Council could reconsider club deal

Friday, Dec. 22, 2006 | 7:09 a.m.

Concerned over allegations they may have been duped into agreeing to a deal that conceals the true ownership of a popular topless club, Las Vegas City Council members said Thursday that the charges could prompt them to reconsider their decision.

In a federal lawsuit filed last week, former Miami nightclub owner Athanasios Karahalios charges that Crazy Horse Too landlord Rick Rizzolo's leasing of the club to restaurateur Mike Signorelli is a ruse designed to allow Rizzolo - under court order to sell the topless club - to continue calling the shots.

"Obviously, this is very disconcerting," said Councilwoman Lois Tarkanian, whose ward included Crazy Horse Too until the council drew new boundaries earlier this year.

"There definitely was a concern voiced by the City Council in October that there would be no role for Rizzolo at the Crazy Horse Too. If any of this is substantiated, the City Council would have to look at it again and review its decision."

Karahalios, known as Tommy Karas on the South Beach social scene, alleges in the suit that Rizzolo's deal with Signorelli has unlawfully interfered with his five-month effort to acquire Crazy Horse Too. Rizzolo must sell the strip club as part of a tax-evasion plea agreement approved by U.S. District Judge Philip Pro.

The 31-year-old Karahalios contends that Rizzolo signed an agreement in October to sell him Crazy Horse Too for $48 million, but reneged after Karahalios refused to structure the deal to allow Rizzolo to become a secret partner. Signorelli, who reportedly is pursuing an option to buy the club for $45 million, is merely a front to conceal Rizzolo's continued control over the topless club, Karahalios charges.

"It's been five months of deception," Karahalios said Thursday. "Rizzolo is determined to maintain a hidden interest in the club."

The City Council gave Signorelli a three-month liquor license Oct. 18 on the condition that Rizzolo and his relatives have nothing to do with the club's operations.

"I would hope that the city attorney's office looks into this," said Councilman Gary Reese, whose ward now includes Crazy Horse Too.

"On the face value, this looks terrible. We tried to make sure that this kind of thing would not happen."

Reese said the accusations, although yet unproved, are likely to be discussed when Signorelli and Rizzolo return to the City Council in mid-January to discuss the renewal of Signorelli's liquor license.

Rizzolo's longtime attorney, Tony Sgro, has dismissed Karahalios' allegations, saying the claims in the lawsuit "cannot be substantiated."

Similarly, Signorelli's attorney, Steve Caruso, called the allegations "completely false."

City Attorney Brad Jerbic could not be reached for comment Thursday.

Rizzolo is scheduled to be sentenced in federal court Jan. 16 in the tax case.

Assistant U.S. Attorney Eric Johnson, who will represent the government at the sentencing, did not return phones calls seeking comment on whether the allegations will have any impact on the punishment facing Rizzolo.