New York Attorney General Letitia James announced that RCI Hospitality (NASDAQ: RICK), the three Manhattan clubs it owns, and five executives including CEO Eric Langan have been charged in a 79-count indictment alleging a years-long bribery-and-tax-fraud scheme that allegedly avoided over $8 million in taxes.
Langan is being sued alongside CFO Bradley Chhay, Director of Operations Ahmed “Ed” Anakar, Assistant Director of Nightclub Operations Shaun Kevlin, and Timothy Winata, controller and accountant, plus corporate defendants RCI Hospitality Holdings and three NYC subsidiaries: Peregrine Enterprises (dba “Rick’s Cabaret”), RCI Dining Services (dba “Vivid Cabaret”), and RCI 33rd Street Ventures (dba “Hoops Cabaret and Sports Bar”). A sixth individual is indicted under seal pending arrest.
Prosecutors say RCI clubs sold an in-house currency called “Dance Dollars,” added a 20–25% service charge, and, as admissions to a “place of amusement,” were subject to 8.875% combined city and state sales tax but RCI willfully failed to collect and remit that tax while seeking favorable treatment in audits.
“RCI’s executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes,” James said.
The indictment describes at least 13 multi-day trips for a New York tax auditor to RCI clubs in Florida, with comps that included hotels, restaurant meals, and up to several thousand dollars per day in private dances, and at least 10 occasions of comps in Manhattan. The filing says RCI executives recorded bribe cash and Dance Dollars as “promo,” “promotion,” or “miscellaneous” expenses.
Overt-act entries show specific settlements and periods, including: $838,888.82 in settlements related to Vivid Cabaret, $200,773.91 in settlements for Hoops Cabaret, and $47,342.92 in settlements for Vivid Cabaret. Overt acts also quantify uncollected tax for sample periods tied to the alleged scheme, including $1,360,656.78 (2017), $190,259.22 (2021), and $79,918.60 (March to May 2024).
The 79 counts span criminal tax fraud, bribery in the second degree, conspiracy in the fourth degree, and offering a false instrument for filing in the first degree.
RCI Hospitality shares dropped over 23% following the news.
The case proceeds in New York County Supreme Court. If convicted on top counts, sentencing exposure cited includes 8⅓–25 years for Langan, Winata, and Anakar, and 5–15 years for Chhay and Kevlin.
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