Strip club didn't want to pay $8mn in taxes. So they gave the auditor lap dances

An American company that owns strip clubs across the country gave away free lap dances to an auditor in order to avoid paying $8 million in sales taxes to New York City and the state of New York. A prosecutor in the case alleged that the executives bribed a government official with free trips to some of the clubs and spent thousands of dollars on him. New York Attorney General Letitia James said the alleged scheme involved Houston-based RCI Hospitality Holdings. She said that company executives and the corporate leaders did so from 2010 to 2024 for at least six tax audits. RCI Hospitality owns and operates more than 60 clubs, sports bars and restaurants in the US. Their most popular establishment is Rick's Cabaret, which is located in more than a dozen cities, including New York City. Prosecutors alleged that the auditor was given at least 13 complimentary, multiday trips to Florida, besides up to $5,000 per day use for private dances at the company's strip clubs. A company executive also accompanied the unnamed auditor on these trips. Also Read: Luigi Mangione's terror charges dropped, but he could still face death penalty: Here's how

RCI Hospitality rebuffs the accusations of bribery

A grand jury indictment in the case was unsealed on Tuesday and charges RCI, five of its executives and the three clubs in Manhattan with conspiracy, bribery, tax fraud and other crimes. “RCI’s executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes,” James said in a statement. “I will always take action to fight corruption and ensure everyone pays their fair share.” Meanwhile, the lawyer for RCI, Daniel Horwitz, termed the allegations false and “baseless” and said his clients were "innocent." “We are clearly disappointed with the New York Attorney General’s decision to move forward with an indictment and look forward to addressing the allegations," Horwitz said in a statement. He added that RCIs always paid “all legitimate and non-contested taxes".

Those indicted at RCI in the bribery case include Eric Langan of Bellaire, Texas, chief executive officer, president and board chairman; and Timothy Winata of Houston, a controller and accountant. According to the prosecutor, Langan authorised the money for the bribes, while Winata directly handed the bribes and even went with the auditor on these trips to their strip clubs. Winata also travelled from Texas to Manhattan to give the bribe to the auditor when he was at Rick's Cabaret, Vivid Cabaret and Hoops Cabaret and Sports Bar, in Manhattan, prosecutors said. A sixth person has also been arrested in the case, although James's office did not say whether it was the auditor. His name has been redacted in the indictment, but what is known is that he worked for the New York State Department of Taxation and Finance. Amid the charges, the company continues to keep the shutters up of all three of its Manhattan clubs.