Topless club suit claims cabbie kickbacks

Thursday, April 11, 2002 | 11:01 a.m.

Olympic Garden topless nightclub owner Pete Eliades filed a racketeering lawsuit in District Court Wednesday, accusing managers of a popular rival adult nightclub of conspiring with Las Vegas cabbies to steal business from him.

The 20-page suit, prepared by attorney Dominic Gentile, named the operators of the Palomino Club in North Las Vegas -- Simon H. Stertzer, Luis A. Hidalgo, Jr. and Alex Gherghe -- as defendants.

Also named were 290 unidentified drivers and supervisors from 13 of the 16 Southern Nevada taxicab companies, including those owned by Yellow Checker Star Transportation, where Eliades has a financial interest.

The suit alleged the defendants carried out a massive racketeering conspiracy to unlawfully divert passengers away from the Olympic Garden, 1531 Las Vegas Blvd. South, to the all-nude Palomino Club three miles down the street, costing Eliades thousands of dollars in business each night.

Cabbies are being paid cash kickbacks, as much as $20 a head, to disparage the Olympic Garden and persuade passengers to come to the Palomino Club, the suit charged.

"The Olympic Garden is directly damaged by the loss of the money that the passenger ... would have spent at the Olympic Garden," the suit said.

Parties for to the lawsuit were immediately unavailable for comment this morning.

Eliades has refused to give money to cabbies, fearing it gives them an incentive to divert passengers from their intended destination, a practice that is illegal under state law. His outspokenness against kickbacks has prompted drivers to stage a boycott of the Olympic Garden, one of the most successful topless clubs in the city.

Earlier this year Eliades and three of his other big rivals, Crazy Horse Too, Club Paradise and Cheetah's, filed suit to stop lesser known adult establishments from offering drivers as much as $40 per passenger in kickbacks.

District Judge Sally Loehrer later issued a preliminary injunction temporarily barring the smaller clubs from tipping the drivers until the case is resolved. The Palomino Club was not named as a defendant in the suit.

Eliades is seeking a similar injunction against the Palomino Club in the racketeering suit, as well as punitive damages to make up for the lost business.

As part of the alleged racketeering activity, the suit said, Palomino Club operators, with the help of cabbies, have been obtaining money from the unsuspecting public under false pretenses. Passengers are not being told that all or part of their $20 admission fee to the club is being given back to the drivers, the suit said.

The suit cited a number of specific examples over the past several months of passengers being diverted from the Olympic Garden to the Palomino Club. It also explained how cabbies have been receiving their cash from a back room at the club.

Limousine drivers also have been receiving money to steer business to the Palomino Club, the suit charged, but no limousine drivers or companies were named as defendants.