Sat, Mar 21, 2015

A day after three Grand Strand area businessmen and a former Myrtle Beach police officer appeared in U.S. District Court on federal money laundering and racketeering charges, questions still remain as to why it was filed across the country and whether more arrests are pending.

One defendant, Michael Rose, owner of the former The Gold Club gentleman’s club, has seen his company’s days in court, though his attorney for the federal case, Solomon Wisenberg, of Washington, D.C., was adamant Thursday about Rose’s lack of criminal record to U.S. District Court Judge Kaymani West, who granted an unsecured $500,000 bail for Rose and co-defendants David Gaither and Peter Scalise. A fourth defendant, Vladimir Handl, did not have his bail set.

Rose, Handl, owner of Heat Ultra Lounge, Scalise, owner of Zest restaurant, and Gaither, a former Myrtle Beach police officer, were indicted this week for conspiring to conduct the affairs of a business through a pattern of racketeering involving money laundering, bank fraud, and drug trafficking.

Between 2011 through the present, the defendants knowingly accepted more than $2.3 million that they believed either had been fraudulently diverted from a bankruptcy court proceeding or constituted proceeds from drug trafficking, and then laundered the money through their businesses, including Rose’s The Gold Clubs.

The indictment further alleges that as part of the laundering scheme, the defendants created fraudulent invoices, contracts, and other business records to make it appear that the money they received and “cleaned” was for legitimate business transactions, according to the release. The defendants also sought to acquire cocaine to sell, according to the U.S. District Court office.

Neither Rose nor Wisenberg returned messages for comment.

Details of Rose, Scalise and Gaither’s scheduled appearance Monday at the Northern District of U.S. District Court were not available Friday. The case remained sealed Friday, so further details of the case, including while it was being filed in California, were not immediately available. Messages for Abraham Simmons, assistant U.S. Attorney who is involved in the case, were not returned.

Last summer, Rose re-branded The Gold Club into a regular nightclub called The Empire Club amid pressure from Horry County on all adult-themed businesses for what it called the secondary effects of those businesses.

Jimmy Richardson, solicitor of the 15th Judicial Circuit, helped prosecute and essentially close adult-themed businesses throughout Horry County. Investigations were performed at The Gold Club before a judge ruled it — along with other adult businesses — was a nuisance because of illegal activity occurring in and around the business.

Richardson said he had not heard of this week’s indictments until it was reported in the media.

“We didn’t know that the feds were investigating,” Richardson said. “Sometimes they will call us and say ‘Hey back off, we’re doing much bigger things than a closure.’ But they didn’t. And honestly, if they had, we would have.”

Businesses closed during Richardson’s most recent sweep included Fantails Gentleman’s Club, Tiffany’s Cabaret, Teezers, The Bunny Ranch, Bottoms Up, Airport Express Video and The Gold Club re-branded itself to the Empire Night Club before a judge ruled it to be a nuisance. Horry County also has worked in recent years to close Celebrations in the northern end of the county and Tequila Empire.

Richardson said the investigation into drug use and sale at The Gold Club did not stand out among the other adult businesses.

“I don’t know as it was any more or any less than the other ones as far as the drugs,” Richardson said. “But you definitely tell that there were a lot of drug sales going on at The Gold Club and you could tell that there was a lot of prostitution going on. I knew that it wasn’t just a local club. Most of the other ones were local. I kind of felt like there was something else out there, but we didn’t have to speculate a lot. It was drugs and prostitution.”

Rose has also sued the county claiming it was violating his right to open an adult entertainment club — The Gold Club 2 — at the former Thee DollHouse location.

In March 2013 and again in August of that same year, Rose applied for a nightclub/restaurant business license to open The Gold Club 2 and was denied both times. In September 2013, Horry County adopted new adult-themed business license restrictions, dictating, among other things, what needed to be covered on a dancer’s body, how tall the stage needed to be and how close the dancers could get to customers. Rose was granted a certificate of zoning later that month for the The Gold Club 2 property, but the county fought Rose’s contention that he had the right to obtain a business license for The Gold Club 2.

Rose, through his company, MJJG Restaurant, took the county to court on their denial, claiming he had the right to run the adult business and the county was wrongfully denying his application. In March 2014, Judge Mary Geiger Lewis denied Rose’s request for a preliminary injunction in the case, which means the judge did not believe Rose was likely to succeed in his case on the merits of his constitutional challenges.

In October, the county filed a motion for summary judgment claiming Rose failed to show the unconstitutionality of the county’s adult cabaret definition. Summary judgment is requested when one party feels there is no genuine issue of material fact. In this case, the county feels like it is entitled to judgment as a matter of law.

Judge Bruce Howe Hendricks heard the arguments on the motion for summary judgment earlier this month and took the issue under advisement. Hendricks will decide whether the county’s policy meets the Supreme Court’s threshold standards for secondary effects ordinances.

Neither Rose’s attorney in the civil case, Michael Murray, nor the county’s attorneys, James Battle or Scott Bergthold, could be reached for comment Friday.

Lisa Bourcier, spokeswoman for Horry County, released the following statement: “Mike Rose’s indictment does not affect the civil lawsuit regarding Gold Club and the county’s ordinances.”

Richardson said the county’s investigation showed drugs were easily accessible in the adult entertainment industry.

“Our investigators didn’t have any problems,” Richardson said. “They were offered drugs. It was rampant in these clubs.”