Strip Club Owner Pleads Guilty To Faking Books

1/13/2011 10:34:10 PM

A Detroit-area strip club owner pleaded guilty today to doctoring his club sales with a specialized computer program so that he could cheat on his taxes, the Justice Department and Internal Revenue Service announced.

Nicholas J. Faranso, of Farmington Hills, faces up to five years in prison after pleading guilty before U.S. District Court Judge John Corbett O'Meara in federal court in Detroit.

He pleaded guilty to one count of conspiracy to defraud the United States. He will be sentenced July 14.

According to court documents, Faranso owned two strip clubs: BT's in Dearborn, Mich., and Tycoon's in Detroit. Court documents reveal that in 2001, Faranso bought a computer software program called Journal Sales Remover from Theodore Kramer, a self-employed computer software salesman. The software program was specifically designed to remove a portion of the actual sales from the computerized point of sales systems that both clubs used to produce guests checks, and to track and record sales.

The program would make it appear that Faranso's clubs received less income than they actually did, records show.

According to court documents, from about 2001 to about 2004, at Faranso's request, Kramer made periodic visits to Faranso's clubs to run the sales remover program to delete a substantial amount of the actual sales from the club's computer. Faranso then provided the reduced sales figures to his accountant, records show.

As a result, Faranso falsified the clubs' tax returns by understating their gross receipts by more than $500,000.

Kramer pleaded guilty to one count of conspiracy in November.

Read more: Strip club owner pleads guilty to faking books | freep.com | Detroit Free Press http://www.freep.com/article/20110113/NE…

10 comments

Latest

vincemichaels

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14 years ago

Good ole Nick, I always knew he smelled funny.

samsung1

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14 years ago

Yeah something seemed strange about his business model of $20 for cover that includes 2 free drinks. He probably made it so those 2 drinks did not count towards his alcohol revenue and counted it as cover charge. Maybe the tax on alcohol is more than on just the cover. Who knows...probably just desperate to take shortcuts to help himself compete with Penthouse down the street.

SuperDude

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14 years ago

I may be getting ahead of things, but I wonder if the IRS will seize, forfeit or sell BT's and Tycoons to pay the unpaid taxes. New owners after a tax sale?

vincemichaels

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14 years ago

Let's call farmerart in Europe. Maybe he'll buy the place. LOL Detroit's East Side needs this club to return to its' glory days when the women were fine and the dances were very extras-friendly

farmerart

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14 years ago

Not likely, vince. Corporate tax rates in US are almost twice as high as in Canada. Believe it or not corporate tax rates are lower here in France, too. I can understand where your buddy, Nick, was coming from with this scheme. For the life of me I can't figure out why he just didn't skim some cash. Skimmimg leaves no traces and is impossible to prove without serious undercover work by the authorities.

samsung1

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14 years ago

When I first saw this headline I thought it read Strip Club Owner Pleads Guilty To Faking BOOBS.

vincemichaels

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14 years ago

BELIEVE IT, samsung1, if Nick could do that he would. Nick is as slimy as they come. He is well known in Detroit strip club circles and not in a nice way.

vincemichaels

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14 years ago

farmerart, in no way is Nick my buddy. I've met him in the past, he is a dirtball. Nick skimmed cash in all his clubs, he's a dirtbag.

Prim0

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14 years ago

You can't entirely blame him for trying to hold something back from the IRS. If I could get away with it, I wouldn't pay the exhorbitant taxes they require here in Ohio either. The government just wants to keep taking more and more. Last year Columbus Mayor Coleman was trying to explain about the need for a tax increase from 2% up to 2.5%. He said that of course over time the taxes HAVE to go up in order to keep providing services. Mr. Mayor, I'm no expert (obviously)...but by that way of thinking, then the taxes will eventually go up to 100%. Keeping the tax at 2% while the tax base increases is what gets the government its extra cash. F#cking politicians and the idiot voters that can't see through their BS!

tttclub

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14 years ago

I know a number of people that worked at BTs. The consensus is, that the entire Faranso family is pretty much a bunch of scumbags, especially J.R., who I guess is manages BTs. Sounds like they had it coming.

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