Former Pure nightclub host pleads guilty to tax crimes

By Amanda Finnegan

Thursday, March 24, 2011 | 12:08 p.m.

A second former host who worked at Caesars Palace’s Pure nightclub has pleaded guilty to tax crimes stemming from a 2008 IRS raid at the nightclub for its tipping and cash handling policies.

Ali “Shawn” Olyaie, who worked as a VIP host at Pure, pleaded guilty before U.S. District Court Judge Kent Dawson to one count of filing a false federal individual income tax return for the 2006 tax year, the Department of Justice and IRS announced today.

Olyaie worked as a host at the club in 2005 and 2006 and received cash payments collected at the door from patrons trying to bypass the line, according to information disclosed in his hearing.

The payments were collected, pooled and generally distributed on a weekly basis to Pure managers, door personnel and VIP hosts, including Olyaie, according to the Department of Justice.

Olyaie concealed the cash payments he received by not reporting the income to the IRS on his individual income tax returns during the years he worked at the Pure, officials said.

Sentencing has been scheduled for June 29.

On Nov. 9, 2010, Richard Chu, another VIP host at the nightclub, pleaded guilty to filing a false individual income tax return for 2006 after he didn't report the tips he received at Pure. Chu is awaiting sentencing.

In February 2008, the IRS sent agents to investigate Pure Management Group and its former managing partner, Steve Davidovici, as part of a criminal investigation into the club's cash-handling policies.

This case is being investigated by the IRS Criminal Investigation unit and is being prosecuted by Christopher J. Maietta and Joseph A. Rillotta.

Pure Management Group has since been folded into Angel Management Group, which acquired the company and its nine venues in September 2010. The company is now the largest nightlife management company in Las Vegas, owning, operating and marketing 20 venues.

"Lest anyone think otherwise, income in the form of cash is taxable and traceable. Betting on hiding your income from the IRS is like betting on red on an all black roulette wheel. It’s a suckers bet," Paul Camacho, special agent in charge of criminal investigations for the IRS in Las Vegas, said in a statement.