Conforte still owns brothel, IRS claims

Thursday, Jan. 30, 1997 | 11:59 a.m.

The IRS on Tuesday filed petitions in Washoe and Storey counties against Conforte for income tax allegedly owed for nine years beginning in 1977 and ending in 1992, the Reno-Gazette Journal reported.

The latest tax liens come just months after the IRS released millions of dollars to tax liens against Conforte, who is under indictment on fraud charges stemming from the Mustang's bankruptcy in the early 1990s.

An indictment handed up in 1995 but kept secret until last year charged Conforte and his long-time lawyer, Peter Perry, with scheming to buy back the bordello after it was seized by the Internal Revenue Service for back taxes and sold at auction in November 1990.

The indictment accused them of using money in a secret Swiss bank account to buy the brothel at the auction through a corporation called Mustang Properties. Peter Perry's brother, Victor Perry, submitted the winning bid at $1.49 million.

Peter Perry was listed as a company officer. Conforte stayed on as manager of the Mustang until August 1991, when he said he was retiring and disappeared from the public scene.

In February 1992, Peter Perry said the brothel was sold.

Perry pleaded guilty in December to wire fraud and is scheduled to be sentenced in March.

A business license lists A.G.E. Corp. as the Mustang's current owner.

But the federal tax liens identify the corporation as the "nominee, alter-ego and transferee" of Conforte.

Herbert F. Ahlswede, A.G.E. lawyer, disputed the allegations and said Conforte has no interest in the company or its subsidiaries.

"From the information available to me as general counsel for A.G.E., I feel that the contentions of the Internal Revenue Service can be refuted and the liens removed from A.G.E properties," Ahlswede told the Gazette-Journal.

Ahlswede credited the tax liens to Peter Perry, who is cooperating with authorities in the case against Conforte.

But Perry's attorney, Donald Hill echoed the federal government's contention.

"I'm not surprised the liens were filed ... because it's always been my information that the Mustang Ranch has been and continues to be owned by Joe Conforte," he said.

Conforte reportedly is out of the country. On Dec. 5, the day after Perry pleaded guilty, he took out a large newspaper advertisement and called the Gazette-Journal to say he would return to United States when his doctors allow it to face the charges against him.

"I have committed no crimes that I know of. I have no financial interest of any kind anywhere in the United States," Conforte said at the time.