Court to review Galardi fine

Sito Negron

Monday, Feb. 9, 2004 | 9:44 a.m.

Both sides agree that the city of Las Vegas' fine against Jack Galardi was overcalculated by $78,000. The rest will have to wait until a judge sorts out the issue of whether the city had jurisdiction to fine the strip club mogul more than $1 million for crimes admitted to by his son, a former business partner.

District Judge Jennifer Togliatti has set Friday as the first deadline to assess information regarding the city's intent when it passed rules that allow disciplinary action to be taken against a liquor license holder who commits crimes.

"As much as I would like to be able to render a final decision ... the more the court reviews the pleadings the more information the court needs," Togliatti said last Friday, ordering the stay "until such time as the court has had an opportunity to (review) the additional briefings."

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

Until October, when he surrendered his share in the company, Michael Galardi was a 40 percent owner of La Fuente, a corporate partnership with his father that held the topless club Cheetahs.

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 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, the 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.

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

Friday, he said he was happy with the court's decision to stay the fine.

"I came here to get a stay, and we got a stay," Gentile said.

William Henry, the city's chief litigation counsel, declined comment.