Hudson Valley Strip Club Exec Among Those Accused In 'Dance Bucks' Tax Fraud Scheme: NY AG

NEW YORK — A 45-year-old Warwick man is among those who have been indicted in a massive tax fraud and bribery scheme, according to the state's top prosecutor.

New York Attorney General Letitia James this week announced the indictments of top executives of RCI Hospitality Holdings, Inc., a company that owns and operates strip clubs across the country, for their roles in the multimillion dollar criminal tax fraud and bribery scheme.

A probe by the Office of the Attorney General (OAG) found that RCI executives bribed an auditor with the New York Department of Taxation and Finance to avoid paying over $8 million in sales taxes to New York and New York City from 2010 to 2024, according to the AG.

Shaun Kevlin, 45, of Warwick, was a Regional Manager for RCI's New York strip clubs and was later RCI's Assistant Director of Nightclub Operations.

A 79-count indictment unsealed this week charges RCI, five of its executives, and three RCI-owned strip clubs in New York with conspiracy, bribery, and criminal tax fraud, among other crimes.

"RCI's executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes," James said. "I will always take action to fight corruption and ensure everyone pays their fair share."

The OAG's investigation concluded that RCI and its top executives bribed a former tax auditor and supervisor, in exchange for favorable treatment during at least six different sales tax audits spanning over a decade.

The auditor received at least 13 complimentary multi-day trips to Florida where he was given up to $5,000 per day for private dances at RCI-owned strip clubs, including Tootsie's Cabaret in Miami. RCI executives paid for the auditor's hotels and restaurant visits during these trips as well, investigators said.

"Tax Department Internal Affairs investigators worked closely with the Attorney General's Office throughout the investigation of this case,” NYS Department of Taxation and Finance Commissioner Amanda Hiller said. "We commend the Attorney General and her staff for their work and look forward to its resolution in court.”

The executives are accused of falsifying the business records of RCI strip clubs to conceal their crimes and recording the cash payments used to bribe the auditor as "promotional" expenses for the clubs, according to the charges.

RCI clubs use an in-house currency called "Dance Dollars" that customers purchase and redeem for private dances. As part of its tax fraud scheme, RCI failed to collect and pay over $8 million in sales taxes on the sale of Dance Dollars. In exchange for the illegal bribes provided to him, the auditor agreed to settle pending and future DTF sales tax audits of RCI's Manhattan strip clubs for substantially less in back taxes, penalties, and interest than were owed, saving RCI millions of dollars, investigators found.

RCI Hospitality Holdings issued a statement from Daniel J. Horwitz of the law firm Tannenbaum Helpern, counsel for the company.

"RCI, two executives, three employees, and three clubs were indicted today in New York on state charges alleging non payment of sales taxes and bribery of a state sales tax auditor. There are no allegations that any company executive or employee personally benefited from the alleged charges," Horwitz said. "RCI, the individuals involved, and the three clubs deny the allegations and will take all necessary action to defend themselves against these overreaching charges, while continuing to seek a just resolution."

The company called the accusations brought by the AG, "baseless."

“We are clearly disappointed with the New York Attorney General’s decision to move forward with an indictment and look forward to addressing the allegations. We remind everybody that these indictments contain only allegations, which we believe are baseless. RCI and the individuals involved are presumed innocent and should be allowed to have their day in court.”

“RCI previously disclosed the New York Attorney General’s investigation in its SEC filings," Horwitzadded. "As a publicly traded and audited company, RCI has a policy of paying all legitimate and non-contested taxes. All three New York City clubs remain open for business."

In addition to Kevlin, the AG said those indicted include Ahmed "Ed" Anakar, 58, of Plantation, Florida; Bradley Chhay, 41, of Conroe, Texas; Eric Langan, 57, of Bellaire, Texas and Timothy Winata, 71, of Houston, Texas.

A sixth person has also been indicted, but not yet arrested.

If convicted on the top count of first-degree criminal tax fraud, Langan, Winata, and Anakar face a maximum sentence of eight and one third to 25 years in prison. If convicted on the top count of second-degree bribery that they are charged with, Chhay and Kevlin face a maximum sentence of five to 15 years in prison.

This article was updated to include a statement from RCI Hospitality Holdings.