Federal investigation reveals $400,000 kept in tackle boxes, beams at Queens str

avatar for ThatOtherGuy
ThatOtherGuy
Not really surprising news, just hope the place doesn't get shut down or suffer a mileage hit.

<a href="http://www.nydailynews.com/news/ny_crime… target="_blank">http://www.nydailynews.com/news/ny_crime… </a>

The pistol-packing owner of a popular Queens strip club has bared everything for the feds, opening his books to prove he's no boob when it comes to paying taxes.

Robert Potenza's testimony in federal court offered a rare glimpse into the inner workings of a jiggle joint - from his $1.5 million salary to the club's $4.50 cut on every $5 ATM transaction fee.

He says the tax agents who grilled him about the finances of Gallagher's 2000 in Long Island City were babes in the woods when it came to flesh peddling.

"They didn't seem like they knew much about my business," he testified.

The feds are seeking the forfeiture of nearly $900,000 seized from Potenza's TD Bank and Merrill Lynch accounts.

Government lawyers say he made more than 100 deposits of four-figure sums to avoid federal reporting requirements for transactions over $10,000. That practice is called "structuring" and is a red flag for tax evasion.

In a civil bench trial last week, the strip club king insisted he pays his taxes and said his mammary mecca is just a cash cow.

The club is awash in cash, with typically $400,000 on-hand, some stashed in a broken refrigerator, a fishing tackle box or atop a metal beam.

Dollar bills are the life blood, needed to make change - so Potenza's "house moms" collect the singles that dancers receive as tips and give back "tattered" $20 bills.

The "good" $20s are stocked in the ATM machine where Gallagher's takes a $4.50 cut on every $5 transaction fee, Potenza said.

Gallagher's pulls in about $9,000 in cash a day Sunday through Wednesday and much more Thursday through Saturday.

And Potenza, 61, is no easy mark - he's a longtime holder of an NYPD permit to carry a handgun, and he fired his weapon at a robber several years ago.

Brooklyn Federal Judge Brian Cogan noted that the feds' chief witness, the club's former general manager, claims Potenza pays workers off the books but invoked his Fifth Amendment rights when asked about his own income.

"If the contention is that the dancers are being paid off the books, why didn't I hear from a dancer?" Cogan wondered.

http://www.nydailynews.com/news/ny_crime…

7 comments

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avatar for ThatOtherGuy
ThatOtherGuy
13 years ago
Sorry the link at the top doesn't work properly. But the article is on the website. If you copy and paste the text at the bottom, it works. Sorry for the newbie mistake. Thought I used the correct html code.
avatar for vincemichaels
vincemichaels
13 years ago
Fuckin Feds
avatar for jackslash
jackslash
13 years ago
I've got to open my own strip club. What a cash machine!
avatar for newmark
newmark
13 years ago
Great club. I hope the guy has his shit in order. It would be a shame for anything to change for the worse there. But you can get in trouble a lot faster over money than over sex.
avatar for Dudester
Dudester
13 years ago
With that kind of money around, it would be very tempting to "launder" the money. Since that club was taking in serious $$$$, the mind boggles about the four strip clubs in Houston that were broken into in the late 1990's.
avatar for samsung1
samsung1
13 years ago
interesting article. This is NYC though so revenue is higher than most cities but the expenses are also higher.
avatar for georgmicrodong
georgmicrodong
13 years ago
I think the Feds are on just on a fishing expedition.
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