Brothels and strip clubs get customers, cabbies get cash

Sunday, May 27, 2007 | 7:12 a.m.

Detective Jeff Gentry is undercover in Chinatown, waiting for a taxi driver he tapped to negotiate the price for a night in a neighborhood brothel - a plain vanilla apartment with cream leather sofas and soft music piped over a haggling housemother, who tells the driver that she charges $150 for "full service."

Gentry knows the brothel's base rate, but expects the cab driver to quote him $300 and poof! - pocket the rest. He does.

A working girl wearing a white robe and nothing else offers Gentry a drink. He declines.

By then, his cab driver is out the door, $150 richer.

Not bad for 20 minutes of work. Welcome to the wide world of kickbacks - the quick cash transactions keeping Las Vegas' salacious side alive.

Although the statement is apt to infuriate them, taxi and limo drivers who take kickbacks from illegal brothels and strip clubs are crucial to keeping such businesses afloat.

Drivers often act as brokers for brothels, shuffling tourist johns to hidden locations, setting the fees and taking their cut. And because brothel owners need tourists chauffeured to their doors, they advertise to drivers, handing out business cards in the taxi lines outside casinos, each with a kickback quote and number to call.

Same goes for strip clubs, where cabbies cash in for dropping off clients.

When Gentry and another undercover detective pose as two rubes looking for a lap dance, they get a taxi to take them to a strip club and watch the driver pocket $60 for it from the club.

With an entrance fee at about $20, lap dances at negotiable prices and Budweisers at $9, the strip club can afford to kick back $30 a head.

Like brothels, strip clubs bet they'll make it all back.

Sitting outside the Rio, a taxi driver piloting a minivan - call him Joe, because he doesn't want his name in the paper - boasts about his brothel connections. He pulls out a small card advertising kickbacks at a new bordello. The payoffs are stunning: One client nets him $200. Additional clients net another $200 each, up to $800.

"Someone gets in the cab and they want to get laid, all we do is we make a call," he says.

Here's how it works: Joe learns that a brothel is open and offering kickbacks. He calls the brothel and is assigned a personal identification number. The next time Joe has an interested passenger, he calls the brothel with his PIN and gets the going rate. On arrival, he takes the john's money, gives it to the brothel, gets his kickback and depending on the client's wish, Joe waits or Joe splits.

"I work with the real deal," he says. "If they want to get laid, they're gonna get laid."

During Operation Dollhouse, the two-year investigation into illegal brothels that ended in April with seven people arrested and 25 prostitutes detained, police charged John Gregory Keyes, 50, with nine counts of living off the earnings of a prostitute, charges that police reports indicate Keyes fessed up to when he was discovered at a known house of prostitution off Spring Mountain Road at 2:30 a.m. on a Saturday night.

At the time Keyes was arrested, he was employed as a taxi driver, according to the Nevada Taxicab Authority.

Police did not respond to questions about what role Keyes played in the prostitution ring. Taxicab Authority records indicate Keyes has since been terminated.

(It's worth noting that the San Mateo, Calif., sheriff and undersheriff were detained, questioned and released at one of the massage parlors raided during Operation Dollhouse. They said they got into a limo and told the driver they wanted a massage because they were sore from a Las Vegas charity run - but not the kind of massage, they insist, the confused limo driver somehow thought they meant.)

The local brothel business has tried to button itself up since Dollhouse, police say, but the bottom line remains: If brothels slip too far under the radar, or keep their kickbacks too quiet, they'll never get cabs to come with clients.

Short-staffed on a slow week night, it takes seasoned Metro vice detectives no more than 20 minutes to find a brothel, half an hour to get inside and case the place.

Prostitution is illegal in Clark County, but taking kickbacks isn't. As long as a passenger is delivered to his or her desired destination, tips are allowed. It's diverting a passenger, pushing a person into going to one place over another, that gets a cab driver in trouble.

This is where strip clubs get involved, and the kickback game becomes much more complicated. And costly.

To court cabbies, strip clubs have waged kickback wars, continually upping the ante to edge out the competition.

On peak nights, cabbies have reported making $80 a head.

(Cab drivers caught diverting face a $500 fine, suspension and possible licen se revocation. Cab drivers who take inquiring johns to brothels are typically charged with prostitution-related offen ses, such as pandering, aiding and abetting, furnishing transportation for prostitution .)

When a 2005 Assembly bill threatened to make kickbacks illegal, cab drivers threatened strikes and held mass honking sessions, saying tips are the hard-working driver's bread and butter. Then-Gov. Kenny Guinn vetoed the bill.

That December a strip club coalition, the Nevada Association of Nightclubs, decided to ban kickbacks. Bounties reportedly rose so high that the entire strip club community was hurting: spending too much to lure clients or losing too much to clubs willing to pay more.

When it became clear in 2006 that some strip clubs weren't abiding by the kickback agreement, the association started filing lawsuits and hiring private investigators to prove palms were still being greased.

Association attorneys hired private investigator Hal De Becker to catch cab drivers diverting strip club clients for kickbacks.

After four nights of hailing cabs, De Becker had seen enough.

When he asked to go to the Palomino Club (a member of the association then not paying kickbacks), cab drivers gave all sorts of reasons why they wouldn't take him: The surrounding neighborhood is a ghetto, the cover charges are too high, it doesn't serve alcohol ( it does), other clubs are better.

One cab driver, a woman, told De Becker the Palomino was a place where old strippers went to die.

Drivers who got comfortable, De Becker says, opened up about the kickbacks. Some said they were getting more than cash: DVD players, flat-screen TVs, even an evening at a legal brothel. Other clubs were handing out swipe cards, scanning drivers as they came in, racking up points for prizes.

The nightclub association's attorney, Dominic Gentile (who acquired the Palomino Club in March 2006 as payment for defending the previous owner in a murder investigation), alleges strip clubs are doing more than diverting customers: They're committing massive tax fraud, writing off the kickbacks as a business expense and not reporting the driver's income to the Internal Revenue Service.

Gentile hired a former IRS agent to investigate the fraud that he's certain is occurring. What Gentile's not certain of, however, is whether the association's lawsuit will go forward.

In fact, it's not even clear whether the Nevada Association of Nightclubs still exists.

Former association members told the Sun the coalition slowly dissolved last year because of lack of interest, but wouldn't be quoted.

Sources close to the association say the strip club owners realized they'd probably spend more money on litigation and private investigators than they would just giving in and paying the kickbacks.

Gentile recently sent letters to association members, asking whether they're still interested in their case.

Interim Chief Investigator Joe Dahlia has been working for the Nevada Taxicab Authority for 18 years. Kickbacks have always been a topic of discussion, he says, and the difficulty with diversions hasn't changed: Money talks.

Brothels pay bigger bounties, so it makes sense that cab drivers pushed bordellos on private investigator De Becker.

One driver asked whether De Becker was a cop, and satisfied that he wasn't, suggested the investigator visit Sensations, a massage parlor on Industrial Road where De Becker could get "full service" for $160.

Detectives raided the business this month and arrested customers who admitted they were there for more than massage.

Standing in the living room of the Chinatown brothel, a working girl offers to "sleep" with Gentry, ushering him into a back bedroom where there is a mattress on the floor, white sheets and white towels. The usual. Gentry sizes it up and makes an excuse to leave.

Waiting outside, Detective David Hunkins takes careful notes: the time, the place, certain quotes from the conversation, which aren't fit for print.

"We'll be back," he says.

There are 6,477 taxicabs driving the streets of Las Vegas and about 1,000 limos, Dahlia says. Even if one of his 25 investigators heard of a driver doing kickback diversions, how would he prove it? By asking the driver, or the person paying the bounty?

"If I had the answer," Dahlia said, "I could probably retire."

archive