Subpoena of Rizzolo sparks buzz of speculation

By Jeff German

Monday, Feb. 23, 2009 | 2 a.m.

Prosecutors have subpoenaed former Crazy Horse Too owner Rick Rizzolo to testify before a federal grand jury this week.

This time last year, he was finishing his 10-month prison sentence for tax evasion.

Rizzolo’s longtime lawyer, Tony Sgro wouldn’t talk about the subpoena. Neither would federal prosecutors. So just why Rizzolo is being hauled before the panel remains a secret.

There’s plenty of buzz, however, around the courthouse about Rizzolo’s pending return to the building, which sources said is being coordinated by Justice Department lawyers from Washington, D.C.

There has been talk that Rizzolo may be wielding influence at another local topless club in violation of his 2006 plea agreement to stay out of the business. There’s also speculation that he may have hid assets from the government in his amicable 2005 divorce.

In court papers last week, Rizzolo denied concealing any money and said he no longer even has cash to hire lawyers to fend off his creditors. He said he’s waiting for the government to sell the Crazy Horse Too “since it’s my only chance to get out of this mess and pay everybody off.”

One of his creditors is Kirk Henry of the Kansas City area, who is owed $9 million stemming from the paralyzing injuries he suffered in a beating outside the Crazy Horse Too in 2001. Henry is suing Rizzolo in federal court for the money.

Some of the speculation about Rizzolo’s grand jury appearance also centers on former City Councilman Michael McDonald, a longtime Rizzolo crony whose personal finances have come under grand jury scrutiny the past two years.

Federal authorities have had an eye on McDonald for years, dating back to his days on the City Council, which ended in 2003.

McDonald did not return phone calls, but his lawyer, Richard Wright, said he knows nothing about federal prosecutors’ plan to put Rizzolo on the hot seat before the grand jury.

Henry’s lawyer, Don Campbell, however, alleged in federal court last month that McDonald may know where some of Rizzolo’s assets went. Campbell tried to question McDonald about his dealings with Rizzolo during a November deposition, but McDonald asserted his Fifth Amendment rights against self-incrimination and ducked the questions.

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Federal drug agents are smiling over Thursday’s jury conviction of a Colombian man linked to an alleged terrorist organization.

Following a federal trial that stretched over two weeks, Luis Angel Gonzalez-Largo was found guilty of participating in an international cocaine trafficking deal that had taken Las Vegas agents of the U.S. Drug Enforcement Administration on a two-year odyssey through Colombia, Guatemala, Nicaragua and Panama.

During the investigation, Gonzalez-Largo allegedly said he used proceeds from the sale of cocaine to buy weapons for the United Self-Defense Forces of Colombia, a violent right-wing paramilitary group tied to the Colombian drug cartels. The U.S. State Department includes the group on its list of terrorist organizations.

“A major part of terrorism throughout the world is funded through the drug trade,” said Mike Flanagan, who runs the local DEA office. “The result here is that a narco-terrorist was taken off the streets. This is a success story of federal, state, local and foreign law enforcement agencies all working together.”

Gonzalez-Largo’s co-defendant, former Las Vegan Rene Oswald Cobar, is expected to learn his fate today from U.S. District Judge James Mahan. Cobar, whom prosecutors did not link to the Colombian terrorist group, had waived his right to a jury trial, opted to let Mahan decide his innocence or guilt.

Courthouse sources described the case as one of those rare “dry conspiracies,” where no drugs were actually seized. The two men were charged with negotiating an 882-pound cocaine deal south of the border with undercover agents.