Jury orders Mustang Ranch turned over to federal government

Tom Gardner

Friday, July 9, 1999 | 7:16 a.m.

RENO, Nev. - A federal jury on Friday ordered the owners of the Mustang Ranch to turn it over to the government, a decision that won't take effect for a month, when the brothel will be shut down, perhaps forever.

The Mustang Ranch and an array of other properties were owned by two shell companies prosecutors successfully argued were set up solely to hide the identity of the true owner, fugitive brothel baron Joe Conforte.

The jury agreed with prosecutors in verdicts handed down Thursday that A.G.E. Enterprises Inc. and its holding company, A.G.E. Corp. Inc., existed to conceal Conforte's ongoing involvement.

The panel on Friday also ordered that the two companies forfeit $20 million each and that former Storey County commissioner and former Mustang Ranch madam Shirley Colletti surrender $220,000 for taking part in the intrigue.

"There is no justification to let any of these entities retain any of these assets," Assistant U.S. Attorney Gregory Damm told the U.S. District Court panel.

"Forfeiture is to disable a criminal enterprise and to punish the criminal activities," he said.

Ms. Colletti's attorney disagreed.

"She worked at the ranch but did not participate in any ownership," Scott Freeman told the jurors.

In addition to the gated brothel off Interstate 80 about 15 minutes east of Reno, the two straw companies will surrender real estate ranging from vacant lots to a mobile home park.

Judge Howard McKibben issued preliminary orders for all the forfeitures effective immediately so the government could begin identifying the assets.

Only the order for the brothel was postponed Aug. 9 so people there could make arrangements to move out.

The government will seize the bordello at that time and padlock it. Damm said he did not know what will become of the buildings.

"It will not be an operating brothel," he said, declining to say whether it would ever reopen as one.

Ms. Colletti said she was devastated.

"If I was guilty, I would have taken all those deals they offered me," she said. "All the money I have to pay back is money I earned working 24 hours a day."

Outside the courtroom, Ms. Colletti's other attorney, David Houston, was more outspoken.

"Why doesn't the government get off its lazy butt and go arrest Conforte instead of picking the pocketbook of a 63-year-old woman?" he asked. "They know where he is. They even know his phone number.

"They could invade Panama to get Noriega, but they don't bother to get Conforte."

Ms. Colletti was convicted on 12 counts, including two of racketeering, and acquitted of 11. The two companies were convicted on all 23 counts they faced.

A.G.E. attorney Richard Sherman spoke briefly before the jury began its forfeiture deliberations on Friday, expressing resignation that the panel accepted the testimony of admitted conspirators over that of Ms. Colletti and others called by the defense.

"If you're going to ding somebody, ding A.G.E.," he said. "She was just doing her job."

Sherman had left town before the jury returned.

The last time the Mustang was in federal control was in 1990 after Conforte fled the country to escape prosecution for tax evasion and the Internal Revenue Service padlocked the brothel.

This time, McKibben said there would be no government operation of the brothel, throwing about 75-80 salaried employees out of work in addition to 60 or so prostitutes.

Ms. Colletti said that would just put the women out on the streets and would leave the Old Bridge Ranch the only brothel operating in the county.

"If I were still on the commission, if the Mustang had to close, they all would have had to close," she said.