A Web of Bribes: How Strip Club Executives Allegedly Gamed the Tax System
In a case reminiscent of a Hollywood crime thriller, top executives at RCI Hospitality Holdings Inc., a Texas-based company that operates popular strip clubs including Rick’s Cabaret and Vivid Cabaret, have been indicted on 79 counts of criminal misconduct. New York Attorney General Letitia James alleges these executives orchestrated an elaborate bribery scheme spanning over a decade, plying a state tax auditor with luxury perks to slash millions from their tax bills. The indictment paints a picture of corporate corruption where club visits, Florida getaways, and thousands of dollars in private dances allegedly served as currency to purchase favorable tax treatment, allowing the company to evade more than $8 million in sales taxes between 2010 and 2024.
The charges target the highest levels of RCI’s corporate structure, including CEO Eric Langan, CFO Bradley Chhay, Controller Timothy Winata, and operations directors Ahmed “Ed” Anakar and Shaun Kevlin. According to prosecutors, the elaborate scheme involved at least 13 all-expenses-paid trips to Florida for a New York tax auditor, complete with hotel accommodations, meals at upscale restaurants, and daily allowances of up to $5,000 for private dances at company-owned establishments. These extravagant expenses were allegedly disguised as legitimate “promotional” costs in the company’s financial records, creating a paper trail that prosecutors are now using to build their case. If convicted on the most serious charges, several executives could face up to 25 years in prison, while others could serve up to 15 years.
Attorney General James has characterized the case as a flagrant abuse of power by a publicly traded company, stating, “RCI’s executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes.” The indictment reflects her office’s commitment to combating corruption and ensuring equitable tax compliance across all business sectors. The charges filed in New York County Supreme Court include criminal tax fraud, bribery, conspiracy, and filing false business records – serious allegations that could potentially dismantle the upper echelon of RCI’s management structure and significantly impact the company’s operations and reputation in the adult entertainment industry.
However, the case may not be as straightforward as the headline-grabbing allegations suggest. Federal defense attorney Ronald Chapman II has raised questions about the prosecution’s ability to prove criminal intent, suggesting the charges might falter when tested in court. “When you look a little deeper, things start to look a little bit different,” Chapman told Fox News Digital, comparing the situation to former President Trump’s financial fraud case where “prosecutors in New York built a sweeping narrative around business judgments that may not actually violate the law.” Chapman’s skepticism centers on whether prosecutors can establish a clear quid pro quo – demonstrating that the auditor’s decisions were directly influenced by the alleged perks rather than representing legitimate business judgments.
The timing of the indictment has also raised eyebrows, particularly given Attorney General James’s own legal troubles. James is currently facing federal bank fraud charges related to a home purchase in Virginia, where she allegedly misrepresented a property as a secondary residence when prosecutors claim she intended it as a rental investment. Chapman suggested the strip club case might represent an attempt to divert attention or bolster James’s public image ahead of potential re-election concerns, noting, “Oftentimes we will see prosecutors right around the time they’re about to be facing re-election, trying to bring big cases like this with sensational headlines where they don’t really have the goods to fully handle the prosecution.”
As this case moves forward, it will test the boundaries between business entertainment practices and criminal bribery, potentially setting important precedents for how companies interact with regulatory officials. For RCI Hospitality Holdings, a publicly traded company with numerous venues across the country, the stakes couldn’t be higher. The indictment not only threatens the freedom of its executives but could fundamentally reshape its business practices and financial standing. Meanwhile, the adult entertainment industry – long operating in a complex regulatory environment – will be watching closely as prosecutors attempt to prove that what happened behind closed doors at these establishments crossed the line from business promotion into criminal conspiracy.
