X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
A contemptuous Steven E. Kaplan told a New York nightclub owner how to milk intoxicated, besotted customers to increase weekly profits from $50,000 to $325,000. In a conversation laced with profanity, Kaplan explained that his Atlanta Gold Club was pulling in as much as $197,000 a week in revenues. “A hundred ninety-seven in bum-f— Atlanta,” he bragged. “And that’s real numbers.” Kaplan didn’t know his lesson in strip club economics was being secretly recorded on audio and videotape by attorney Michael Blutrich, then one of the owners of New York’s Scores nightclub. Kaplan wanted to buy an interest in the club and was selling Blutrich on his expertise. Blutrich was also a government informant against members of the Gambino crime family. The FBI had told him to record the conversation with Kaplan. Blutrich, who is serving a 16-year prison sentence for insurance fraud and racketeering, testified in the Gold Club trial earlier this month. The government intends to use Blutrich’s testimony to link Kaplan to the mob. Tapes played in court during his testimony also provided a business lesson in Kaplan’s strip club operations. Kaplan told Blutrich at the 1997 meeting that he taught himself the strip club business by visiting clubs in New York and in Texas. “I sat there for weeks,” he told Blutrich in the recorded conversations. “Nobody knew who I was, and I observed everything.” From New York, he said, he went “to every club in Texas, and I learned the whole thing. I put my formula together.” Then, he said, he put what he learned into practice at the Gold Club in Atlanta. “Your club can do so much money, it’s f—— sick, sick,” Kaplan told Blutrich and his then-partner, Lyle Pfeffer, who testified here Thursday. “It’s sick. Sick. Sick … . I can’t believe the numbers I do. You want me to be honest with you? I don’t understand it either.” KAPLAN: LOWER COVER CHARGE Kaplan urged Blutrich first to lower the cover charge. It discouraged people from coming in, he said, and the club owners had to give half of those proceeds to the mob. “In this business, I’ve learned, right? And I’ve learned it the hard way. F— that door s—. � You want bodies in that club. … ‘Cause for some reason, that plastic’s coming out, and they’re f—— spending it.” Kaplan also told them to get rid of the bar. “It ain’t no money,” Kaplan said. “You want tables and chairs. … Sit a guy down like a jack—, get his money . … A guy’s at the bar drinking a f——- beer. Kick him in his f——- a– out the door. You don’t need him there. You need guys sitting in the chairs and spending money.” Another club policy that had to change was requiring the waitresses to stay sober. At Scores, waitresses weren’t allowed to eat or drink on duty, “not even a Coke,” Pfeffer said. Kaplan responded, “If a customer wants to sit them down and buy a $200 dinner with them, you don’t let them do that? Why? What’s your theory behind that?” At the Gold Club, Kaplan said, “Our waitresses can get f—— hammered. … I want them to f—— sell my champagne.” WAITRESS STAFF TRIPLED Kaplan said he had tripled his waitress staff from 10 to 35 a night so that they could socialize with customers. “A guy likes a waitress, a guy gets turned on from a girl that don’t take off her clothes,” said Kaplan. “It’s not always that he wants an entertainer. Some guy is a fat, bald guy, and he’s intimidated by a beautiful girl. He sees a waitress, a little chunky or a little not so pretty, and now [he gets bolder]. ‘Come here, I want to talk to you.’ She says, ‘Listen, I could sit with you, but I want to drink champagne. Champagne turns me on.’ So now, what’s the matter with that guy buying four f——bottles of champagne on a homely waitress … and buying a dozen f—— cocktail shrimps and two 8-pound lobsters, or whatever you sell over there. And you knock out $1,500 from a waitress with a guy instead of a f—— entertainer going in there and f—— crawling on him and taking all the money … for herself and f—— the club. That’s the club’s money. That’s my theory. We’re here to make money.” “Are the waitresses all getting drunk and eating?” Pfeffer asked incredulously. “Yes, they are,” Kaplan answered. PRIVATE ROOMS Scores’ VIP section also needed to go, said Kaplan, and be replaced with private rooms. At the Gold Club, “Gold Rooms” are on the club’s second floor and rent for $500 an hour. The hourly rate rises to $1,000 when a convention is in town, Kaplan said. “You’ll do $400,000 a week,” he promised. “I’m telling you. … I charge $500 a f—— hour for a little cubicle. And they buy it. They buy it all f—— night.” Finally, he told Blutrich about “Gold Bucks,” scrip that customers use to buy table dances. Kaplan said he averaged $5,000 a week in unredeemed Gold Bucks. At Blutrich’s New York club, floor managers sold scrip to customers and pocketed the tips — about $6,000-$8,000 a week, Kaplan said. Those tips should go to the club, not the staff, he explained. GOLD BUCKS GIRLS In Atlanta, Kaplan said that instead of relying on floor managers, he had designated two women as “Gold Bucks girls” and they made the rounds of customers. Kaplan said he paid them “a percentage” of the tips. “They sit with the guys, sell the bucks, we get $10,000 in tips a week, $12,000 in tips a week … which your floor managers are now taking,” he said. “You guys aren’t getting it. It’s all going to your floor managers. You have no f—— idea how much these tips are. It’s ridiculous. And they don’t deserve the tips. You guys deserve them.” Kaplan said he not only encouraged the “Gold Bucks girls” to flirt with male customers and ask for tips, he instructed them how to do it. “A girl goes up in the rooms. She’s a girl that doesn’t want to take off her clothes, a good-looking girl,” he said. “She goes up. ‘How you doing?’ Bop de de ding. ‘I’m Suzy. Mike, how you doing? Where you from? Let me get this. Let me get it expedited right away.’ Boom. Right down. There’s an expeditor down there getting the Gold Bucks. “She goes right up there, sits down, puts her arm in, ‘How you doing? These are the Gold Bucks. Enjoy yourself.’ Ba bing ba bang. That’s all I do. I teach it to them.” Kaplan and his managers routinely held meetings with the club staff to demonstrate, through role-playing, how they could entice customers to spend more money, stripper Hannah Hames testified this month. In one session, club manager Thomas Sicigniano, playing the role of a dancer, told Kaplan, acting as a customer, “that he could/she could meet him back at the hotel room,” Hames testified. “They would rehearse things we could say or not say … “ Twirling her long, dark hair coquettishly, Hames explained that she never had sex with her customers but, “If we led somebody to believe we would meet them after hours, we could make more money.” Kaplan also used those meetings to promote the club’s champagne policy. Hames explained that policy in two words: “Order it.” “It’s not mandatory,” she explained. “I would say it’s highly encouraged.” HOW TO RUN UP A $25,919 TAB Hames said that the dancers usually stand by the front door waiting for customers to enter. Her explanation of how an Atlanta man, Dwight Allen Kent, ran up a $25,919 tab during a single night at the Gold Club in 1998 demonstrated how customers are seduced to spend. When Kent and his friends entered the Gold Club around 9 p.m. on Aug. 6, 1998, “I’m guessing we did our best to get them to go upstairs right when they walked in the door. … I’m guessing every person who was with Allen had one special or two special girls with him.” Hames said. They were drunk when they arrived, she said, “the norm” for customers. “It’s easier to go to the club after a couple of drinks,” she explained. “It breaks the ice.” Kent testified that he had had five drinks before arriving at the club. Perhaps because he had been drinking, Kent “was willing to sign anything or give us anything we wanted,” Hames testified. “We didn’t have to lie or manipulate the situation.” First, Kent bought a $1,000 club membership, according to a summary of his credit card charges. Then, he spent the next four hours in a Gold Room he rented for $475 an hour, drinking champagne and smoking $18 cigars. Once upstairs, “We usually order food,” Hames explained. Each customer’s credit card, she said, is kept at the bar. Kent paid $227.22 for food, including $100 for 10 crab legs and $46.80 for 10 jumbo shrimp. “They’re very expensive,” Hames whispered into the microphone. “You’re being charged for the ambiance.” Kent spent $2,800 on four magnums of champagne that night, Hames recalled. “I’m sure we ordered them,” she said of herself and a second dancer, Raven, who was with her that night. “If we ordered a magnum, that’s pretty normal.” What about four magnums? “That’s pretty normal, too,” she said. By the end of the evening, Kent’s purchases also included a $3,000 Gold Club leather jacket, $9,000 in Gold Bucks (for which he incurred an $1,800 surcharge) and $6,940 in tips for dancers and waitresses. He bought 75 percent of the Gold Bucks after 12:30 a.m. and the jacket after 2 a.m. By then, Kent had been drinking champagne with the dancers and waitresses for nearly five hours. Hames said that customers were usually asked to pay their tabs hourly, and Kent’s credit card summary shows that he did that. “I never would have told Mr. Kent the total amount,” Hames said. “It’s kind of like telling somebody it’s 4:30 in the morning and, ‘You ought to go home. You’ve spent $15,000 and you’re married.’ “

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.