By Abigail Goldman
Las Vegas Sun
May 27th, 2007
Detective Jeff Gentry is undercover in Chinatown, waiting for a taxi driver he tapped to negotiate the price for a night in a neighborhood brothel – a plain vanilla apartment with cream leather sofas and soft music piped over a haggling housemother, who tells the driver that she charges $150 for “full service.”
Gentry knows the brothel’s base rate, but expects the cab driver to quote him $300 and poof! – pocket the rest. He does.
A working girl wearing a white robe and nothing else offers Gentry a drink. He declines.
By then, his cab driver is out the door, $150 richer.
Not bad for 20 minutes of work. Welcome to the wide world of kickbacks – the quick cash transactions keeping Las Vegas’ salacious side alive.
Although the statement is apt to infuriate them, taxi and limo drivers who take kickbacks from illegal brothels and strip clubs are crucial to keeping such businesses afloat.
Drivers often act as brokers for brothels, shuffling tourist johns to hidden locations, setting the fees and taking their cut. And because brothel owners need tourists chauffeured to their doors, they advertise to drivers, handing out business cards in the taxi lines outside casinos, each with a kickback quote and number to call.
During Operation Dollhouse, the two-year investigation into illegal brothels that ended in April with seven people arrested and 25 prostitutes detained, police charged John Gregory Keyes, 50, with nine counts of living off the earnings of a prostitute, charges that police reports indicate Keyes fessed up to when he was discovered at a known house of prostitution off Spring Mountain Road at 2:30 a.m. on a Saturday night.
At the time Keyes was arrested, he was employed as a taxi driver, according to the Nevada Taxicab Authority.
Police did not respond to questions about what role Keyes played in the prostitution ring. Taxicab Authority records indicate Keyes has since been terminated.
Prostitution is illegal in Clark County, but taking kickbacks isn’t. As long as a passenger is delivered to his or her desired destination, tips are allowed. It’s diverting a passenger, pushing a person into going to one place over another, that gets a cab driver in trouble.
This is where strip clubs get involved, and the kickback game becomes much more complicated. and costly.
That December a strip club coalition, the Nevada Association of Nightclubs, decided to ban kickbacks. Bounties reportedly rose so high that the entire strip club community was hurting: spending too much to lure clients or losing too much to clubs willing to pay more.
When it became clear in 2006 that some strip clubs weren’t abiding by the kickback agreement, the association started filing lawsuits and hiring private investigators to prove palms were still being greased.
Association attorneys hired private investigative firm De Becker Investigations to catch cab drivers diverting strip club clients for kickbacks.
After four nights of hailing cabs, De Becker operatives had seen enough.
When he asked to go to the Palomino Club (a member of the association then not paying kickbacks), cab drivers gave all sorts of reasons why they wouldn’t take him: The surrounding neighborhood is a ghetto, the cover charges are too high, it doesn’t serve alcohol ( it does), other clubs are better.
One cab driver, a woman, told De Becker’s people the Palomino was a place where old strippers went to die.
Drivers who got comfortable, De Becker’s operatives reported, opened up about the kickbacks. Some said they were getting more than cash: DVD players, flat-screen TVs, even an evening at a legal brothel. Other clubs were handing out swipe cards, scanning drivers as they came in, racking up points for prizes.
The nightclub association’s attorney, Dominic Gentile (who acquired the Palomino Club in March 2006 as payment for defending the previous owner in a murder investigation), alleges strip clubs are doing more than diverting customers: They’re committing massive tax fraud, writing off the kickbacks as a business expense and not reporting the driver’s income to the Internal Revenue Service.
Interim Chief Investigator Joe Dahlia has been working for the Nevada Taxicab Authority for 18 years. Kickbacks have always been a topic of discussion, he says, and the difficulty with diversions hasn’t changed: Money talks.
Brothels pay bigger bounties, so it makes sense that cab drivers pushed bordellos on De Becker’s investigators.
One driver asked whether a De Becker operative was a cop, and satisfied that he wasn’t, suggested the investigator visit Sensations, a massage parlor on Industrial Road where De Becker’s man could get “full service” for $160.
Detectives raided the business this month and arrested customers who admitted they were there for more than massage.
Abigail Goldman can be reached at 259-8806 or at abigail.goldman@lasvegassun.com