Colacurcio Sr., five others indicted on a charge of conspiracy and racketeering
Seattle strip-club magnate Frank Colacurcio Sr., his son, and four other associates have been indicted by a federal grand jury on racketeering and other charges stemming from years-long investigations into allegations of rampant prostitution and money-laundering at their clubs.
Seattle Times staff reporter
Seattle strip-club magnate Frank Colacurcio Sr., his son, and four associates have been indicted by a federal grand jury on racketeering and other charges stemming from years-long investigations into allegations of rampant prostitution and money-laundering at their strip clubs.
Named in the indictment are Colacurcio Sr., son Frank Colacurcio Jr. and associates Leroy R. Christiansen, David C. Ebert, Steven M. Fueston and John Gilbert Conte. Also named are three business enterprises associated with the clubs.
Each of the men are charged with conspiracy to commit racketeering, conspiracy to use interstate facilities in aid of racketeering, conspiracy to engage in money laundering and mail fraud.
The government is also seeking a $25 million judgment against the men and their businesses, as well as to seize the real estate associated with the four clubs.
"With the indictment unsealed today, we take an important step in this racketeering investigation," U.S. Attorney Jeffrey Sullivan said in a news release. "Our trial team has interviewed more than 200 witnesses, reviewed thousands of pages of reports, transcripts of wire taps, and video surveillance of activities at the clubs. We look forward to proving the RICO conspiracy in court."
None of the men were arrested today. They have been ordered to appear for arraignment in U.S. District Court in Seattle on July 24.
Reached at his Lake Forest Park home this afternoon, Colacurcio Sr., 92, called the charges "a lot of malarkey."
Conte, who was with Colacurcio Sr., denied the accusations, saying "I don't understand the stuff."
Frank Colacurcio Jr.'s attorney, John Wolfe of Seattle, said his client learned of the indictment this morning and plans to plead not guilty at his arraignment. "He looks forward to proving his innocence at trial," Wolfe said.
The Colacurcio empire includes strip clubs Rick's, in Seattle; Sugar's, in Shoreline; Honey's, in Everett; and Fox's, in Parkland, Pierce County. It has long been the target of law enforcement.
Last summer, federal agents staged high-profile raids at the clubs and carted off boxes of documents related to their operations.
Also raided last summer were the Colacurcios' business offices in Lake City, called Talents West, and Colacurcio Sr.'s Lake Forest Park home and an apartment in Seattle.
At that time, the government obtained court orders preventing the Colacurcios from selling the property, in anticipation of today's indictments.
The indictment unsealed today offers many of the same allegations that federal agents stated last summer in support of their search warrants — that the clubs were home to overt and well-known prostitution, and the club operators structured their businesses to disguise the true amount of money that was being collected in the operations.
But today's documents also spell out graphic conversations, surreptitiously recorded by federal agents, between the Colacurcios and their associates that could bolster the government's position that the management was entirely permissive and encouraging of prostitution in the clubs.
Agents had used court-authorized bugs to record the conversations at the offices of Talents West beginning as early as March 2008, said Assistant U.S. Attorney Todd Greenberg, who is supervising the case.
According to the indictment, the Colacurcios and their associates enriched themselves by "permitting, facilitating and promoting prostitution" at the clubs. It also says the group laundered prostitution money by accepting credit cards and ATM transactions to pay for the sex acts. It also alleges the group underpaid city taxes by not disclosing the full proceeds of the clubs.
The clubs operate generally by charging dancers "rent" to work at the clubs and charging admission fees for customers.
The indictment alleges that the group overtly supported prostitution by installing "VIP" rooms where customers could be entertained more privately. It also says the installation of condom machines in each club encouraged prostitution.
The taped conversations allege that the Colacurcios and the others were permissive, if not outright encouraging, of prostitution at the clubs. In one conversation included in the indictment unsealed today, made at Talents West in March 2008, two dancers complained to Colacurcio Jr. that there were rampant sex acts at Rick's.
When one of the dancers specifically accused another dancer of offering customers sex acts, Colacurcio Jr. allegedly responded, "My type of girl."
Other conversations indicate that dancers were not disciplined for committing sex acts, but advised simply that such behavior could endanger the management with law enforcement. On one tape in March 2008, Colacurcio Jr. allegedly joked to one dancer that sex was allowed in the Talents West offices but not in the clubs.
Other conversations portray the Colacurcios and other defendants as joking graphically about prostitution allegations and making repeated references to receiving sexual favors from the dancers.
The mail fraud charges are based on allegations that the defendants repeatedly mailed false tax statements to the city misstating the revenue at the clubs.
During a news conference this afternoon, U.S. Attorney Jeffrey Sullivan said that after years of investigation and efforts by law enforcement to shut the Colacurcio enterprises down, prosecutors believe they have a strong case.
"I believe we have very solid evidence," Sullivan said from the steps of the federal courthouse in downtown Seattle. "We feel very confident that when it's done, that Frank Colacurcio Sr. and the others will be in fact be convicted."
Sullivan characterized the Colacurcio operation as a long-term "quality of life" problem for the cities where the strip clubs are located. In total, the clubs employ several hundred dancers, he said.
He dismissed the notion that prostitution in these cases was a victimless crime. Rather, the women at the clubs were exploited by being forced to turn to prostitution to make enough money to pay club management back for exorbitant "rent" fees that were charged for permission to dance in the clubs.
Many dancers have agreed to cooperate in the case in return for immunity from prosecution, Sullivan said.
"All the girls indicated it was almost impossible" to make the "rent" by dancing alone, Sullivan said.
"These men made millions of dollars exploiting these young women in the Seattle and Tacoma areas."
In fact, Sullivan said, the Colacurcio enterprise may be the largest organized prostitution operation in Western Washington. "I'm not aware of any bigger," he said.
Colacurcio Sr. has long been considered by law enforcement to be one of Seattle's most notorious racketeering figures. As far back as the 1950s, he was identified as a racketeer in testimony before a U.S. Senate committee and accused of using strong-arm tactics to control Seattle's pinball trade.
Colacurcio Sr. has served four federal prison terms, primarily for skimming cash to avoid taxes and violating the terms of his probation. His son has served time for tax fraud.
The three-year investigation that led to last summer's raids was indirectly triggered by a seemingly mundane zoning issue — the Colacurcios' long-running efforts to convince the Seattle City Council to allow them to add seven or eight parking spaces at Rick's.
The so-called "Strippergate" scandal erupted at City Hall in 2003 after it emerged that the Colacurcios secretly funneled thousands of dollars in illegal campaign contributions through friends, relatives and business partners to the re-election campaigns of Seattle City Council members Judy Nicastro, Heidi Wills and Jim Compton.
The contributions came shortly before the council reversed two earlier decisions and approved a rezone allowing Rick's to add the parking spaces, against the recommendations of the city planning department and despite neighborhood opposition.
The scandal over the illegal contributions helped lead to the defeat of Nicastro and Wills in the 2003 election. Compton was re-elected but later left the council. None of the council members was aware of the Colacurcios' scheme, according to prosecutors.
The elder Colacurcio and his son pleaded guilty last year to felony and misdemeanor charges, admitting they reimbursed others to skirt campaign-donation limits. The Colacurcios agreed to each pay $75,000 in criminal and civil penalties.
The Strippergate case revived law-enforcement interest in the Colacurcios, prompting the FBI and the other agencies to form a task force in 2005.
Information from Seattle Times staff reporters Mike Carter, Lewis Kamb and Times archives is included in this report
Copyright © 2009 The Seattle Times Company
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