NEW YORK – The New York Attorney General’s Office announced an indictment against the top executives of a Houston-based company which owns and operates strip clubs.
The 79-count indictment unsealed Tuesday charges five executives of RCI Hospitality Holdings Inc. (RCI), along with three RCI-owned strip clubs in Manhattan, with conspiracy, bribery and criminal tax fraud, among other crimes.
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The indictment alleges the executives bribed an auditor with the New York Department of Taxation and Finance (DTF) to avoid paying over $8 million in sales taxes to New York City and the state from 2010 to 2024.
“RCI’s executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes,” said New York Attorney General Letitia James. “I will always take action to fight corruption and ensure everyone pays their fair share.”
According to the New York Attorney General’s Office, an investigation revealed that RCI and its top executives bribed a former DTF 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. Additionally, on at least 10 occasions since 2010, Timothy Winata, RCI’s controller and accountant, traveled to Manhattan from Texas to provide the auditor with illegal bribes at RCI’s three Manhattan clubs, Rick’s Cabaret, Vivid Cabaret, and Hoops Cabaret and Sports Bar.
Winata was responsible for directly providing the bribes to the auditor and accompanied him on trips to RCI clubs. After one such trip in Feb. 2022, the auditor texted Winata, “This was the best trip I had in Florida. The girls were very beautiful and nice… I hope we can have another trip before the summer.”
The trips and bribes were authorized, directed, and overseen by Eric Langan, RCI’s president and Chief Executive Officer, Bradley Chhay, RCI’s Chief Financial Officer, Ahmed Anakar, RCI’s Director of Operations, and Shaun Kevlin, a Regional Manager for RCI’s New York City strip clubs and later RCI’s Assistant Director of Nightclub Operations.
The defendants also falsified the business records of RCI strip clubs to conceal their crimes and recorded the cash payments used to bribe the auditor as “promotional” expenses for the clubs.
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.
In emails and text messages, the defendants openly discussed using trips to RCI clubs to help secure more favorable treatment from the auditor. For example, in June 2023, Chhay texted Langan and Anakar to boast that one of their clubs, Vivid Cabaret, would pay just $47,000 as the result of an audit.
“Tim [Winata] got the guy to $47k in Vivid New York. But owes him a couple trips,” he wrote. In another instance, Winata explained that RCI “may need to pamper [the auditor] more this time” to obtain a favorable settlement of a sales tax audit.
Langan, RCI’s President and CEO, allegedly personally supervised RCI’s negotiations with the auditor and approved the payment of bribes to him.
For example, on April 12, 2018, while Winata was in Manhattan to meet with the auditor at Rick’s Cabaret and other locations, Langan texted Anakar: “We need to talk about New York and Dance Dollars,” explaining that RCI was “going to be hit by 3M in sales taxes soon.”
Later that same day, Langan texted Anakar: “I think I got the sales taxes in New York to 350 plus interest possibly. Tim [Winata] is discussing with the auditor tonight ;).”
That same day, Langan personally authorized the payment of a bribe to the auditor in New York and the falsification of RCI’s business records to conceal it.
Kevlin texted Langan that “Tim guest would like another $1500” to spend at an RCI-owned strip club in Manhattan and explained that they “did $2k yesterday.”
Kevlin stated that the money would be recorded in the club’s records as a “promo” expense. Langan responded: “That’s fine. Go ahead.” As Kevlin discussed with Langan, he and Anakar later created a false receipt and sales report that listed the $1,500 used to bribe the auditor as an expense for a strip club “promotion.”
Those charged in the indictment are:
- Ahmed “Ed” Anakar, 58, of Plantation, Florida;
- Bradley Chhay, 41, of Conroe, Texas;
- Shaun Kevlin, 45, of Warwick, New York;
- Eric Langan, 57, of Bellaire, Texas; and
- Timothy Winata, 71, of Houston, Texas.
A sixth individual has also been indicted but not yet arrested and will be arraigned at a later date. The indictment will remain sealed as to that defendant until they are arraigned.
The corporations charged are RCI and its three Manhattan-based subsidiaries: Rick’s Cabaret, Vivid Cabaret, and Hoops Cabaret and Sports Bar.
If convicted on the top count of Criminal Tax Fraud in the First Degree, 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 Bribery in the Second Degree that they are charged with, Chhay and Kevlin face a maximum sentence of five to 15 years in prison.
RCI released the following statement:
“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.” 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. 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. 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.”