Lawyers argue over whether Desai waived right to silence

By Jeff German

Tuesday, June 3, 2008 | 2 a.m.

The effort to pry crucial information out of Dr. Dipak Desai for the massive lawsuit over the hepatitis outbreak takes center stage this afternoon in District Court.

Desai and other physicians associated with the Endoscopy Center of Southern Nevada have threatened to assert their Fifth Amendment rights against self-incrimination if forced to submit to early fact-finding depositions in the case. Desai and the others don’t want to risk making statements under oath that could help authorities pursuing criminal investigations against them.

Last month, Will Kemp, one of the lawyers for plaintiffs, filed court papers suggesting Desai waived his Fifth Amendment privilege when he submitted a three-sentence affidavit May 19 in the case. In the affidavit, Desai acknowledged he is the managing member of the Endoscopy Center and part of a committee that hired Quality Care Consultants, a politically connected medical inspection company, to conduct an audit of the clinic.

Getting a copy of the audit is important to the plaintiffs’ efforts to establish a direct link between the Endoscopy Center and the hepatitis outbreak.

So far, Desai and company have stonewalled those efforts.

“We’ve had to fight for every bit of information,” complained Ed Bernstein, another attorney for plaintiffs.

Desai’s lawyers contend the doctor did not waive his Fifth Amendment right in the affidavit.

District Judge Allan Earl is to have the last word.

• • •

In the federal government’s sale of the Crazy Horse Too, expecting the unexpected has become the norm.

Worried that yet another deal to buy the strip club might fall through, an attorney for Rick Rizzolo, its former owner, has asked U.S. District Judge Philip Pro to order federal marshals to obtain a temporary liquor license from the city.

Mark Hafer wants the marshals to reopen the club briefly before it loses its liquor license permanently under a city-imposed June 30 deadline. If the club can’t sell alcohol, the prospects of selling the Crazy Horse Too for a price big enough to cover Rizzolo’s $28 million in debts associated with the property will dim considerably.

There is precedent for the government to get involved in the sex business. It ran the Mustang Ranch brothel in the early 1990s after the IRS seized it.

The marshals, who took control of the Crazy Horse Too under an order from Pro eight months ago, have no interest in running the topless club, however. And Pro doesn’t seem to be in a mood to force them to get a license.

The marshals are still pushing a $32 million sale agreement with LCC Cafe Nevada, a company put together by South Carolina businessmen David Dupont and Mahesh Patel.

LCC Cafe Nevada has had trouble getting all of its financing, which is making everyone tied to the deal nervous as the city’s deadline approaches.

Commercial real estate executive Geoffrey West, who has been marketing the Crazy Horse Too for the Marshals Service, says he expects the deal will come together by Wednesday when the City Council takes up LCC Cafe Nevada’s temporary liquor license.

West, however, hasn’t had much luck with predictions in this deal.

• • •

Sheldon Adelson last week left little doubt about his resolve to kick New York restaurateurs Marc Packer and Richard Wolf out of the Palazzo.

The billionaire casino owner turned a few heads when he showed up in District Court for a hearing asking Judge Mark Denton to reconsider a preliminary injunction that allowed Packer and Wolf to resume construction of their upscale restaurant and nightclub in the main lobby of the Palazzo.

The hearing took place just three days after a jury in another case ordered Adelson to pay a $43.8 million judgment to a Hong Kong businessman who helped him land a lucrative gaming license in Macau.

Adelson also recently submitted a five-page affidavit in the Palazzo case in which he again accused Packer and Wolf of moving too slowly to open the nightspot.

The unoccupied space in the heart of the Palazzo, Adelson alleged, has been bad for business and the new resort’s image.

Denton has promised a ruling soon.

Jeff German is the Sun’s senior investigative reporter.