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CNN Burden of Proof

Strippers, Athletes and the Mob

Aired April 23, 2001 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)

JACKLYN BUSH, FMR. GOLD CLUB MEMBER: Professional athletes, movie stars -- I've seen a lot of people. I've seen tons of people in the Gold Club.

QUESTION: Who did you dance for -- famous people?

BUSH: Well, you know, I'm not going to name names. They know who they are.

These are allegations that they've gotten the indictment, which are totally false. And I really have no comment on that. But it's false.

KEVIN HALLINAN, MAJOR LEAGUE BASEBALL: Nothing has been proven as yet. But, certainly, what they are suggesting went on in the Gold Club is very, very unattractive to professional sports.

(END VIDEO CLIP)

ROGER COSSACK, CO-HOST: Today on BURDEN OF PROOF: strippers, professional athletes and the mob: Well, the three are connected in a case before the federal court in Atlanta.

(BEGIN VIDEO CLIP)

STEVEN SADOW, ATTY. FOR STEVE KAPLAN: We can show those allegations, those claims are inaccurate and false. And we have been waiting over a year now for that opportunity. Bring it on, please.

(END VIDEO CLIP)

ANNOUNCER: This is BURDEN OF PROOF, with Greta Van Susteren and Roger Cossack.

COSSACK: Hello and welcome to BURDEN OF PROOF.

Next Monday in Atlanta, jury selection is scheduled to begin for a federal case involving the Gold Club, a trendy strip club in Atlanta. Now, the owner of the nude club -- nude dance club, Steve Kaplan, and 14 other defendants face charges ranging from prostitution to money-laundering and loan-sharking. Sports fans will recognize some of the names on the witness list, including Dennis Rodman, Terrell Davis, Patrick Ewing and Jamal Anderson.

So joining us today from Atlanta is Steve Sadow, attorney for Gold Club owner Steve Kaplan. Here in Washington: Ryan Travis (ph), former federal prosecutor Larry Barcella, and Joni Jaje. In the back: Regina Simpson (ph) and Chris Kenny (ph).

Also joining us from Atlanta is CNN's national investigative correspondent Art Harris.

Well, Art, you have been covering this case for a long period of time. Now, tell us basically what the allegations are.

ART HARRIS, CNN INVESTIGATIVE CORRESPONDENT: Well, the indictment charges more than sex was provided free in the Gold Club to professional athletes to keep them coming back. Whether they knew about it or not will be decided by the jury. But that's not the issue. They are not charged any criminal wrongdoing. It's Mr. Kaplan and associates who are charged with prostitution, in fact, paying the dancers who entertained these athletes who came to the Gold Club and actually made it a very hot place to be.

A lot of businessmen came, spent a lot of money. At its height, it made $20 million a year. But it's also -- it's beyond sex. It's about credit card fraud, skimming cash -- these are all in the indictment -- money laundering, police corruption and paying protection money to the Gambino organized crime family. Roger, this is a RICO case. About it's about the mob allegedly coming to Atlanta.

COSSACK: Steven Sadow, you represent Steve Kaplan, who is the -- nominally, the head -- I suppose -- defendant in this case. How do you plan on defending him?

SADOW: Well, how about we start with the truth and go from there?

COSSACK: It's always a good way to go. Let me hear it.

SADOW: Well, the truth is that Steve Kaplan is a legitimate businessman, has been so his entire life. He happens to be enormously successful, which, apparently, has upset the government, because they want to take it all away from him.

COSSACK: Well, Steve, there's allegations here that -- obviously, to get a little more in-depth -- that your client is a part of a -- is a conspirator in a racketeering charge -- provided prostitution, credit card skimming, all of various things. Is it that your client didn't know these things were going on or that they just didn't happen?

SADOW: They didn't happen. And we will be able to show that through the government's own witnesses, as well as witnesses we choose to call.

COSSACK: Now, I understand that you did your own investigation and discovery, as any good lawyer would do. And, certainly, there's no debate about you being a good lawyer. And in it, you had a tape recording of a witness by the name of Debbie Pinson, who allegedly said that, in fact, prostitution did go on. And that was one of the witnesses that you went ahead and investigated. Is she not telling the truth?

SADOW: Well, she's not telling the truth. We investigated as many of the witnesses as we could from the government, which is probably in the neighborhood of 300 people. Ms. Pinson we knew held a grudge from her prior contacts with Mr. Kaplan. And we just wanted to know what she was telling the authorities. We knew she would be lying to them, because the allegations she was making are factually unsound and untrue. We just wanted to know what it was. And this is the only way we could get to it.

COSSACK: What do you expect the athletes to say who are being subpoenaed by the government as witnesses? Obviously, the government believes they are going to come in and say that they received -- or perhaps engaged in some form of prostitution with the prostitutes? Do you expect them to deny that?

SADOW: Well, I expect them to tell the truth, which means they certainly will deny that. First, there are no prostitutes. Second, these athletes had great times at the club. They've been there often. I'm sure they will continue to come. It's one of the best adult entertainment places in the United States. We hope that they are called in, because, if they do, they will show that the allegations are definitely false.

COSSACK: All right, I'm going to interrupt for a second and go to Atlanta for Stephen Frazier.

(INTERRUPTED BY LIVE EVENT)

COSSACK: Federal prosecutors are preparing their case against the owner of a nude dancing club in Atlanta and 16 other defendants. Now, in many cases, professional athletes were comped for food and entertainment at the Gold Club. And now those athletes are being subpoenaed to testify in court.

All right, Larry Barcella, former federal prosecutor, this is the indictment in this case. It's about 100 pages. And what it really gets down to -- after it's called racketeering and fraud and RICO and all these terrible, bad things -- are a whole lot of allegations about prostitution that went on inside a nude club, a whole lot of overtipping, and perhaps the credit or forging of tips, and a whole lot of allegations that, traditionally, I have always thought of that the local police take care of. Why is this a federal case?

LARRY BARCELLA, FMR. FEDERAL PROSECUTOR: Well, of course, one of the charges in there is just that: that the local police were taken care of. So, obviously, there was some federal concern that, given the fact that you have allegations that Atlanta police officers were involved in some of the activity, were taking payoff money, were fixing tickets and things like that, there might have been a concern that the local authorities might not have taken care of it.

Secondly, of course, you're talking about in the indictment -- which, for good reasons, is trying to read like a book, like a novel -- you are talking about connections to the Gambino crime family. Organized crime prosecutions have generally been the province of the federal government. So, in that respect as well, you can see what the federal interest would be.

COSSACK: All right, now you bring the federal government into this and you make -- no jokes intended -- a federal case out of it. In fact, in some ways, you have this 100-page indictment. Isn't there a whole lot of -- involved in this, a whole lot of, "I am going to keep throwing charge after charge after charge and see if I can make any of it stick"?

BARCELLA: Well, it goes back, certainly, what, 13, 14 years with the first set of facts that they have in there. And, to be sure, what they are attempting to show in here is a pattern of racketeering activity. The statute that they charged under the RICO statute requires a pattern of racketeering activity. It gives the government a perfect opportunity to go back, try to establish their pattern by going back as many years as they can and bringing up as many things as they possibly can. And, obviously, there is the distinct possibility that it has the effect of throwing as much up on the wall as they possibly can and hoping it sticks.

COSSACK: And, Steve, isn't that your problem? The fact of the matter is, there's so many allegations in here of wrongdoing that eventually a jury is going to say, "You know what, some of this has got to be true."

SADOW: Well, it's certainly what the government's approach is here. I think we probably go back to the theory of garbage in, garbage out. Everything in there they have alleged they will be unable to prove. And we are just going to have to take it apart piece by piece to convince the jury that it is garbage.

COSSACK: What about the allegations that there was some connection with the crime family, the Gambino crime family? Will they be able to prove that?

SADOW: They won't be able to prove that at all. In fact, if there is anything that is ludicrous beyond what would be even common sense, is the allegation here. And I will start with the idea that the case begins in 1988, according to the government, in which, based on their own allegations, Steve Kaplan is being extorted. He's a victim at a club that he owns up in New York. And that's how they start off with organized crime: that Steve Kaplan is extorted.

Somewhere along the line, then, they want to change it to make him partners with organized crime. It's all baloney.

COSSACK: Art, what about the witnesses in this case? Who do we expect to testify? How do we expect the government is going to be able to make their case?

HARRIS: First, they have to establish a mob tie to Mr. Kaplan in Atlanta. Traditionally, Atlanta has not been a mob city. But they can trace -- or they are going to attempt to trace the beginnings of his association. He's called -- allegedly -- what they term an associate. He's not a made member. He's not a member of the family in any way. But an alleged captain named Michael DiLeonardo, AKA "Mikey Scars," began his association with Mr. Kaplan, allegedly, in the mid-'90s, and is said in the indictment to have been taking large sums of cash from Mr. Kaplan to the crime family for protection.

And during that period, Mr. Kaplan prospered. Other nightclub owners did not do well as he rose to the top. And there are many things, including a witness that Mr. Sadow has referred to as speaking nonsense, that the government believes is going to be quite credible, because the way Mr. Sadow had this person taped -- the former employee -- was to send one of her friends who was helping the defense -- and secretly taped her. And she testified that, in fact, when she was asked whether Mr. Kaplan knew what was going on, said that he, in fact, looked in the rooms, knew

(CROSSTALK)

COSSACK: All right, let me jump in for one second.

But, Steve, also in that conversation, she also said -- isn't this true? -- that she never saw any crime going on inside the Gold Club.

SADOW: Precisely. She said she was unaware of criminal activity. And it's that nugget of truth which we were looking for.

COSSACK: All right, Larry, as a prosecutor, what kind of jury do you want? Are you afraid that some jury may look at this and say: "Come on, these kind things happen inside a strip club; people who go in there know what they are getting into, and, you know, you can't come crying about it now"?

BARCELLA: That's what you would be concerned about. If you were a prosecutor, what you want is a good God-fearing jury that is just going to be shocked that there was prostitution going on in Atlanta, Georgia.

COSSACK: Steve, come on, what kind of jury are you looking for?

SADOW: I'm looking for businessmen, people that have experienced a little bit of life, have gotten out, lived a little bit, and know that, while morality wise, a ;lot of people are against adult entertainment, it is something that goes on. It's tax revenue for the city of Atlanta. It's a good thing. And it is not in any way connected with organized crime.

COSSACK: All right, we haven't heard the last of this case. But that's all the time we have for today. Thanks to our guests. Thank you for watching.

Join us again tomorrow for another edition of BURDEN OF PROOF. I'll see you then.

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