Columnist Jeff German: Rizzolo to feel long arm of law

Wednesday, July 20, 2005 | 10:38 a.m.

Fate is winding its way to Rick Rizzolo, the embattled owner of the Crazy Horse Too strip club.

Back in April, I reported that Rizzolo and federal prosecutors had gotten serious about striking a deal to resolve a decade-long racketeering investigation FBI agents built against him.

Rizzolo, linked to various organized crime figures over the years, even started fixing up his popular topless club in the hopes of selling it.

For a while, the secret negotiations squelched talk of Rizzolo's "imminent" federal indictment, a courthouse rumor that had been running rampant for months.

But now that talk has been revived, and it's an indication that Rizzolo's negotiations with the government in the past three months have not gone as well as expected.

Both sides, I'm told, are still talking, and there's a glimmer of hope that a deal can be reached.

But the odds now favor an indictment coming down in the near future.

Rizzolo, meanwhile, remains a hot item elsewhere on the legal scene.

He was scheduled to give a sworn deposition today in the civil suit brought against the Crazy Horse Too by Kirk Henry, a Kansas City man who suffered a broken neck during a 2001 altercation at the club.

Former federal prosecutor Stan Hunterton, who represents Henry's wife, was to lead the questioning.

Hunterton, once a member of the Justice Department's Organized Crime Strike Force in Las Vegas, has been working hand-in-hand in the case with Henry's lawyer, Don Campbell, another ex-federal prosecutor with expertise on the mob.

The two lawyers have been dogging Rizzolo over his suspected underworld ties for the last four years.

One of the things likely on Hunterton's mind heading into today's deposition was the FBI revelation this week placing Rizzolo at a high-level meeting of Chicago crime family members in May 1999.

Chicago FBI agent John Mallul told the Illinois Gaming Board during a hearing Monday that the group, which included the aging Joey "The Clown" Lombardo, met with the mayor of Rosemont, a Chicago suburb, to discuss the mob's control of an ill-fated casino planned in the area.

The information, Mallul said, came from a reliable confidential source who attended the 1999 meeting.

The mayor, Donald Stephens, denied participating in the meeting, and the Gaming Board incorrectly spelled Rizzolo's name as "Rissoulo" when questioned by Chicago reporters after Monday's hearing. That's how the name appeared in news stories.

But spokesmen for both the Illinois Gaming Board and the Chicago FBI office told me Tuesday that the correct spelling was indeed Rizzolo. And the board spokesman said it was the same Rizzolo who owns the Crazy Horse Too in Las Vegas.

Mallul described Rizzolo to the Gaming Board on Monday as an organized crime associate.

Law enforcement authorities in Las Vegas have long accused Rizzolo of having ties to Chicago and New York underworld figures, a charge he has denied.

Until recently, Lombardo's younger brother, Rocco, was a trusted Crazy Horse Too employee. The elder Lombardo was among the ranking underworld figures indicted in April in Chicago in a string of unsolved mob hits -- including the 1986 killing of Anthony Spilotro, who once ran street rackets in Las Vegas for the Chicago crime family. Lombardo currently is on the lam.

Rizzolo's longtime lawyer, Tony Sgro, meanwhile, denied Tuesday that Rizzolo was present during the 1999 meeting of top Chicago mobsters.

"The story is 100 percent unsupportable," Sgro said. "It's a fabrication and illustrative of the problem law enforcement has when it reaches to the underbelly of society to make cases stick."

As fate would have it, Sgro's high-profile client is about to find out how long the arm of the law can reach.