The parent company of prominent strip clubs, including Rick’s Cabaret, and five of its executives have been indicted on nearly 80 charges for their alleged roles in a 13-year bribery scheme to evade millions in sales taxes. New York Attorney General Letitia James announced the charges on Tuesday, detailing a conspiracy that involved bribing a state tax auditor with complimentary club trips.
The indictment names RCI Hospitality Holdings, its Chief Executive Eric Langan, Chief Financial Officer Bradley Chhay, controller Timothy Winata, and three Manhattan clubs: Rick’s Cabaret, Vivid Cabaret, and Hoops Cabaret and Sports Bar. The charges include criminal tax fraud, bribery, and conspiracy. A sixth individual was also indicted but has not yet been arraigned.
According to the indictment, from September 2010 to January 2024, the defendants bribed a former auditor from the New York State Department of Taxation and Finance to receive favorable treatment in six separate audits. The scheme allegedly allowed RCI to avoid paying over $8 million in state and city sales taxes on “Dance Dollars,” an in-house currency customers purchase for services like private dances.
The auditor, whose name was redacted, is alleged to have received at least 13 complimentary trips to RCI-owned clubs in the Miami area, which included thousands of dollars per day worth of private dances. The indictment includes dozens of emails and text messages that purportedly outline the scheme. In one exchange, CFO Bradley Chhay texted CEO Eric Langan praising controller Timothy Winata for settling an audit, noting that Winata “owes him a couple trips.”
The defendants have denied the allegations. Their lawyer, Daniel Horowitz, stated that RCI, as a publicly traded and audited company, has a policy of paying all legitimate taxes. The news nonetheless triggered a sharp decline in RCI’s stock, which closed down nearly 16% and fell further in after-hours trading.
If convicted, the executives face significant prison time. Eric Langan and Timothy Winata each face a top charge of first-degree criminal tax fraud, which carries a maximum sentence of 25 years. Bradley Chhay’s top charge of second-degree bribery carries a maximum 15-year sentence.
