New York AG Charges Strip Club Group and Executives in $8 Million Tax-Bribery Scheme
State indictment alleges RCI bribed a state auditor with trips, cash and private dances to reduce sales tax liabilities over 14 years
New York Attorney General Letitia James on Tuesday unsealed a 79-count criminal indictment accusing a major Manhattan strip club operator, RCI, and five of its executives of bribing a state auditor to evade more than $8 million in New York City sales taxes over roughly the past 14 years.
Prosecutors allege the scheme, beginning in 2010, involved a pattern of cash payments, multi-day trips and private dances at RCI-owned venues — including Rick's Cabaret, Vivid Cabaret and Hoops Cabaret and Sports Bar — in exchange for favorable treatment during six separate state audits. The indictment says the concessions secured by the company and its executives reduced the club group's tax liabilities by more than $8 million.
According to court papers, RCI's executives and employees coordinated payments and hospitality for the state auditor through text messages and arranged at least 13 complimentary multi-day trips to Miami that included hotel stays, meals and “up to several thousand dollars’ worth of private dances per day” at RCI venues. An RCI accountant is accused of traveling from Texas to New York at least 10 times to provide the auditor with entertainment at the company’s clubs.
Prosecutors quoted text messages they say show executives negotiating how much cash to provide the auditor and how much of a tax reduction to demand in return. The indictment attributes a 2018 message from RCI president Eric Langan to CFO Ahmed Anakar that read, “We need to talk about New York and dance dollars. We are going to be hit by 3m in sales taxes soon.” Another cited text from 2018 quoted the unnamed auditor as writing to an RCI accountant, “That’s the way people do business in this country… keep the good work and we will Clebbrate [sic] in Florida early next year.” A 2023 message in the filing states, “Tim got the guy to $47k in vivid New York. But owes him a couple trips.”
The state worker who allegedly accepted the bribes has not been publicly identified. The indictment charges RCI and five executives with engaging in a scheme to provide cash and hospitality in return for reduced audit assessments, according to the Attorney General’s Office.
Attorney General James said in a statement that company executives had “shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes” and vowed to take action to fight corruption and ensure all entities pay their fair share. The office did not immediately provide further details on the timing of the audits or the exact statutory counts in the indictment.
RCI, which operates multiple adult-entertainment venues in Manhattan and elsewhere, faces criminal exposure if convictions follow. The indictment says the favorable audit settlements agreed by the state auditor were significantly less than the amounts actually owed, producing the more than $8 million in avoided taxes.
An attorney for RCI, Daniel J. Horwitz, said the company and the indicted executives “deny the allegations and will take all actions to defend themselves against the overreaching charges while continuing to seek a just resolution.” The office of the Attorney General did not immediately respond to requests for comment beyond the unsealing announcement.
The indictment adds to a string of recent enforcement actions by New York prosecutors targeting alleged financial misconduct and corruption. It also highlights how prosecutors used contemporaneous communications and travel records in building a case that links entertainment and hospitality to official acts in a regulatory context.
The criminal case is pending in state court. Prosecutors will next move through pretrial procedures, and defendants will have the opportunity to respond to the charges in court. The indictment does not resolve the allegations, and defendants are presumed innocent until proven guilty.