Strip-club owner was unaware of illegal activity, lawsuit says
A King County Superior Court jury began hearing testimony Tuesday in a lawsuit pitting an aging strip-club magnate against his former business partners over damages he claims to have suffered when the federal government shut down the Colacurcio family’s adult-entertainment empire.
Seattle Times staff reporter
Amid talk of lap dances and wiretaps, a King County jury began hearing testimony Tuesday in a lawsuit pitting an aging strip-club owner against his former business partners over the damage he alleges was caused by the federal government’s shutdown of the Colacurcio family’s adult-entertainment operation.
Philip D. McKibben filed his lawsuit in July 2010, about four weeks after his longtime friend and mentor, Frank Colacurcio Sr., died at the age of 93 and two months before Colacurcio’s son, Frank Jr., was sent off to serve a year in prison on a racketeering-conspiracy charge.
McKibben, 74, is suing Colacurcio Jr. along with three other close associates: Colacurcio Sr.’s nephew, Leroy Richard Christiansen, 71; as well as David Carl Ebert, 66; and Steven Michael Fueston, also 66, who both worked as bartenders for Colacurcio Sr. before he brought them aboard as partners, the jury heard.
McKibben is arguing that his partners’ illegal conduct destroyed the Everett-area club he once owned and harmed him financially. He is also arguing his partners misused company funds, didn’t reimburse him for legal expenses and deprived him of future profits.
The two Colacurcios, Christiansen, Ebert, Fueston and another club manager were all federally indicted on prostitution- and racketeering-related charges in 2009 after a four-year investigation by police and federal agents. The charges alleged the men allowed rampant prostitution and money-laundering at their strip clubs.
The men later entered a plea agreement with the government, but only Colacurcio Jr., 52, served prison time.
As a result of the plea agreement, the government seized four strip clubs and other property worth more than $7.5 million. McKibben, who was not indicted and objected to the plea agreement in a vote among the partners, was involved in only one of the clubs, Honey’s near Everett.
In opening statements in Superior Court, McKibben was cast by his attorneys as an innocent businessman who had no idea illegal sexual activity was going on between dancers and customers inside Honey’s, which has since been torn down.
McKibben rarely visited Honey’s and never went inside Talents West, the Seattle business office that served as the hub for the Colacurcio clubs, said Jacob Lewis, one of his attorneys.
“Even in the late ’80s and early ’90s, Mr. McKibben spent very little time at Honey’s,” said Lewis, noting that McKibben wasn’t swept up in the federal charges filed against the others.
After a business restructuring in 2000, McKibben’s responsibilities further decreased: “Mr. McKibben always considered himself a silent partner but now he was out of the loop,” Lewis said.
He told the jury McKibben’s “first sign that something was wrong” came as he read his morning newspaper at his retirement home in California in 2008 and learned search warrants had been executed at Talents West and the four strip clubs — Honey’s; Sugar’s in Shoreline; Fox’s in Tacoma; and Rick’s, the Colacurcios’ flagship club in Seattle’s Lake City neighborhood.
It is unclear how much money McKibben is seeking, but it appears to be in the millions, according to the trial brief filed by his attorneys. The brief includes an estimate of more than $12 million in lost profits over a 10-year period.
Malaika Eaton — one of the attorneys representing Christiansen, Ebert and Fueston — said McKibben was smart and shrewd enough to avoid police raids at Honey’s and wiretaps at the Talents West office, which led to the federal indictments.
McKibben owned a variety of strip clubs for decades before partnering with Colacurcio Sr. and the others, she said.
Eaton said jurors would hear testimony that McKibben refused to go inside the Talents West office but would wait in the parking lot — a practice he began after the elder Colacurcio was arrested in the early 1980s.
She said the other men — all longtime friends who went on vacations together and had Thursday-night dinners with McKibben — shielded McKibben from the authorities.
“Yeah, he wasn’t indicted. His partners protected him. They didn’t turn him over to the government. He kept his head down,” Eaton said.
Not only is McKibben lucky he avoided being indicted, McKibben was also lucky “to keep years of income from illegal profits,” his share of which was at least $500,000 a year, she said.
Eaton pointed out McKibben owned 25 percent of the company that operated Honey’s, while the other partners each owned 18 percent.
“If this club operated in compliance with the law, it wouldn’t have made money,” she said, referring to lap dances and other sexual conduct inside the club.
McKibben led a failed initiative to overturn a Snohomish County rule, known as the “four-foot rule,” to keep dancers physically separated from customers, Eaton said. And it was McKibben’s idea to install so-called “VIP booths” at Honey’s so dancers and customers would have more privacy.
“He understood that with increased privacy, there would be increased sexual contact between customers and dancers,” Eaton said. “He was glad to accept the increased money from what dancers were doing with customers in those booths.”
Steve Fogg, the attorney representing Colacurcio Jr., said his client was born into a family business and has known all the other parties involved in the lawsuit since he was a kid.
With condom machines in the bathrooms, ATMs lining the walls and “women on top of men in these booths,” Fogg said, “none of the parties in this room was unaware” of what was going on inside Honey’s or any of the other strip clubs.
While McKibben was savvy enough to avoid being indicted with his partners, “you can’t turn savviness into false blindness,” Fogg said.
Seattle Times news researcher Miyoko Wolf contributed to this report, which also includes information from Times archives.
Sara Jean Green: 206-515-5654 or email@example.com