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November 27, 2014

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Ex-Pure club co-owner sentenced in IRS concealed tips case

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Sam Morris / File photo

Patrons step up to the bar and fill the dance floor at Pure in Caesars Palace.

A longtime Las Vegas Strip nightclub operator who was at the middle of a federal tip-concealing probe was sentenced Wednesday to three years of probation and eight months of house arrest.

Steve Davidovici, also known as "Stevie D.," a former executive of the Pure Nightclub at Caesars Palace, was sentenced by U.S. District Judge Kent Dawson.

“Judge Dawson made the right decision today by taking into consideration all of the factors in this case, including Steve's health,” Davidovici’s attorney, David Z. Chesnoff said after the sentencing.

Chesnoff was referring to Davidovici’s eye condition of acute optic neuropathy — one of the reasons the judge said he would not give Davidovici prison time.

“He recognized Steve for who he is: A hardworking man whose good deeds far outweigh his mistakes. Steve will make the most of this opportunity to continue to be a productive citizen, to employ hundreds of Las Vegas residents and to give back to our community,” Chesnoff said outside the courtroom.

As part of the sentence, which requires Davidovici to wear an electronic device during his home confinement, the former club kingpin must pay $141,306 to the Internal Revenue Service, the judge said.

Davidovici and chief doorman Mikel Hasen pleaded guilty in March to filing false tax returns. Prosecutors had argued for an 18-month prison term for both.

The judge was tougher on Hasen, sentencing him to spend about a year in prison and pay $99,566 in restitution.

A third man implicated in the federal investigation, Kelly Doll, 31, a former VIP host, pleaded guilty to one count of federal tax evasion last week. His sentencing is set for Nov. 24.

The federal investigation looked into unreported "tip pool" funds that were generally shared weekly among employees at the club from about 2005 through 2008. The IRS sent agents in February 2008 to begin investigating Pure and Davidovici.

The tips came from patrons trying to bypass the line at the door. Tips were collected, pooled and generally distributed on a weekly basis to Pure managers, door personnel and VIP hosts, according to the Justice Department.

Two other former hosts, Ali "Shawn" Olyaie and Richard Chu, have also pleaded guilty. While Olyaie is awaiting sentencing, Chu was sentenced to three months of probation and ordered to pay $42,280 in restitution.

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  1. He should have gone to one of those lawyers who advertise the ability to have you IRS bill reduced to pennies on the dollar. You would think Stevie and his group would be smart enough to do that...

  2. When the IRS has opened a criminal investigation against you, you need more than a 1-800 tax service. And a very good lawyer would help. The IRS isn't going to compromise if it senses tax evasion.

  3. "The federal investigation looked into unreported "tip pool" funds that were generally shared weekly among employees at the club from about 2005 through 2008. The IRS sent agents in February 2008 to begin investigating Pure and Davidovici. The tips came from patrons trying to bypass the line at the door. Tips were collected, pooled and generally distributed on a weekly basis to Pure managers, door personnel and VIP hosts, according to the Justice Department."

    Tips are and never were intended to be taxable, not by the fundamental principles this republic was founded on. Far too many here seem to assume the feds are justified in interfering with a going, profitable business benefiting the locals directly. At least for me a tip is for good services rendered, not as an entitlement. The feds are way too greedy and We the people are far, far too lax giving Congress and their evil minions the benefit of the doubt.

    "this guy organized and coordinated the stealing of tips from workers to keep their jobs..."

    mrlucky -- you get that from where?

    "The struggle for liberty has been a struggle against Government. The essential scheme of our Constitution and Bill of Rights was to take Government off the backs of people." -- Columbia Broadcasting Sys., Inc. v. Democratic Nat'l Comm., 412 U.S. 94, 162 (1973), Justice Douglas concurring

  4. Fools file false tax returns...

  5. "Tips are and never were intended to be taxable.... a tip is for good services rendered, not as an entitlement.... Far too many here seem to assume the feds are justified in interfering with a going, profitable business...."

    Who thinks that tips are for anything other than services rendered? Just like any type of salary, wages, bonuses or other compensation for services rendered. None of which are entitlements, and all of which are clearly taxable.

    Nobody is assuming the feds are justified in interfering with a going, profitable business. Why? Because the feds did no such thing. They interefered with an organized pattern of tax evasion by people who shall from now on be known as convicted felons. That's what the feds are supposed to do.

    You comment is nothing more than gibberish by someone who knows nothing about income taxes other than the fact that you don't like them.

  6. "Who thinks that tips are for anything other than services rendered? Just like any type of salary, wages, bonuses or other compensation for services rendered."

    abostonboy -- such a profoundly ignorant post. Tips are neither a matter of contract nor remuneration, which the others you mentioned are. Government is greedy to the point of being predatory on those who it was Constituted to serve.

    "If we run into such debt, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our calling and our creeds...[we will] have no time to think, no means of calling our miss-managers to account but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers... the bulk of society is reduced to be mere automatons of misery... And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression." -- Thomas Jefferson in a letter to Samuel Kercheval, July 12, 1816

  7. "Who thinks that tips are for anything other than services rendered? Just like any type of salary, wages, bonuses or other compensation for services rendered."

    abostonboy -- I think so, in response to your profoundly ignorant post. Tips are neither a matter of contract nor remuneration, unlike which the other factors you mentioned. Government is greedy to the point of being predatory on those who it was Constituted to serve.

    "If we run into such debt, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our calling and our creeds...[we will] have no time to think, no means of calling our miss-managers to account but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers... the bulk of society is reduced to be mere automatons of misery... And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression." -- Thomas Jefferson in a letter to Samuel Kercheval, July 12, 1816

  8. Perhaps you should do a little homework and read the Internal Revenue Code and the Constitution. "Ignorant" implies a lack of knowledge which, when it comes to income taxes, describes one of us, and it's not me.