Sunday, March 26, 2006 | 7 a.m.
In their heyday as wealthy strip-club operators, Michael Galardi and Rick Rizzolo were cordial competitors, sometimes meeting to discuss business matters beneficial to both men.
But in July 2003 - after FBI agents months earlier had raided topless clubs owned by Galardi and Rizzolo in separate criminal investigations - that relationship turned sour.
As Galardi sought to strike a deal with the government to fend off corruption charges, according to secret FBI reports obtained by the Sun, he supplied agents with derogatory information about Rizzolo,
That information included allegations that Rizzolo, like Galardi, was providing cash under the table to public officials.
Later in August Galardi offered to help agents gather incriminating evidence against his rival topless club operator, who was identified only in the FBI reports as "club owner #1.
"Long-term targets included club owner #1 regarding bribe payments club owner #1 has made to public officials and judges," one report of Galardi's dealings with the FBI said.
At the time, Galardi was providing information to the FBI about an array of public officials Galardi claimed to have bribed. Two of those officials, former Clark County Commissioners Dario Herrera and Mary Kincaid-Chauncey, are standing trial in federal court on charges of taking bribes from Galardi.
Ultimately, Galardi got his deal. He pleaded guilty in Oct. 24, 2003, to a racketeering charge of paying off public officials and got out of the topless club business. He is expected to be one of the government's star witnesses in the corruption trial of Herrera and Kincaid-Chauncey. His claims against the defendants are backed up by nearly two years of court-approved wiretaps conducted by the FBI.
Rizzolo remains a target of a sweeping FBI racketeering investigation that sources have told the Sun is winding down. The investigation has attempted to ferret out hidden mob interests at Rizzolo's topless club, the Crazy Horse Too at 2476 S. Industrial Road.
Federal authorities also have alleged that an atmosphere of "lawlessness" - including allegations club employees brutally beat patrons - was condoned at the Crazy Horse Too.
Rizzolo's lawyer, Tony Sgro, maintained his client's innocence.
Sgro also said there was no truth to Galardi's allegations.
"Mike Galardi went up and down the Strip trying to come up with names to give the government," Sgro said. "So it's not a surprise that he would have included (Rizzolo) in his story.
"There's not going to be any evidence that Rick Rizzolo ever did anything inappropriate with any elected official."
Sgro said the government itself has demonstrated that it has reservations about what Galardi has claimed.
"The government's inaction speaks volumes about its assessment of Galardi's credibility," he said. "It's remarkable. He had all this information about people he accused of wrongdoing, but the government never saw fit to charge anyone else other than those charged in the current corruption case."
Defense lawyers in the corruption case have accused Galardi of being a liar and exaggerating his claims.
Although Rizzolo's name was blacked out in the FBI reports of Galardi's debriefings with agents, the Sun has identified him by matching the descriptions in the reports of club owner #1 with the newspaper's independent research, including information obtained from sources familiar with Galardi's allegations.
FBI agents themselves provided the best insight into Rizzolo's identity when they neglected to black out the name of the Crazy Horse Too in one portion of a report referring to club owner #1.
The reports, heavily censored to avoid compromising ongoing investigations, detail a series of interviews FBI agents conducted with Galardi from July 15 through Oct. 30, 2003. In those interviews Galardi claimed to have provided favors and made cash payments to local elected leaders, judges, prosecutors, police officers and even FBI agents.
Sprinkled throughout the reports are references to similar alleged conduct by Rizzolo.
One elected official Galardi linked to Rizzolo was described in the FBI reports as "Judge #1."
As with Rizzolo, this official has been identified by the Sun as District Judge Nancy Saitta through the descriptions of Judge #1 in the FBI reports matched with independent research and information obtained from sources familiar with Galardi's claims.
Galardi initially referred to Judge #1 as someone who was appointed to Municipal Court. This was the case with Saitta when she was appointed to a vacant seat in Las Vegas Municipal Court in October 1996. Saitta then was elected to District Court in 1998 and was re-elected without opposition in 2002.
Galardi, the reports show, said Rizzolo told him that he had given money to Saitta.
Although he stopped short of calling it a bribe, Galardi suggested that Rizzolo had the judge in his pocket and that she had ruled favorably on his behalf in past cases, a charge Saitta strongly denied in an interview with the Sun on Thursday.
Galardi gave differing accounts to agents about the nature of Rizzolo's dealings with the judge.
In a July 15 interview with agents, one report said: "Galardi advised that a fellow club owner, club owner #1, had paid $40,000 to $50,000 in campaign contributions to Judge #1."
But two weeks later, in a July 30 interview, the FBI reported: "Club owner #1 has told Galardi that he ... provided Judge #1 with $40,000 in cash."
Saitta's campaign reports show that Rizzolo contributed $1,000 to her 1998 campaign and nothing in 2002.
And Saitta denied ever accepting any cash from Rizzolo.
"I'm certain he contributed to my campaign ... but I don't remember anybody offering me cash, and if they did I wouldn't have accepted it," she told the Sun.
Saitta said she never personally accepts campaign contributions, preferring to let her campaign workers deal with the donations.
The only time she recalls meeting Rizzolo, she said, was at one of the annual Christmas parties he used to throw - gatherings usually attended by hundreds of local VIPs and public officials.
Galardi told agents that Judge #1 ultimately wound up presiding over a lawsuit that was filed against "all the strip clubs in Las Vegas," including his, and that she had issued a favorable ruling to the clubs in that case.
That case, court records show, was filed by a group of dancers against the clubs in March 1997. The dancers alleged that the clubs were violating state law by not paying them minimum wages and forcing them to share tips.
In July 2000, records show, Saitta did make a key ruling in that case that benefited the strip clubs. She signed an order to nullify the class action designation of the lawsuit. That had the potential effect of reducing the number of plaintiffs that the clubs might have to reimburse.
The plaintiffs appealed the ruling to the Nevada Supreme Court, which upheld Saitta in December 2001.
Eventually, both Rizzolo and Galardi were able to resolve their differences with the dancers, and the cases against their clubs were dismissed.
In his July 15 interview with FBI agents, Galardi referred to another civil case Rizzolo had before Judge #1.
That case, he said, involved the beating death of a patron at the Crazy Horse Too.
Galardi, according to the FBI, spoke with two men named Vinnie and Michael about the case, "but they said they were not worried because Judge #1 was the judge." The last names of the two men were unknown to the FBI, but it is well known that the Crazy Horse Too had club managers named Vincent Faraci and Michael Muscato.
In the same interview, the FBI reported: "Galardi stated that club owner #1 brags about having judges and prosecutors on the take."
Later, in the July 30 interview with agents, Galardi provided more details about the beating case.
"Galardi had information for the FBI concerning their investigation into the club indicating a while back the bouncers beat a Samoan individual to death and that the family was suing the club," the report of that interview said. Galardi referred to one of the club's bouncers who boasted that "they had an airtight case because of Judge #1."
In January 2003, records show, Saitta presided over a trial in which a jury found that the Crazy Horse Too was not liable for civil damages in the August 1995 beating death of Scott David Fau. The death reportedly occurred during an altercation between Fau and club employees. Muscato was one of the defendants in the case.
Fau, a 39-year-old truck driver, was of Samoan descent, according to the family's Las Vegas lawyer, Randall Pike.
Pike said he had no concerns about the way Saitta handled the case.
The lawyer surmised that he lost the case because his key witness - Edwin Rivera, a longtime Fau friend who was with Fau when the beating occurred - didn't show up to testify on behalf of the family.
"He was always going to be available, but the day before the trial he was nowhere to be found," Pike said.
Pike said he reported the disappearance to the FBI and asked agents to help him find Rivera. But the witness was not located during the trial.
Saitta, meanwhile, said she was surprised to hear her name associated with Rizzolo.
"It just sounds so absurd," she said. "I handled these cases like I handled any other cases. You call them as you see them."
Saitta has not been charged with any wrongdoing, and she said the FBI has not interviewed her about the allegations.
Another public official Galardi linked to Rizzolo in his discussions with agents was former Las Vegas Councilman Michael McDonald, who once was a paid consultant to Galardi.
McDonald's name was not blacked out in the FBI reports.
In September 2003, one report said, Galardi offered to help the FBI investigate McDonald "regarding past corrupt relationships McDonald had with Galardi and club owner #1."
Prior to that interview, Galardi told agents that he considered McDonald a "conniver" because he was taking money from both Galardi and Rizzolo.
"Ultimately, club owner #1 quit paying McDonald, at least for a time, because of McDonald's efforts to collect cash from both club owner #1 and Galardi," the report said.
Galardi quoted McDonald as telling him that he had once received $10,000 in cash from club owner #1.
According to the same report: "In 1995 or 1996, an anonymous complaint was called in to the Las Vegas Metropolitan Police Department (LVMPD) concerning McDonald doing favors for club owner #1. Galardi remembered McDonald telling him that, if asked about any knowledge about his relationship with club owner #1, that he did not know anything."
That passage was then followed by another, containing the only reference to Crazy Horse Too that wasn't deleted.
"Apparently, the complaints received through the anonymous caller indicated that the bouncers of Crazy Horse Too were very heavy-handed and would literally beat up the club patrons," the FBI reported. "Club owner #1 would contact McDonald to utilize McDonald's influence with LVMPD in an effort for the patrons to be arrested versus the bouncers."
Public knowledge of McDonald's ties to Rizzolo date from 1993, while McDonald was still a Metro Police officer.
At the time he was reprimanded by his superiors for sharing confidential police information on another strip-club owner with a county commissioner. Then-Club Paradise owner Sam Cecola, who was accused of having Chicago mob ties, called out Rizzolo for using his political influence to run him out of business.
During his successful 1995 run for City Council, McDonald had to defend himself against accusations that Rizzolo had helped him raise money for his campaign. McDonald called the accusations from then-incumbent Las Vegas Councilman Frank Hawkins a "flat-ass lie."
Later, news reports show, former Sheriff Jerry Keller received an anonymous letter complaining about McDonald in 1998. The letter discussed McDonald's friendship with Rizzolo and accused McDonald of using his position as a bicycle patrol officer to target some of Rizzolo's competitors.
In May 1998, however, a Metro Internal Affairs Bureau investigation into the allegations cleared McDonald of any "improper associations."
But McDonald continued to take heat over his ties to Rizzolo.
The now-defunct Las Vegas Ethics Review Board found him in violation of a city ethics code in 2000 when, as a member of the City Council, he allegedly tried to help Rizzolo by sabotaging a competitor's application for a strip-club permit.
A separate police investigation into that matter did not result in any charges against McDonald.
McDonald did not return phone calls to discuss Galardi's effort with the FBI to link him to Rizzolo.
But McDonald has denied any wrongdoing in the past involving both Galardi and Rizzolo, and he has not been charged in the FBI's ongoing corruption investigation.
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