First hearing set for today

Jace Radke

Friday, Aug. 29, 2003 | 11:23 a.m.

Las Vegas strip club owner Michael Galardi and three San Diego city councilmen turned themselves in to federal officials this morning, responding to an indictment charging them with wire fraud.

The men were the first of seven named in the indictment to turn themselves in.

Federal officials are calling it a case of political corruption. They allege the men conspired to overturn a San Diego ordinance regulating topless clubs.

Galardi and the three San Diego city councilmen named in the probe -- Ralph Inzunza, Charles Lewis and Michael Zucchet -- were in federal custody pending a hearing in San Diego scheduled before a federal judge this afternoon. The judge was to determine if the men would stay in custody.

Former Clark County Commissioner Lance Malone, who worked as a lobbyist for Galardi and is also under indictment, was to turn himself in Tuesday, his attorney, Dominic Gentile said this morning.

Galardi, Malone and Galardi employee John D'Intino were charged with wire fraud, extortion and racketeering. The councilmen were charged with wire fraud and conspiracy to commit wire fraud for allegedly taking bribes and illegal campaign contributions from Galardi and his associates.

David Cowan, an aide to Lewis, is charged with making a false statement to the FBI.

Based on extensive wiretaps used over a two-year investigation, the 26-page indictment charges that Galardi, who runs Jaguars and Cheetahs strip clubs Las Vegas and Cheetahs in San Diego, Malone and D'Intino tried to overturn the city ordinance that prohibits contact between a topless dancer and a patron.

The indictment alleges that from August 2000 to May 14, 2003, Galardi, Malone and D'Intino used "straw" contributors to disguise the true source of campaign funds paid to the councilmen in an effort to repeal a "no touch" provision at strip clubs. The indictment alleges that more than $25,000 was paid to the councilmen, and more than $45,000 was paid to a San Diego vice detective, who was working undercover.

According to the indictment, on April 7, 2001, Galardi said he would "get Lance down there (to San Diego), just start building little relationships ... then once they know they can trust us believe me they'll (expletive) have that hand out."

The indictment is the first made public in the federal investigations in Las Vegas and San Diego into political corruption and the influence wielded by Galardi.

A "no touch" ordinance similar to San Diego's, that made it illegal for topless dancers to touch patrons at strip clubs, was considered and initially passed by the Clark County Commission last year. That law was repealed due largely to the efforts of commission chairwoman Mary Kincaid-Chauncey and former commissioners Erin Kenny and Dario Herrera, who are all alleged targets or subjects of a parallel political corruption investigation in Las Vegas.

Malone's attorney, Dominic Gentile, said that there is no indication from the indictment that his client has done anything illegal.

"When I read the indictment I was looking for something that Lance Malone said that would make me cringe, but there wasn't anything," Gentile said this morning. "If the allegations in the indictment are true there are others involved who said some really stupid things.

"The government is alleging that there was some kind of structure to these campaign payments, and if that's true Lance Malone didn't know anything about it."

Gentile said that typically in a case like this the worst things heard over the wiretaps are included in the indictment.

"There is nothing in the indictment about Lance Malone that is criminal," he said. "There are contentions that some of the things allegedly said to him were (criminal), and we're going to have to put that in context."

Gentile said that it was something of a relief to have the indictment released.

Peter S. Christiansen, Galardi's attorney, said he had no comment on the indictment, saying only that Galardi will surrender to authorities.

The FBI investigations connecting activity in San Diego and Las Vegas with topless clubs became public when federal agents conducted searches in both cities on May 14.

Agents executed search warrants at Galardi's Las Vegas clubs, Jaguars and Cheetahs, and the downtown offices of Galardi Enterprises. In San Diego agents raided the City Hall offices of Inzunza, Lewis and Zucchet, as well as Galardi's Cheetahs nightclub there.

In Las Vegas, FBI agents were looking for records of payments or gifts to Kincaid-Chauncey, Herrera, Kenny and former Las Vegas City Councilman Michael McDonald. Also named in the warrant was Kincaid-Chauncey's husband, Robert Chauncey, Herrera's wife, Emily Herrera, and Kenny's husband, John Kenny.

No indictments have been handed down by a federal grand jury in Las Vegas in connection with the more than two-year FBI investigation.

Dan Bogden, U.S. Attorney for Nevada, had no comment on the San Diego indictments, or the possibility of related indictments in Las Vegas, a spokeswoman with his office said.

Special Agent Todd Palmer, of the Las Vegas office of the FBI, said that the indictments in San Diego are separate from the parallel investigation here.

"It does not affect the progress of our investigation, and we are continuing to investigate the case jointly with the San Diego office of the FBI," Palmer said.

FBI agents in Las Vegas have not been asked to arrest Galardi or Malone, and arrangements for self-surrender have been offered by authorities in San Diego.

Metro Police will be reviewing the indictments, Undersheriff Doug Gillespie said.

He said Metro would be "very interested to see what they (charges) are, the circumstances involved and what effect it may have on Las Vegas."

Galardi, Kenny and Kincaid-Chauncey have admitted that they have been told they are targets or subjects of the FBI investigation. Agents recently searched Herrera's home and business, but he has maintained he is not a target of the probe. McDonald has also maintained that he is not a target.

Carol Lam, U.S. Attorney for the Southern District of California, said Thursday that the people of San Diego have a right to an open and honest government.

"We are committed to ensuring that San Diego is represented by officials who are free from corrupt influences," Lam said.

A second indictment released Thursday alleges that D'Intino was involved in a conspiracy to obtain machine guns, silencers and pistols with erased serial numbers from Charles Tappe, a man who had possession of the weapons for three months in April.

The investigation utilized wiretaps and surveillance to gather evidence, law enforcement officials said.

"Our elected representatives have a duty to honestly serve the public trust," said Dan Dzwilewski, special agent in charge of the San Diego office of the FBI. "In this case, that duty has been breached, and the trust broken."