Owners of two strip club meet to negotiate settlement

Monday, April 15, 2002 | 9:18 a.m.

Palomino Club managers have entered into negotiations with rival Olympic Garden owner Pete Eliades to drop his just-filed racketeering lawsuit against them.

Both sides met Friday -- two days after Eliades publicly laid out a massive conspiracy case against his adult nightclub competitors -- to set up the framework for a settlement.

The District Court complaint accused the Palomino Club operators, Simon H. Stertzer, Luis A. Hidalgo, Jr. and Alex Gherghe, of conspiring with Las Vegas cabbies to steal thousands of dollars in business from him each night.

"They are not conceding they are breaking the law, but they are making a smart business decision by doing what they're doing, and I respect them for doing it," said attorney Dominic Gentile, who represents Eliades. "They have told us they want to work on the same side with us."

As a sign of good faith, Gentile said, the Palomino Club officials agreed Friday to immediately stop paying cabbies cash to bring customers to their all-nude North Las Vegas cabaret.

Eliades alleged in his suit that his competitors were handing out kickbacks, as much as $20 a head, to cabbies to lure customers away from the Olympic Garden.

Palomino attorney Brad Richardson said there was no "factual basis" to the complaint and that he was appalled to see his clients unfairly linked in the suit to the negative racketeering term.

But he added that his clients also weren't anxious to get bogged down in a lengthy legal battle with Eliades.

"We'll try to work together and cooperate with him," Richardson said. "We want to come to some mutual resolution so we don't have to spend money on litigation."

If a deal can be reached, Gentile said, the Palomino Club would have to open its books to Eliades and help him identify cabbies he believes have been receiving cash to unlawfully divert passengers away from his topless club.

The racketeering case still would proceed against 290 unidentified drivers and supervisors from 13 taxicab companies if the Palomino Club managers were dropped as defendants, Gentile said.

Richardson said his clients, like Eliades, want to stop cabbies from diverting passengers.

"There's a common problem we're all concerned about, and we're certainly on the same side of the fence with regard to that issue," Richardson said.

Eliades has refused to give money to cabbies, fearing it gives them an incentive to defraud the public. 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.