being influenced by Rizzolo's people."

The Council voted to allow Signorelli to continue operating the bar as long as the Rizzolos kept their distance.

On April 17, 2007, Signorelli applied for a permanent liquor license.

According to the May 1, 2007 Las Vegas Sun: Councilman Steve Wolfson (pictured shaking hands with Oscar Goodman) led the questioning at the Council meeting and said Signorelli had taken steps to correct the problems and deserved the license.

Wolfson is the husband of Judge Jackie Glass.

At the hearing, Rizzolo's attorney introduced Amy Henry, the wife of Kirk Henry. It was obvious to Council observers that Mrs. Henry had been tricked into attending the meeting to support Signorelli. It was obvious because she was the same woman who on December 26, 2002 told NBC News: "I can’t understand what kind of city or state would allow a place like this to remain in business."
 

But there was an unpaid Amy Henry standing at the LV City Council podium five and a half years after she asked her question on national TV. She stood at the podium beside mob attorney Tony Sgro and pleaded that the Council grant a straw man a permanent liquor license to allow a place like that to remain in business. Amy made her plea after showing the Council a video of her husband (on left with son Jared in photo by REED HOFFMANN/ SPECIAL TO THE REVIEW-JOURNAL) and what it takes each day to help him survive. She also told of the devastation her two small children experienced when their dad's neck was broken in October 2001, and how they now help him eat, shave, exercise, and bathe.

Rizzolo's attorneys had promised her that the Crazy Horse Too was about to be sold to Signorelli for a purported $54 million dollars, and if Signorelli could obtain from the City Council a permanent liquor license with her help, she and her husband would immediately receive the $9 million dollar balance of their settlement. (Her attorneys would also get their percentage.)

Hearing Mrs. Henry's contradictory words, but knowing the pain that inspired them, I understood her frustration. After six years of waiting for her family's settlement, she believed that by helping Rizzolo keep his club open, her family would finally be paid what they so rightfully deserve.

In response to Amy's plea, Councilman Wolfson made the following statement also in support of keeping the Crazy Horse Too open:

"Mr. Signorelli has been in town for many, many years, and there's not been one blemish against his record. He's a respected businessman who offered evidence of his good credit with financial institutions."

Wolfson had been informed that Mike Signorelli had two bankruptcies on his record, but the Councilman chose to ignore this fact. Signorelli received his permanent liquor license.

While Signorelli continued operating the Crazy Horse, Rizzolo's lawyers were telling Wolfson's wife Judge Glass that Signorelli was purchasing the bar for $54 million dollars and that amount would cover all of the Rizzolo's debts including Kirk Henry. She believed them. This bought some time for Rick Rizzolo to serve the remainder of his one year prison sentence and, after his release, put together a group of mob investors and buy back his bar.

It was soon revealed that Signorelli had no money, and had failed to pay his payroll taxes and rent. On June 30, 2007, the City Council permanently revoked Signorelli's liquor license and shut down the bar. It's been dark ever since.

For doing this, Rizzolo tried to blame the City for diminishing the property's value, and Judges Foley and Glass have supported his claim by their rulings.

Nonetheless, Judge Glass continued to refuse to allow Henry's attorneys to locate the whereabouts of the Rizzolo's assets, or change his impossible-to-collect settlement to a personal judgment.

Following the bar's closure, Councilman Wolfson was publicly criticized for supporting a straw man. Then, without explanation, his statement about "there's not been one blemish against his record" was excised from the verbatim written transcript and video of the April 17, Council hearing. It's not known who removed the politically ambitious councilman's remarks from the record, but the action was highly illegal. Nonetheless, Wolfson's remark was quoted in several news stories including one published in the Las Vegas Sun.

Wolfson has announced his intention to succeed Goodman as mayor, so it's assumed the statement was excised so it could not be used by an opponent in an upcoming political campaign.

Judge Glass took sides with Rizzolo again when Henry tried to get the sale of the real estate settlement reduced to a personal judgment against the couple's hidden assets.

The June 30 , 2007 Las Vegas Review-Journal reported: "Lawyers for Kirk Henry, a Kansas tourist whose neck was broken over an $80 tab outside the club, sought a judgment against Rizzolo on Friday in order to get the $9 million plus interest Henry still is owed.

'I think it's fairly apparent now that this whole thing has been a scam,' attorney Don Campbell said. He argued that he needs to look at Rizzolo's assets, since the imprisoned businessman is now saying he is broke.

'I need to take some examination,' he said. 'There's no vehicle here, when he's saying, 'I don't have any money,' by which ...'

District Court Judge Jackie Glass interrupted.

'Stop, stop, please. I did not draft the settlement agreement,' she said, obviously annoyed. 'You have to wait for the sale of this business.'

The settlement agreement clearly states that Henry doesn't get the rest of his payment until the club is sold, she said.

'Perhaps everybody should've anticipated that at the time the agreement was entered into,' she said."

Glass' statement festered for almost 18 months until last Tuesday's ORDER by Judge Foley that sends Henry back to her court for further resolution.

Now it's up to Henry's attorneys to prove to Judge Glass that the government was not responsible for screwing up the sale of the Crazy Horse Too, and ruining its value.

If Henry's attorneys file new MOTIONS in Glass' court while their client is still alive, they may be able to convince her (and her husband) that other offers beyond Signorelli's were also rejected for good reason; that Rizzolo knew these offers were bogus; that the government had nothing to do with ruining the bar's value; that the Rizzolo's divorce was a fraud; and there is no other way for Henry to get paid unless she reduces the settlement to a personal judgment.

There is plenty of evidence to support the claim that no qualified buyer came forward at any time during the history of this case.

Within days of the discovery of Signorelli's financial subterfuge (I had been writing about it for months), three more Rizzolo straw men appeared on the scene (below), also offering outrageous sums for the shuttered topless bar. All were disqualified by the Federal Government for having ties to Rizzolo, but Judges Glass and Foley did not pay attention.

The following CONFIDENTIAL letter was given exclusively to INSIDE VEGAS. It was never intended to be seen by the public because it admits that the above offers were less-than-viable:

 

Had either judge taken time to investigate Signorelli or these purported "buyers," the Henrys would today be able to seize Rick and Lisa Rizzolo's assets to satisfy their debt.

Judge Foley's later ORDER also stopped in its tracks the depositions of the Rizzolo's attorneys and the couple's delinquent son.

To show just how disingenuous Rizzolo was, on April 24, 2007, his attorney told Glass that if Henry leined ("encumbered") the Crazy Horse Too property, it would "create an obstacle" to its purported sale.

The attorney didn't tell Glass that all the bidders were phonies. Glass agreed that to allow Henry to proceed might obstruct a sale of the property, but did specify to whom.

Then Glass stated that Rizzolo "would have to agree to same and encouraged counsel stipulate to allow the examination to take place before Mr. Rizzolo is taken into custody so Pltf. knows where the assets are."

Since when has a judge given a convicted racketeer the privilege of having to "agree" to have his hidden assets examined by someone he's owed $9 million dollars for over eight years?

Meanwhile, Lisa Rizzolo had plenty of time -- with the help of the brother of a federal court judge -- to transfer her family's money off shore. And Judge Glass conveniently put Kirk Henry on hold for an indefinite period of time while this was being done.

The Crazy Horse lost its value -- not because the government "would not comply with its plea agreement" --  but because of our nation's current economic downfall. The devaluation of the Crazy Horse happened after Federal Judge Philip Pro removed Kirk Henry from first position and gave that position to a failed California bank that stupidly loaned the Rizzolos $5 million dollars that they promptly stole. Judge Pro did this knowing that the closed down topless bar's value had fallen below the $5 million owed the bank in these hard times, and there was no money left for the Henrys unless they could get Glass to give them a judgment against the Rizzolos.

Judge Glass has so far killed all chances of the Henrys ever being paid, and secured the Rizzolo's assets from seizure, at least from the Henrys.

It's not yet known what effect Judge Glass' decision in the Henry case will have on other creditors including the IRS, but it will take years and thousands of dollars in legal fees for the Henrys to possibly be able to collect what they are owed.

But that was not all Judge Glass did to help the Rizzolos. On January, 13, 2009, Glass coddled the Rizzolo's 26 year old son Dominic (left photo) after he stabbed a man in the chest during an extortion attempt. Police asked her to convict Dominic of attempted murder, but Glass gave him probation and let him leave the state to work in Florida for one his his father's (right photo) cronies in the time share business.

Now she may be asked to find space on her busy court calendar to hear why Kirk Henry believes he has a viable claim against the Rizzolos personally. Based on Judge Glass' (and her husband's) past performance, few are giving Henry any chance of prevailing within his lifetime.

While this is going on, Rick Rizzolo is bragging that he's putting together a new group who will buy back the Crazy Horse Too and let him secretly run the place. He has told sources that his crony Oscar Goodman is poised to give the new "owner" a liquor license, and it's suspected that twice convicted felon Vinnie Faraci, one of Rizzolo's former mob bosses and a client of Goodman's law partner David Chesnoff, will be the front man.

Kirk Henry remains confined to an electric wheelchair and is suffering the physical problems losing one's mobility can cause, while Rick is regularly observed squandering tens of thousands of dollars nightly on the Strip.

Could it be that Rick Rizzolo's "whale" status, and his habit of losing millions of ill-gotten dollars per year gambling at the MGM, Hard Rock, and Palms is the incentive for the two judge's recent actions?

Several hotels relish Rick's gambling binges and might intervene to make sure they continue, especially in these lean times.

And Rizzolo's son Dominic told an INSIDE VEGAS source last week that he too gambles, up to $12,000 per night in Vegas casinos. When asked where he gets the money, he reportedly said, "My dad is rich."

The casinos run this state. Are whales so precious that the mention of shutting one down -- one who is squandering money owed to the IRS, City of Las Vegas, and a beating victim -- is enough to obstruct justice?

I believe the real story here is that the casinos will/can protect their high rollers in local district and federal courts, in the office of District Attorney David Roger, and in local news rooms. INSIDE VEGAS remains the only local or national investigative commentary telling this sordid story.

With such political pressure mounting, I have the deepest sympathy for Mr. and Mrs. Henry's loss of their latest legal battle.

Hopefully, Judge Philip Pro will step back in and put an end to this injustice before there are more Kirk Henrys.

Judge Glass or Judge Foley could have easily ruled that there was sufficient evidence of fraud involved in the original settlement agreement between Rizzolo and Henry -- the evidence was overwhelming -- and reduced the settlement to a judgment, but they both declined.

Now it's up to the Henrys to raise the funds to pay for additional years of expensive litigation in Judge Glass' court. And there is no guarantee they will be able to convince a politically motivated judge to change her mind. Also, it's too late to remove Glass, and I doubt she would agree to step down now that her husband has announced interest in higher office.

For it to be allowed that Rick and Lisa Rizzolo keep their fortune; not pay their taxes; their delinquent son to go free after attempting to kill someone; and for a quadriplegic to suffer as he has all in the name of keeping a whale alive, indicates that Las Vegas has become the modern day equivalent of the Titanic -- a sinking ship with its radio operators prohibited from tapping out an SOS.

Until this travesty is resolved, enter Las Vegas at you own risk.