Crazy Horse Owner Rizzolo Admits Tax Evasion Scheme

LAS VEGAS, NV – Frederick John Rizzolo, 58, the former owner of the notorious Las Vegas strip club The Crazy Horse Too, has confessed to a brazen scheme to evade more than $1.7 million in employment taxes, the Department of Justice announced today. Rizzolo’s guilty plea brings a close to a long-running investigation into his financial dealings and attempts to stiff the government.

According to court documents, Rizzolo deliberately underreported wages paid to Crazy Horse Too employees – including floormen, bouncers, bartenders, and shift managers – by paying them in cash and failing to accurately report those payments to the club’s bookkeepers from 2000 through 2002. This resulted in false employment tax returns being filed with the IRS, significantly reducing the amount of taxes owed. This isn’t Rizzolo’s first brush with the law; he previously pleaded guilty in 2006 to conspiring to defraud the United States for similar conduct.

But the initial guilty plea wasn’t enough to deter Rizzolo. Following his 2006 conviction, he actively worked to hide his assets and income, attempting to shield himself from paying the taxes he already owed. The feds say he funneled $900,000 from the sale of The Crazy Horse Too into an offshore bank account in the Cook Islands – a classic move for those trying to disappear their money. He also allegedly orchestrated a complex scheme involving a $50,000 withdrawal and a third party to avoid an IRS levy.

The lies didn’t stop there. Rizzolo brazenly told an IRS collections attorney that he had no income, no assets, and no ability to pay the delinquent taxes. This was, predictably, a falsehood. Investigators with IRS-Criminal Investigation pieced together the tangled web of transactions, exposing Rizzolo’s attempts to defraud the IRS a second time. The investigation reveals a pattern of calculated deception and a blatant disregard for the law.

Rizzolo is scheduled to be sentenced on September 15, 2017. Under the terms of a plea agreement, he faces 24 months in prison and is ordered to pay $2,637,290 in restitution to the IRS. While a prison sentence offers some measure of justice, it remains to be seen if the IRS can fully recover the funds Rizzolo attempted to hide. The case serves as a stark reminder that tax evasion, no matter how elaborate, will be pursued.

Acting Deputy Assistant Attorney General Stuart M. Goldberg and Acting U.S. Attorney Steven W. Myhre praised the work of the IRS-Criminal Investigation special agents and the prosecuting attorneys, Assistant U.S. Attorney Phillip N. Smith Jr. and Trial Attorney Rebecca J. Sable of the Tax Division. This case underscores the federal government’s commitment to cracking down on financial crimes and holding those who attempt to cheat the system accountable.