Electric Blue’s Dirty Secrets: Owners Indicted in Prostitution & Tax Scheme

HARTFORD, CT – The glitter and grime of the Electric Blue strip club in Tolland, Connecticut, have given way to federal indictments. Kenneth Denning, 67, of Holland, Massachusetts, Joshua Baker, 41, of Willimantic, Connecticut, and William Mayo, 41, of Manchester, Connecticut, are facing a 12-count indictment alleging a sprawling criminal enterprise built on exploitation and deceit, according to a statement released today by U.S. Attorney Vanessa Roberts Avery.

The feds allege Denning, the club’s owner, oversaw a brazen operation where dancers performed nude and lap dances for customers, escalating into outright commercial sex acts in semi-private “lap dance rooms” and “VIP rooms.” Mayo, the bouncer, allegedly handled recruitment, bringing in dancers – many of whom were in the country illegally – to fuel the club’s illicit profits. Baker, as manager and bookkeeper, was allegedly responsible for managing the flow of cash, a system described by investigators as “Kenny’s money.”

That “Kenny’s money” – cash collected from cover charges, dance fees, and direct payments for sexual favors – was allegedly stashed in envelopes, labeled with its source, and locked in a safe in Denning’s office. This cash wasn’t just used for business expenses; it allegedly funded Denning’s lavish lifestyle, including frequent trips to casinos where he reportedly gambled away large sums. The indictment paints a picture of a meticulously concealed operation, designed to maximize profit at any cost.

But the alleged criminal activity didn’t stop at prostitution and immigration violations. The indictment further alleges that Denning and Baker systematically defrauded the IRS, underreporting the club’s gross receipts by as much as approximately $5.7 million between 2020 and 2022, resulting in a tax underpayment exceeding $2 million. They allegedly excluded income derived from the commercial sex acts, attempting to hide the full scope of their earnings from the authorities.

The brazenness continued with the COVID-19 pandemic. Denning allegedly applied for and received an Economic Injury Disaster Loan (EIDL) of approximately $150,000, falsely certifying that the Electric Blue did not feature “live performances of a prurient sexual nature.” This, prosecutors say, was a deliberate attempt to exploit a government program designed to help legitimate businesses struggling during the crisis. Denning then allegedly used the loan proceeds to further fund his illegal activities.

The charges are substantial. Denning, Baker, and Mayo each face a maximum term of imprisonment of five years on the charge of conspiracy to use an interstate facility to promote or facilitate prostitution, and six months for unlawful employment of aliens. Denning and Baker also face five years for conspiracy to file false tax returns and a staggering 20 years for conspiracy to commit promotional and concealment money laundering. Additional charges against Denning include a 10-year sentence for engaging in monetary transactions with proceeds from prostitution (related to a $21,700 deposit at Mohegan Sun), three years for aiding and abetting the filing of a false tax return, and one year for willful failure to file his personal tax return for 2021. The investigation, a joint effort by Homeland Security Investigations, IRS Criminal Investigation, and the Connecticut State Police, promises to expose the full extent of the Electric Blue’s dirty dealings.