Strip club executives indicted for bribing auditor to avoid millions in taxes

In a significant legal case, several executives from RCI Hospitality Holdings, a company known for owning numerous strip clubs across the United States, have faced serious charges linked to widespread bribery activities. Coordinates with the company’s headquarters in Houston, Texas, the alleged actions took place between 2010 and 2024 in New York City and the state of New York. The company is accused of engaging in a corrupt scheme that involved providing perks such as complimentary trips, private dances, and substantial cash payments to a state tax auditor. This bribery was purportedly aimed at avoiding over $8 million in unpaid sales taxes on transactions involving 'dance dollars,' which customers purchase for private dances at the clubs. Prosecutors allege that these illicit benefits garnered RCI favorable treatment during at least six tax audits conducted over a ten-year period. The unsealing of a 79-count grand jury indictment details the charges of conspiracy, bribery, and tax fraud against RCI, along with five specific executives, including CEO Eric Langan, controller Timothy Winata, and others. According to New York Attorney General Letitia James, the company shamelessly exploited its strip clubs as a mechanism to sidestep millions in tax obligations. This indictment isn't inherently a definitive statement of guilt; however, it highlights the serious nature of the accusations leveled against the defendants. Amidst the allegations, Daniel Horwitz, a lawyer representing RCI, has publicly contested the claims, asserting that the group will fight the charges in court, and emphasizing that the indictment solely consists of allegations. He also notably remarked that RCI maintains a policy of paying all legitimate taxes, suggesting that the claims against the company lack a substantive foundation. He confirmed that all implicated Manhattan clubs, including Rick's Cabaret and Vivid Cabaret, remain operational, challenging the notion that the indictment has negatively impacted their business. Details from the indictment reveal the extensive nature of the bribery involved, including at least 13 documented trips to Florida that the auditor received, along with exclusive experiences at RCI-run clubs in Miami and New York, indicating a well-structured and deliberate effort by executives to ensure a favorable audit outcome. Among the tips provided to the auditor were generous daily allowances for private dances, showings of extravagant hospitality, and numerous enticing offerings designed to curry favor and minimize tax liabilities. Through these meticulously arranged exchanges, it is alleged that RCI's leaders managed to significantly reduce their tax settlements, avoiding millions more than was legally required and staving off multiple potential audits. As the legal process unfolds, the outcome of this indictment remains uncertain. Although the executives involved portray optimism about their resolve in a courtroom setting, the ramifications of potential convictions could be severe. RCI's industry practices, particularly those pertaining to tax liabilities and corporate ethics, may face scrutiny, leading to broader implications within the adult entertainment sector and beyond, as there are moral and financial stakes at play that could influence public opinion and legal scrutiny moving forward.