Brothel files for bankruptcy protection

Friday, Sept. 4, 1998 | 9:54 a.m.

Assistant U.S. Attorney Mike Barr said the brothel is taking in $20,000 a day but hasn't put any money in the bank in weeks.

Meanwhile, the Mustang is "hemorrhaging hundreds of thousands of dollars," he told U.S. District Judge Howard McKibben on Thursday.

The developments came the same day the brothel's owners entered innocent pleas to a 33-count federal indictment charging them and former Mustang owner Joe Conforte with racketeering and money laundering among other crimes.

Hearings on the bankruptcy applications are scheduled for Oct. 5 and the criminal trial has been set for Oct. 13. It's not likely it will begin that soon.

McKibben authorized Ronald Meseberg, a special agent for the U.S. Customs Service, to have access to all Mustang Ranch property, including financial records, to audit its income and assets.

In the bankruptcy filing, A.G.E. Corp., the holding company that owns A.G.E Enterprises Inc., lists assets of $4.8 million and liabilities of $48.6 million in federal tax liens.

A.G.E. Enterprises lists assets of $31 million and liabilities of $32.1 million.

The ranch is continuing to operate, as is the neighboring Old Bridge Ranch, which also is in bankruptcy reorganization.

It is run by David Burgess, who is the nephew of Conforte's widow, Sally.

Burgess claims that Conforte continues to hold a hidden interest in the Mustang Ranch and is trying to put the Old Bridge Ranch out of business so he can take it over if the federal government closes the Mustang Ranch.