Skinvestigation claim: Detective gets 130 lap dances, makes no arrests

Prosecutors claim prostitution is back at the Colacurcio-owned clubs in a big way
By LEVI PULKKINEN
Seattle Post Intelligencer
Mar. 06, 2010

As the march toward trial continues, several of the men indicted following a sting targeting Seattle strip club mogul Frank Colacurcio Sr. now say federal authorities have no business policing vice in the city.

The prostitution and racketeering investigation, now in its fourth year, saw indictments filed against Colacurcio -- operator of Rick's strip club in Seattle and three similar establishments around the region -- and five other men associated with his company, Talents West. In indicting the elderly Colacurcio, his son, Frank Colacurcio Jr., and the others, federal prosecutors alleged all conspired to profit from prostitution at the clubs.

Objecting to a new claim by prosecutors that prostitution is back at the clubs, attorneys for one of the accused now says the government's effort has turned the FBI into "a vice squad." An attorney representing another defendant has claimed that investigatory reports show one undercover officer spent at least $16,835 buying more than 130 lap dances without making a single arrest.

Legal battles continue

The new allegations set the stage for another round of legal wrangling in the case, currently before U.S. District Court Judge Richard Jones. Prosecutors have asked Jones to restrict the two defendants still involved in day-to-day club operations -- Steven Michael Fueston and David Carl Ebert -- from doing so.

Restrictions similar to those requested are now imposed on the Colacurcios and others under indictment. Jones previously ruled Fueston and Ebert could continue working in the clubs so long as they did not speak with employees about the criminal case or allow prostitution in the clubs.

Arguing that Fueston and Ebert are in "blatant violation" of the court's order, Assistant U.S. Attorneys Tessa Gorman and Todd Greenberg requested that the men be barred from the clubs in part because of the results of a recent undercover operation at Rick's and Honey's strip club in Everett.

"Several witnesses have provided a relatively consistent account of how, during the few months immediately after the execution of the federal search warrants, the level of prostitution activity at the clubs significantly decreased," the FBI special agent leading the investigation alleged in a Feb. 17 report.

"Over time," the agent added, "these and other witnesses began to consistently report that … prostitution activities had returned to Rick's and Honey's at levels similar to what they were prior to the execution of the federal search warrants."

During eight undercover visits to the clubs in December and January, the agent told the court Seattle police and an FBI agent were propositioned by 10 dancers. Investigators also found that club management was ignoring sex acts clearly visible to the undercover officers.

Similar allegations were made public in June, when federal authorities in Seattle unsealed a grand jury indictment against Colacurcio and his business partners following a massive investigation into the clubs.

In the indictment, federal authorities accused the Colacurcios and their associates of racketeering, using interstate commerce to facilitate prostitution, money laundering and mail fraud. At issue are allegations that the strip clubs -- Rick's in Lake City, Sugar's in Shoreline, Honey's in Everett and Fox's in Parkland -- were used as fronts for prostitution that allegedly garnered the men $25 million in the preceding four years.

The indictment followed a years-long investigation that culminated in June 2008 with raids by Seattle police and federal agents on the clubs and Talents West, a Colacurcio-owned agency that hires dancers for the clubs. Federal prosecutors interviewed more than 200 witnesses, reviewed hours of recorded phone calls, surveillance video and intercepts from listening devices, and went so far as to place an undercover police officer in the club as a waitress.

Key to the prosecutors' case, according to court documents, is the payment scheme in which strippers paid $75 to $130 in daily "rent" to the Colacurcio businesses. Such an arrangement is common in Washington strip clubs, which are not allowed to sell liquor to generate profit.

"The investigation established that prostitution was rampant at each of the four strip clubs," the FBI agent leading the investigation alleged in the Feb. 17 report. "Dancers at the clubs regularly performed sex acts for customers in exchange for payment. Undercover officers posing as customers at the clubs documented scores of prostitution violations."

Defendants deny claims

As they have since pleading not guilty to the charges, the defendants contend they took appropriate steps to prevent prostitution at the clubs and deny facilitating sex there.

Since Ebert took management control of the clubs following raids there in June 2008, there has not one dancer arrested for prostitution, defense attorney Colette Tvedt told the court. Ebert, she claimed, has fired 10 employees for violations of club policies and made changes to discourage prostitution at the clubs.

Writing the court in objection to any new restrictions of her client's activities, Tvedt noted that the recent undercover actions -- like, she asserted, the larger government action -- did not end in any arrests. Had they resulted in some obvious action, she said, her client would have fired the dancers involved.

Tvedt also alleged that one undercover detective visited Talents West clubs more than 160 times during the investigation, paying somewhere between $16,835 and $18,170 to the clubs. The officer, Tvedt claimed, received "over 130 documented VIP dances and an undetermined additional number of undocumented dances."

Those dances, she claimed, did not prompt a single arrest.

"The nature of a strip club is such that offers for sex made by a dancer to a customer -- offers made in private conversation in a noisy, sexually charged environment -- are extremely difficult for event the most alert manager or owner to detect," Tvedt said. "As a result, arrests made by undercover detectives posing as customers serve an important function in notifying club owners about these types of activities."

Attorney Robert G. Chadwell went further, asserting the government has ignored a 47-year-old Court of Appeals ruling cautioning federal authorities to "guard against attempt to convert what are essentially offenses against state law into federal crimes."

"In vigorously expending its tremendous resources on investigating what -- at most -- would amount to misdemeanor acts of vice, the government in this case has blithely ignored the 9th Circuit's longstanding and unequivocal admonishment against the misuse of federal resources for prosecution of a matter of inherently local interest to law enforcement," wrote Chadwell, who represents Fueston in the criminal case.

"The government in this case has transformed the Federal Bureau of Investigation, an agency capable of investigating matters of national significance such as capital federal offenses, espionage, and international terrorism, into a vice squad," the attorney continued in court documents.

"But even the simple goals of a vice squad have not been met here. No arrests were made, no summonses were issued, and no misdemeanor charges were filed arising from the undercover investigation in December and January."

Fox's, the club which Fueston manages, was not targeted in the recent undercover operation, Chadwell added.

Tvedt and Chadwell both argued that their clients had taken all reasonable steps to prevent prostitution at the clubs, including taking steps mandated by the court.

Writing the court, Chadwell noted that municipal law has long recognized that prostitution often follows erotic entertainment.

"Historically, prostitution has occurred in and around adult entertainment establishments, regardless of location or ownership," Chadwell said. "Mr. Fueston and the co-defendants are no more responsible for this fact of life than they are for inventing the world's 'oldest profession.'"

Jones is expected to take up the case Thursday in U.S. District Court. None of the accused is currently in custody.

Of the six men initially charged, Colacurcio driver and confidant John Gilbert Conte alone has pleaded guilty. He was sentenced to probation last month.