Galardi’s $1.1 mil. fine put on hold

Sito Negron

Friday, Feb. 6, 2004 | 11:24 a.m.

District Judge Jennifer Togliatti this morning put on hold the more than $1 million fine that the Las Vegas City Council had leveled against strip club mogul Jack Galardi.

Togliatti said she wanted more information from both sides before she makes a final decision on enforcement of the fine. She said she'd like to assess the progress sometime next week.

Among other things being considered is a reduction in the $1.095 million fine.

Galardi was fined by city council a month ago because of crimes admitted to by his son Michael, a former business partner.

Michael Galardi was a 40 percent owner of La Fuente, a corporate partnership with his father that held the topless club Cheetah's. According to city of Las Vegas rules, actions committed by a principal liquor license holder can subject the license to penalties, including fines of up to $1,000 a day for each day of violation and revocation of the license.

Michael Galardi's self-admitted actions -- which included bribing three San Diego city council members to gain favorable treatment for his clubs there -- merited discipline, the city attorney and business license manager claimed. On Jan. 7, Las Vegas City Council decided not to revoke the liquor license, instead following Mayor Oscar Goodman's motion to fine Cheetah's $1.095 million.

That was based on the time frame during which Michael Galardi committed the actions that led to his plea agreement -- from August 2000 to May 2003. However, city lawyers admitted in court Thursday they had overcalculated the number of days involved, and agreed that the fine should have been $1.017 million, something that came up during the Jan. 7 council meeting.

At that meeting, William Henry, senior litigation counsel for the city, asked if the fine could be slightly less than $1.095 million.

"Because the dates aren't certain and because I wouldn't want to find if it was voted to be declared by a court to be totally illegal -- could the amount of your motion for a fine be slightly smaller than $1.095 million, like maybe an even million?" Henry asked Goodman, according to a transcript of the meeting provided in Gentile's filing.

Goodman replied, "No. $1.095 million, that's what you said your calculations were."

Thursday, the mayor said that he would accept a check for a lesser amount "if I was wrong with my math."

Goodman said Thursday he was disappointed that the elder Galardi chose to appeal the fine, and said the city expected to receive a check by today or it would take action. When asked whether that was a threat, he said it was not: "I don't want to get in the face of the judge."

Gentile claimed several arguments support his motion to have the fine thrown out, chief among them that the city had no jurisdiction to levy the $1.095 million penalty.

"Their law requires there be a conviction of a principal before a licensee can be disciplined for it," said Gentile, pointing out that Michael Galardi pleaded guilty to charges involving corruption in San Diego, but never was convicted in court.

Gentile's argument that a conviction is necessary before the city can punish a license-holder stems from municipal code 6.02.330, paragraph C, which states that disciplinary action is warranted if the licensee or any of its principals have been convicted. During the Jan. 7 council hearing, Goodman referred to 6.02.350, which states that the licensee is liable for acts committed by its principals, and does not require a conviction.

Gentile contended that if two parts of the code are not in accord, the specific -- "requiring a conviction" -- will take precedence over the general.