U.S. Attorney's Office fights to keep strip club licensed for liquor

Yesterday, a federal prosecutor appeared before U.S. District Judge Philip Pro and asked the federal judge to prevent a Las Vegas city ordinance from rescinding special use permits that allow exotic dancing and liquor at the Crazy Horse Too strip club.

The Review-Journal reports:

[The Asst. U.S. Attorney] argued that the value of the club would plummet from between $32 million and $35 million to between $8 million and $10 million without the special permits. The club opened before current zoning laws were adopted, but was allowed to continue operating.

The strip club has been closed since the federal government took it over last August.

Deputy [Las Vegas] City Attorney Bill Henry . . . said the city would be "outraged" if Pro took the uncommon step of overriding a city ordinance. He explained that the city is "protecting our citizens" by working to get rid of clubs grandfathered in after the new policies were put in place.

Bill Henry explained to Pro that the special use permits are stripped if the owner abandons them or discontinues the use of them. He said the federal government has done just that by failing to reopen the club.

The City Attorney then offered a Vegas-style solution to the federal government's problem:

He said the federal government could gain another year if it opens the club, serves alcohol and provides adult entertainment for an eight-hour period.

But prosecutors argued that the federal government is not in the business of
operating strip clubs.

The U.S. Attorney's office got into this odd legal position after seizing the strip club property as part of the former owner's plea agreement. Former Crazy Horse owner Rick Rizzolo pled guilty to tax evasion charges in 2006 and part of his plea bargain required Rizzolo to pay a patron of the club $10 million from the sale of the club. The patron had become quadriplegic after being beaten by strip club employees after arguing over his drink tab in 2001.

And on a rather touching note, apparently not all U.S. Attorneys are made of stone. Assistant U.S. Attorney Eric Johnson teared up in front of U.S. District Judge Philip Pro as he argued that money from the sale of the club was needed to compensate the quadriplegic victim of the club's employees.