Tag Archives: Nevada legislation

Las Vegas Adult Entertainment Club Class Action Lawsuit Claims Taxi, Limo Company Extortion, Illegal Kickbacks

A class action lawsuit filed on June 2 alleges a wide-ranging extortion scheme involving Las Vegas’ most prominent adult entertainment clubs and taxi and limousine companies.  The suit, which was filed in federal court in Las Vegas, alleges that taxi and limousine companies extorted more than $40 million in illegal kickbacks from local strip clubs.   

According to the legal complaint, Las Vegas taxi and limousine drivers demanded payments from the clubs of as much as $100 per male passenger.  If the clubs refused to pay, the drivers would simply divert passengers to a different club. The lawsuit claims that the kickback scheme hurts Las Vegas at a time when the city is already suffering economically.   

“Vegas has been one of the top tourist destinations in America for families, but its position is being threatened,” says Jay Edelson, lead attorney for the lawsuit.  “This is precisely the type of activity that keeps families away.” 

As taxi drivers prefer to pick up men who are more likely to go to strip clubs, the suit claims that families and women were snubbed by drivers and found it hard to hail a cab at  night.  The suit also claims that millions of dollars in tax revenue have gone unpaid to the local, state, and federal government. 

The allegations of a wide-ranging extortion scheme have been hotly discussed locally.  An recent expose by George Knapp, a nationally recognized Las Vegas  investigative reporter, found that cabbies routinely lied to  passengers—telling them that certain clubs are undesirable or unsafe (“riddled with bullet holes” was one description) in hopes of diverting them to a “paying” location.  After Nevada state  legislators attempted to put an end to this practice, the cab drivers responded by flexing their muscles.  They shut down the Strip and threatened to crash ground transportation at the airport. 

“The vast majority of taxi and limo drivers are honest and hardworking people, but this minority has a stranglehold on the city,” says Edelson. “It is finally time to put this practice to an end.”   

The suit is being brought on behalf of Theodore Trapp who lives in Southern California, and as a nationwide class. The suit names more than two dozen defendants including, Deja Vu Showgirls, Spearmint Rhino, Cheetah’s, Yellow Cab Co. and Checker Cab Co. It also references Tony Chong, an individual taxi driver who, according to the suit, has publicly admitted his involvement in the extortion scheme. 

To download a copy of the lawsuit filed:  http://www.prnewschannel.com/pdf/Trapp-Big_Poppa.pdf

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Sin City Vices Face Taxing Challenges

Las Vegas entertainment to some is not going out to an expensive dinner or even a movie- it’s simply having a nice slow drag on a cig after a hard day’s work while contemplating life’s woes over a frosty, frothy beer. sintaxes

But you better take your last chugs and drags now, for that all may soon change.   Instead of being considered expenses, these sanity-saving vices may soon become investments. 

If Assemblyman Bernie Anderson, D-Sparks, has his way with bill AB277, it would more than double the taxes placed on alcohol.  The Nevada Assembly Taxation Committee is scheduled to hear proposals that would dramatically raise taxes on alcohol and tobacco. 

Despite Nevada’s out of balance state budget, hospitality industry spokespeople are warning that higher taxes will hurt the already crippled service industry and are fighting the proposal tooth and nail. 

But, for now, these sin taxes are considered the most politically palatable – the low hanging fruit.  

Taxes, if approved, would be raised as follows:

– Hard alcohol, and anything with with higher than 44 proof, or 22 percent alcohol, would go from $3.60 to $7.86 a gallon. 

– Alcohol with proof of between 28 and 44 would go from $1.30 a gallon to $3.43 a gallon. 

– Alcohol with proof of between 0.5 percent and 28 proof – most beer and wine – would go from 70 cents to $1.77 per gallon. 

The bill could raise as much as $100 million a year, according to Anderson. 

The Distilled Spirits Council of the United States sent out a press release warning such a tax increase could seriously affect hospitality jobs. 

“In the depths of one of the worst recessions in history, I can’t think of a less appropriate time for Nevada politicians to punish the hospitality industry – the cornerstone of the economy – with higher alcohol taxes,” said Council Vice President Adam Smith, in the news release. 

Proposed Nevada Assembly bill AB255, sponsored by Assemblywoman Sheila Leslie, D-Reno, would also add another $1 tax to a pack of cigarettes. Currently, the state tax is $0.80. 

How much money the increased tax would raise is unclear because studies have shown that increasing the tax on cigarettes causes sales to go down. One estimate, prepared by Nevada legislative staff, showed it could raise as much as $251 million over two years.

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Las Vegas Leaders Irate Over President Barack Obama’s Remarks

It’s difficult to find anyone in Nevada, politician or otherwise, who is not ticked off – boiling mad- over President Barack Obama’s economic stimulus legislation comments on Monday while he attended a town-hall meeting in Elkhart, Indiana.  Obama said: “You can’t get corporate jets, you can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayers’ dime.”travel

Since then Las Vegas Mayor Oscar Goodman has appeared in front of every camera and microphone he can muster, nerves frazzled and hotter than fish grease about the President Obama’s comments, demanding an immediate retraction and apology.  He followed his demand in a letter. 

In our Nevada economy that has been particularly hard hit by the recession, the enflaming remarks by could prove disastrous, many Nevada leaders say.   The number of Las Vegas tourists fell 4.4 percent last year and the descent continued in December, which saw a 14.2 percent dip compared with 2007. 

Rossi Ralenkotter, president and chief executive officer for the Las Vegas Convention and Visitors Authority, appeared alongside Goodman, saying later he couldn’t put a price tag on repairing damage from Obama’s remarks. 

MGM Mirage spokesman Gordon Absher followed suit, saying Obama’s comments had “wildfire potential.” 

Most business leaders agree that extravagant, ostentatious frivolous spending is one thing, but it’s the “Las Vegas fun factor” under control that can precisely be the economic stimulus ticket to drive up the attendance at Las Vegas conventions and serve as a win-win lift for our sagging national and local economies. 

But are out-of-town business conventioneers really listening? 

Goldman Sachs Group Inc. continued to draw heat and withdrew its plan to hold a three-day conference in Las Vegas after accepting $10 billion in federal bailout funds. 

Similarly, last week Wells Fargo & Co., which received $25 billion in taxpayer money, cancelled a planned employee recognition conference in Las Vegas. 

The fear is that Las Vegas is unjustly getting a growing reputation as a frivolous destination for companies- and not just those getting federal bailout money.  To which Goodman responded, “What we’re famous for has nothing to do with the fact that you can have a serious meeting in Las Vegas.” 

Only time will tell what will be the ultimate economic tourism impact of Obama’s remarks- time Las Vegas has very little of.   It could be that Obama’s comment might tilt the economic pendulum more in favor of Las Vegas tourism, actually bringing in more tourists as Las Vegas continues to work damage control on its reputation as a place for serious business.

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