Strip Club Corporations and Associates Sentenced for RICO Conspiracy and Prostitution-Related Charges Strip Clubs Closed, Properties Forfeited to Feds

Three associates and co-owners of the Colacurcio strip clubs were sentenced today in U.S. District Court in Seattle for a variety of racketeering and prostitution related charges. LEROY RICHARD CHRISTIANSEN, 68, of Seattle, Washington, was sentenced for conspiracy to commit RICO—Racketeer Influenced and Corrupt Organizations. DAVID CARL EBERT, 62, of Monroe, Washington was sentenced for conspiracy to use interstate facilities in aid of racketeering (prostitution) and STEVEN MICHAEL FUESTON, 62, of Tacoma, Washington, was sentenced for a misdemeanor, conspiracy to permit prostitution near a military establishment. In their plea agreements signed in April 2010, the defendants admit they were all part of a scheme to promote prostitution at the strip clubs they operated in the greater Seattle area. The men, and the corporations they formed, are forfeiting to the government their interest in more than $7.5 million in property. The strip clubs were closed in May 2010.

At the sentencing hearing, U.S. District Judge Richard A. Jones told the men his review of the evidence in the case showed they had earned significant income based on “deception, toleration and greed.” The Judge said the men had “condoned, supported, encouraged and tolerated” prostitution at the clubs to enrich themselves. Judge Jones said the way they ran the clubs meant women who were trying to legitimately earn an income as dancers were pressured into prostitution by the clubs financial demands and by the rampant prostitution around them.

The final defendant in the case, Frank Colacurcio, Jr., 48, of Seattle, Washington, and MM MR RM Corporation will be sentenced September 24, 2010. Under the terms of Colacurcio Jr.’s plea agreement, he will be sentenced to a year and a day in prison.

The strip clubs run by this organization, Rick’s in Seattle, Fox’s in Parkland, Pierce County, Honey’s in Everett and Sugar’s in Shoreline, all closed in May. The forfeiture was put in place today, allowing the government to seize the properties. The government will receive payment equal to the appraised value of Honey’s, and the building will be bulldozed. The corporations and the individuals are barred from operating any adult entertainment business in Washington State for the next five years.

The assets of the Colacurcio organization were frozen by the government in June 2008 following a two year investigation. Members of the conspiracy were indicted in June 2009. The 25 page indictment lays out the actions members of the conspiracy took to promote prostitution at the clubs and their failure to stop prostitution when it was reported to them. In various recorded conversations, the Colacurcios and their associates dissuaded dancers and managers from reporting acts of prostitution and repeatedly returned dancers who were arrested for and caught in acts of prostitution back to the clubs. The indictment further details how credit card machines and ATMs were used to facilitate the prostitution and how the proceeds of prostitution were laundered through various bank accounts.

Frank Colacurcio, Sr. died earlier this month. At the time of his death he was under indictment for Conspiracy to Commit RICO, Conspiracy to Use Interstate Facilities in Aid of Racketeering – Prostitution, Conspiracy to Engage in Money Laundering, and twelve counts of Mail Fraud. The mail fraud charges stem from the business mailing false reports to the City of Seattle regarding the number of people who entered the clubs and paid a cover charge. Those numbers were purposefully under-reported to evade the admissions tax and to enable the defendants to retain for themselves hundreds of thousands of dollars of unreported income per year. The charges against Frank Colacurcio were dismissed following his death.

In their sentencing memo, prosecutors note the result of the prosecution is the end of a criminal enterprise. “The court’s sentences in this case will completely dismantle this racketeering enterprise, literally from the bricks and mortar of the clubs (which will be permanently closed or demolished), to the forgoing of future earnings by banning the defendants from operating strip clubs in this state.... These sentences— which truly bring down a corrupt organization—will not only significantly punish the defendants for their years of criminal activity, but will also help to restore the communities damaged by the defendants’ conduct,” Assistant United States Attorney Tessa Gorman wrote in her sentencing memo.

The case was investigated by the FBI, IRS Criminal Investigation (IRS-CI), and Seattle Police Department with assistance from the King County Sheriff’s Department, Everett Police Department, Snohomish County Sheriff’s Office, and the Pierce County Sheriff’s Office.

The case is being prosecuted by Assistant United States Attorneys Todd Greenberg and Tessa Gorman.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.