Thursday, Dec. 21, 2006 | 7:21 a.m.
Just weeks before his sentencing on tax evasion charges, Crazy Horse Too landlord Rick Rizzolo has been hit with a federal lawsuit charging that his leasing of the topless club to restaurateur Mike Signorelli is a ruse designed to allow Rizzolo to continue calling the shots.
Former Miami nightclub operator Athanasios Karahalios, known as Tommy Karas on the South Beach party scene, alleges in the suit that the deal with Signorelli has illegally interfered with his effort to buy the popular topless club.
Both Rizzolo, who is scheduled to be sentenced by U.S. District Judge Philip Pro on Jan. 16, and Signorelli, the owner of the Golden Steer Steakhouse, are named as defendants in the 19-page suit, filed last Friday.
Las Vegas attorney Marc Cook, who represents Karahalios, said Wednesday that his client has a contract, signed by Rizzolo in October, to buy Crazy Horse Too for $48 million. As part of his plea agreement on the tax evasion charges, Rizzolo must sell the club.
"He's a ready, willing and able buyer with a signed agreement," Cook said of Karahalios. "He wants the club."
But instead of selling to Karahalios - the former owner of a South Beach dance club - Rizzolo is dealing with Signorelli, who is pursuing an option to buy Crazy Horse Too for $45 million, Cook said.
On Oct. 18, the Las Vegas City Council gave Signorelli a temporary liquor license to run Crazy Horse Too on the condition that Rizzolo and his relatives have nothing to do with the club's operation. Signorelli's attorney, Steve Caruso, could not be reached for comment Wednesday.
In the lawsuit, Karahalios alleges that Signorelli is merely a front to conceal Rizzolo's continued control of the club.
Rizzolo "never intended to give up his true ownership in Crazy Horse Too," the suit said, adding that "the true nature of the fraud was revealed through the straw sale to Signorelli."
Rizzolo's attorney, Tony Sgro, insists Rizzolo's dealings with Signorelli are legitimate and dismisses Karahalios' allegations.
"The claims in the lawsuit cannot be substantiated," Sgro said.
Karahalios said in the suit that his deal to buy Crazy Horse Too soured after he refused to structure the purchase in a way that would allow Rizzolo to remain a hidden partner.
During face-to-face discussions between Rizzolo and Signorelli in the days after the Oct. 18 City Council meeting, the suit said, both men proposed a "joint venture" with Karahalios.
At the time, Karahalios believed that Signorelli was acting as Rizzolo's business agent to facilitate the sale to the Miami businessman.
"Rizzolo and Signorelli advised that this would allow the liquor license to stay in place, would allow Rizzolo to maintain an apparent silent interest in the entity and would allow (Karahalios') participation as well," the suit said.
But Karahalios, the suit said, refused to go along with "an illegal deal."
Signorelli then took conceptual designs, development plans and financial information that Karahalios had provided and pursued his own purchase agreement, the suit alleges.
The lawsuit seeks monetary damages from Rizzolo and Signorelli and asks that a court-appointed receiver be put in charge of Crazy Horse Too during the litigation to ensure that Karahalios - not Rizzolo or Signorelli - ultimately receives the club's daily profits.
Assistant U.S. Attorney Eric Johnson, who will represent the government at Rizzolo's sentencing next month, could not be reached for comment Wednesday on whether the suit could affect Rizzolo's punishment in the tax evasion case.
Rizzolo faces up to 16 months in prison and nearly $17 million in fines, forfeitures and settlements. In addition to compelling him to sell Crazy Horse Too, the plea agreement orders Rizzolo to stay out of the topless club business for the rest of his life.
Rizzolo pleaded guilty to tax evasion in May as part of a deal with the FBI to end a decadelong racketeering probe at his club. Sixteen of his employees also pleaded guilty to criminal charges in the deal.
archive
