On Friday, it was announced that the former owner of a Las Vegas strip club had been sentenced to 24 months in prison for evading the payment of more than $1.7 million in employment taxes. Frederick John Rizzolo is the former owner of The Crazy Horse Too. He pleaded guilty to attempt to evade and defeat the payment of employment taxes in June.
Documents filed in the case show that Rizzolo paid the strip club’s floormen, bartenders, bouncers and shift managers in cash. Then, he failed to provide the bookkeepers with accurate records. This resulted in Rizzolo causing false employment tax returns to be filed with the IRS. These tax returns underreported wages paid and the taxes due.
In 2006, Rizzolo admitted to the conduct and pleaded guilty to conspiring to defraud the United States. After the plea, the defendant took steps to conceal his assets and prevent the IRS from collecting the taxes that were owned. In one case, Rizzolo directed $900,000 he earned from the sale of The Crazy Horse Club to an offshore bank account.
In addition to the 24 months in prison, Rizzolo had been ordered to serve six months of supervised release. He will also be required to pay the IRS $2,637,290 in restitution. Additional details can be found here.