Crazy Horse Too going on auction block July 1

After more than four years of failed efforts to sell the Crazy Horse Too, mostly by the government, the once-popular strip club is going on the auction block.

A July 1 public sale has been set for the shuttered club, which sits on prime real estate on Industrial Road near Sahara Avenue in the shadow of the Strip.

Lawyers for the Canico Capital Group, the investment firm that owns the first deed of trust on the property, filed notice of the auction in federal court this week.

The move came as lawyers for Kirk Henry, a Kansas City-area man paralyzed after a 2001 beating at the club, filed court papers seeking to freeze assets of the club’s former owner, Rick Rizzolo.

Attorneys Don Campbell and Stan Hunterton contend that Rizzolo has led a life of luxury since being released from prison in April 2008 while ducking his responsibility to pay Henry and his wife, Amy, $10 million in court-ordered restitution. The Henrys have received only $4,000 from Rizzolo, the lawyers reported.

“Plaintiffs spent the last decade suffering as a result of Rick Rizzolo’s criminal acts and have received almost nothing in return,” the lawyers wrote.

Campbell and Hunterton allege Rizzolo has been running up $900-plus nightclub and restaurant tabs while hiding hundreds of thousands of dollars from the Henrys in offshore trust accounts.

“Rick Rizzolo is not afraid to flaunt his lavish lifestyle either, as he recently appeared in open court wearing a Rolex worth approximately $30,000,” they wrote.

The lawyers want U.S. District Judge Philip Pro to bar Rizzolo from spending any of the cash he received from the sale of a Philadelphia strip club in 2008. Rizzolo received $1 million from the sale and could get as much as another $2 million.

The deal prompted federal prosecutors to mount an effort to send Rizzolo back to prison for violating the terms of his supervised release. They contend Rizzolo unlawfully hid from his probation officer a series of lucrative financial transactions involving the sale.

Pro this week put off final arguments on whether to revoke Rizzolo’s probation until July 20.

When the government took control of the Crazy Horse Too in 2007, the club was still open and had a value as high as $35 million. But now, it is estimated to be worth $2 million to $3 million.

The U.S. Marshals Service hurt the club’s value by letting its liquor and adult entertainment licenses lapse. Under current city zoning laws, the lapse prevents a future adult nightclub on the property.

Rizzolo, long suspected of having ties to organized crime, pleaded guilty to a felony tax charge in June 2006 to end a decade-long FBI racketeering investigation. He agreed to pay several million dollars in fines and taxes along with the $10 million in restitution to the Henrys.

Rizzolo, who served 10 months of a one-year prison sentence, contends that had the government sold the club at the height of its value , there would have been plenty of money available to pay the Henrys and Rizzolo’s other debts.