Las Vegas Sun

March 28, 2024

Galardi pleads guilty, cooperating with feds

SAN DIEGO -- Strip club owner Michael Galardi pleaded guilty Monday to one count of conspiracy to commit wire fraud, and has agreed to testify for prosecutors in connection with an alleged scheme to pay three San Diego councilmen for political favors.

Galardi, who runs Cheetahs and Jaguars topless clubs in Las Vegas and Cheetahs in San Diego, "has expressed a desire to provide substantial assistance to the government in the investigation and prosecution of others," according to a 14-page plea agreement released by federal prosecutors.

Galardi, 41, is expected to help prosecutors tie together the case in which he, former Clark County commissioner and Galardi lobbyist Lance Malone and former San Diego Cheetahs manager John D'Intino allegedly gave money to the three councilmen in exchange for help changing a San Diego law regulating strip clubs.

The men were charged in a 38-count indictment released by a federal grand jury in San Diego last month.

D'Intino has pleaded guilty in a deal with prosecutors that is similar to Galardi's agreement. Malone and the three councilmen have pledged to fight.

Galardi told U.S. District Judge Jeffrey Miller that he, Malone, D'Intino and others conspired to pay money to the San Diego councilmen to "corruptly influence them in the performance of their official duties, specifically, to advance the repeal of the 'no touch' provision."

Galardi wanted to get the council to repeal the provision, which bars dancers from making contact with club patrons, according to prosecutors. A proposal to have the City Council reconsider the law never made it onto the agenda of a council committee.

A "no touch" ordinance similar to San Diego's was considered and passed by the Clark County Commission last year before being repealed.

A parallel political corruption case in Las Vegas remains open, but no indictments have been released.

The investigation became public after Galardi's clubs and office were raided on May 14, the same day that the San Diego councilmen's offices were searched by authorities.

Clark County Commission Chairwoman Mary Kincaid-Chauncey, former commissioners Dario Herrera and Erin Kenny, former Las Vegas City Councilman Michael McDonald and Galardi are all targets or subjects in the Las Vegas investigation, which has been going on for more than two years.

Kenny's attorney Frank Cremen said that he doesn't think Galardi's plea will affect his client, who allegedly has told friends and supporters that she is working with authorities.

"It's supposition at this point, but I'd assume (Galardi) is going to plead guilty here as well," Cremen said.

Attorneys for Kincaid-Chauncey, McDonald and Herrera did not immediately return calls for comment. Reached at work Monday, Herrera said he had no comment on Galardi's guilty plea.

Officials with the Las Vegas office of the FBI and the U.S. Attorney's office had no comment on the development. When the indictments were released in San Diego on Aug. 28, FBI spokesman Todd Palmer said that the indictments in San Diego did not affect the case in Las Vegas.

Galardi's agreement is exclusive to the San Diego case and doesn't offer him what attorneys call "global" immunity from further prosecution outside of San Diego.

Attorney Dominic Gentile, who represents Malone, said it's obvious from reading the plea agreement that federal prosecutors will expect Galardi to provide information in the Las Vegas case.

"It's clear from the face of the document that while it isn't a global resolution in a sense of his punishment or exposure, it is a global resolution in terms of his cooperation," he said. "If you keep your eye on the federal courthouse here, you're going to see some action involving him."

Galardi's attorneys likely will have to strike a similar deal in Las Vegas, he said.

Attorney Stan Hunterton, a former federal prosecutor who does not have a client in this case, speculated that prosecutors might want information from Galardi on aspects of the corruption probe that haven't been made public yet. That, he said, could involve other subjects or targets whose names haven't surfaced.

Hunterton said prosecutors in San Diego risk offending a jury if they use Galardi as a witness at trial.

"Here's someone who could be viewed as more corrupt than the politicians," he said. "At some point, the jury is going to say we won't take (a defendant) down for this guy."

Former FBI agent George Togliatti, who worked in Las Vegas and is now a casino security executive, called the plea agreement "awfully quick for someone who is seemingly a principal subject."

"The agreement, based on charges against him, are pretty fair to Mr. Galardi," Togliatti said.

"What we don't know in this whole scenario is the weight of evidence against all of the principals and how important Mr. Galardi's testimony is in the San Diego," he said. "Is the testimony crucial to the prosecution's success? If so they cut a great deal."

It is premature to assume his plea in San Diego will alter the Las Vegas investigation, Togliatti said.

"Who knows what evidence has been compiled here?" Togliatti said. "As I said from Day One, these are separate, distinct cases. There are some of the same principals, but they have to be handled separately."

What will be interesting, he said, is to see other cases that develop from the testimony that is provided.

"These types of investigations live off the spinoffs," he said. "More people cooperate and more information comes out, and these investigations can go on for a long time."

Galardi is scheduled to be sentenced on Jan. 5 in U.S. District Court in San Diego, but that likely will be pushed back. According to the plea agreement he will be sentenced when he has finished his obligation to the government.

He faces up to five years in prison and a fine of up to $250,000.

Galardi initially pleaded not guilty last week to charges of wire fraud, extortion and racketeering, but changed his plea before Judge Miller.

Galardi remains free under the same conditions of his initial $250,000 bond, including travel restrictions limiting his movement to Southern Nevada and Southern California.

Galardi flew back to Las Vegas on a Southwest flight Monday evening.

D'Intino has also pleaded guilty to one count of conspiracy to commit wire fraud, while Malone pleaded not guilty last week to charges of wire fraud, extortion and racketeering. The councilmen, Michael Zucchet, Ralph Inzunza and Charles Lewis, all pleaded not guilty to wire fraud and other charges.

Lewis' aide, David Cowan, pleaded not guilty to making a false statement to the FBI.

Galardi had no comment Monday when he left the courthouse after the 20-minute hearing, and his San Diego attorney Robert Rose said only that charges of extortion and racketeering against his client had been dropped as a result of the plea agreement.

Galardi's guilty plea to a felony will mean that his business licenses will be reviewed in Clark County, where he runs Jaguars and the Leopard Lounge, and in the city of Las Vegas, where he runs Cheetahs.

Metro Police, the district attorney's office and the county's business licensing department will investigate the matter and could ask Galardi to surrender his liquor license, county officials said.

Galardi's county-issued adult entertainment license would become void without a liquor license. If it were determined that Galardi should lose his liquor license, he would likely be asked to surrender it voluntarily, county spokeswoman Stacey Welling said.

If the license was voluntarily surrendered there would be a better chance that a temporary license could be granted to someone else to run the clubs, Welling said.

Commissioner Yvonne Atkinson Gates said this morning she expected Galardi's licenses to come before the County Commission, which doubles as the liquor licensing board, "within the next 30 to 60 days."

"I think it's pretty clear cut. He pleaded guilty of a crime of moral turpitude," she said. "I think it's in his best interest to resolve the issue sooner rather than later."

An acceptable resolution, she said, would be "selling or transferring business to someone who is suitable."

When asked if a family member could be considered suitable, she said, "Any person would qualify as long as they are able to go through stringent background check that Metro would conduct. They would have to be treated as if they were any other person going in for a liquor license."

City of Las Vegas Business Services Manager Jim DiFiore said that his office would review the plea agreement and indictment and determine how it "impacts (Galardi's) suitability to hold a license."

DiFiore said that Galardi's sexually orientated business license will also be reviewed.

Galardi arrived at the downtown federal courthouse with Rose, a former federal prosecutor, Monday afternoon for his change of plea hearing.

Neatly attired in a black suit and blue tie, Galardi was tailed by a phalanx of San Diego television news cameramen as he entered the courthouse.

As Galardi stood along side Rose during the hearing he repeatedly answered, "yes sir, your honor," or "no sir, your honor," to questions put forth by Miller.

Each of those responses referred to Galardi's understanding of his 14-page plea agreement and the waiving of his rights. Galardi looked glum at times, but kept his composure and answered each of Miller's questions calmly.

At one point he indicated that he was pleading guilty to help someone else. But upon clarification he changed his answer and said he wasn't pleading guilty to help anyone else.

Miller told Galardi that "this court is not bound by any sentencing guidelines made by any attorney to the court."

When Miller asked Rose if he believed Galardi had grounds to defend himself against the wire fraud count, the attorney responded: "I don't believe there is."

Frank Ragen, a San Diego attorney representing Lewis, said his client will not change his not guilty plea as a result of Galardi's decision to plead guilty.

"He was not involved in any bribery or political corruption" Ragen said of Lewis.

As to Galardi's guilty plea: "It's obviously a settlement where he is willing to cooperate in order to secure a good sentence," Ragen said. "I think his lawyer did a good job to get it down to one count, considering his posture."

As for Lewis, Ragen said: "I don't think it will have any impact on Councilman Lewis because Councilman Lewis has never met Mr. Galardi."

In his plea agreement, Galardi alleged that he paid for Lewis' travel, lodging and entertainment in Las Vegas sometime between October 2000 and November 2002.

"When the facts are all known that statement will be determined to be inaccurate," Ragen said.

San Diego cab driver Craig Evers said he had no sympathy for Galardi.

"I don't like guys that rat," Evers said. "He's the major player in the game and then he rats on everyone else.

"That's not cool."

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