Retired Intelligence Detective Gary Jenkins brings you the best in mob history with his unique perception of the mafia. In this episode of Gangland Wire Crime Stories, retired police detective Gary Jenkins speaks with former FBI agent Mark Sewell, who delves into his investigation of the notorious Gold Club in Atlanta and its ties to organized crime.

Mark shares his journey from the Marine Corps to the FBI, detailing how his training prepared him to tackle organized crime. The discussion highlights the world of strip clubs as a major revenue source for criminals, drawing parallels to his early police work in Kansas City. At the heart of the conversation is the Gold Club, owned by Steve Kaplan, who turned it into a hotspot during the 1996 Atlanta Olympics, attracting celebrities and high-profile figures. Mark describes the criminal activities that took place, from credit card fraud to connections with the Gambino crime family. Mark reveals the challenges of infiltrating the club and gathering evidence, including working with strippers as informants and tracking financial transactions. He also discusses key figures in the Gambino family, such as Mikey Scars DiLeonardo and Steve Kaplan’s partnerships with corrupt police officers and mob players.

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Investigating America’s Most Notorious Strip Club: The FBI, the Gold Club, and the Mafia

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Transcript

0:00] Well, hey, welcome all you wiretappers. Good to be back here in the studio of Gangland Wire. This is Gary Jenkins, retired Kansas City Police Intelligence Unit Detective and later Sergeant. I’ve got this podcast, Gangland Wire, and we look into the mob. Today, I have a great story, a real mafia story. You know, and we saw this in Kansas City. These guys love these strip clubs because there’s a lot of money to be made out of strip clubs. And maybe some of you have heard of the gold club down in Atlanta. When I first got Mark’s book, our guest, you know, I thought I remembered that there was all these Patrick Ewing and all these big-time basketball players going there. And it was a hell of a scandal, but I didn’t remember much about it, but Mark Sewell. Welcome Mark. I really appreciate you coming on the show.

[0:46] Well, Gary, you’re, you’re very welcome. I’ve been a fan of your podcast and your media work for a while too so i’m glad to do this thanks for having me well good and i told you before like you know we had the same thing in kansas city and these bobsters they love strip clubs there’s a lot to to make out of a strip club besides the money besides a skim besides blackmail on people possibly and and all kinds of things can be made for the mob out of a strip club and and you dive right into the middle of it. Now, Mark, your first office was down in Atlanta, but before that, tell us a little bit about your history and what led you to join the FBI. Sure. Shortly after high school, Gary, I joined the Marine Corps out of the Houston, Texas area, 1987. And I stayed in the Marine Corps until 1997. During that time, I was able to earn a commission.

[1:45] So when I left the Marine Corps, I was a young captain in the Marine Corps. And I was stationed in Honolulu, Hawaii, or Kaneohe Bay, Hawaii. But I recruited into the FBI out of the Honolulu office there. And that recruiter, FBI recruiter, came over to the Marine Corps base and took seven officers out of my battalion in about a one-year period. Period because we all had security clearances because we were intelligence battalion. Yeah. And so we, she knew we could pass the FBI’s background investigation because we already had these top secret clearances and so forth. So I joined the Marine Corps out of Hawaii in 1997.

[2:27] Excuse me. I joined the FBI. I was in the Marine Corps. So I joined the FBI in 1997. I go to the Academy in Quantico, which I’m already familiar with Quantico because as you know, the Marine Corps has, that’s their place actually. The FBI is a tenant on the Marine Corps base. So I was very familiar with the Quantico landscape and I get there in 1997. I complete new agent training and I get assigned to Atlanta, Georgia as my first office. I have to assume that the basic training of an FBI agent was a little bit different than the basic training of a Marine Corps.

[3:04] Yeah, you know, you make a good point because as a Marine, you go there wondering, is this going to be anything like what I’ve experienced in the past, right? Because when I went to OCS, Officer Candidate School, that’s kind of like a boot camp for officers. And you know that’s that’s a that’s a screaming event and a stress event and that kind of thing but i tell everybody that the fbi academy is what i call a gentleman’s course compared to the marine corps so i was uh pleasantly surprised and relieved yeah i bet you get a little bit older you can’t you you ain’t playing that homie don’t play that anymore having people screaming yell at you trying to make you look like an idiot and demeaning you and breaking you down all the way so they can build you back up. You know, I know that drill. Anyhow, so, you know, you get out of the Quantico Academy and your first office is Atlanta, Georgia. I assume you didn’t get to go back to Hawaii or you hired in at Atlanta.

[4:02] I didn’t want to go back to Hawaii, to be honest, because it’s just so doggone expensive out there. And, you know, there’s a chance when you go out there as an FBI agent that you could be there a long time. The Marine Corps is going to move you every three years, But you could go out there potentially in today’s FBI and you could spend your whole career out there. So the idea of spending a decade in Hawaii with that cost of living, we loved it, but we were ready to move on. So Atlanta, cost of living in Atlanta was a lot better. Yeah, I can only imagine. Atlanta is probably going to be more like Kansas City, although it’s probably more expensive than Kansas City. But it’s going to be more like the Midwest than Hawaii for sure. And then, of course, you know, FBI agents, guys, you may or may not know this. Agents that get assigned to san francisco and new york and i’m not sure if there’s another one or not but they have to get a little extra stipend because it’s the cost of living is so expensive and it’s true so it’s you know it’s a problem living in those huge big cities like that besides all the traffic and stuff of course that’s where the action is i assume washington dc gets an extra stipend too i would think and that and that is the the payoff you you mentioned it yeah working in New York, living in New York can really be a hassle, but if you’re looking for quality FBI type of work.

[5:20] Then there’s no place better than New York, right? So it’s a give and take sometimes. The great thing about Atlanta was there was great work because Atlanta is the ninth largest city in America. That’s home to a number of Fortune 500 companies, but yet the cost of living is a lot less. Yeah, you don’t have the old school Italian mafias, you know, ensconced in Atlanta, but there’s plenty of organized crime in Atlanta to work on in there. That’s right. And, you know, and I was surprised when I learned that I was going

[5:51] to be assigned to the Organized Crime Squad. I just knew a little bit about organized crime having grown up in Texas.

[5:59] And really all I knew was what I read in the newspapers or saw on television. And then I find out I’m going to be assigned to an Organized Crime Squad. And then specifically, I’m going to be assigned to the LCN part of the Organized Crime Squad. And I always made the joke. I had to go out and research what is the LCN because I really didn’t know a lot about it. I knew one name, John Gotti. That’s all I knew. That’s because he was in the headlines during that era.

[6:27] That’s all I knew. I was drinking from the proverbial fire hose. I had a lot to learn. Yeah, you did. You found out that their tentacles reach out to Atlanta and a whole lot of other places in the United States, any place there’s a large city and there’s opportunities for advice and ways to make money. These guys, they’ve got their, they got their fingers in it somewhere. And especially a place like Atlanta, because there’s a lot of money to be made in Atlanta. But one of your early case, you were, I guess, let’s go back your first off office. And then your first, your break-in officer, he was assigned to be your mentor, was a man named Simmons, John Simmons. Tell us about working with John Simmons. I had read in your book that that was a real positive, great experience for you.

[7:16] It was. John is what we call a Hoover agent, as you well know. Yes, I know what. John came in the FBI when J. Edgar Hoover was still the director. And when I joined in 97, there were still a handful of Hoover agents left in the Bureau, but not many. And they just did things different. They operated different. They talked different. They had a different attitude. It just was a whole different way of life. I went through in my career, I went through FBI directors, but you have to remember, J. Edgar Hoover was a director for 49 years in the FBI. So he was the FBI. So John was a Hoover agent and John had broke into the FBI work in organized crime as well and had really worked his entire career by the time I get assigned to work with him in 1997. At that point, he had 27 years already in the FBI.

[8:13] And the vast majority of that was working organized crime, was working the LCN.

[8:19] Starting when he was assigned as a new agent out of the academy, he went down to Tampa really quickly for about a year and then they ship him up to New York and he gets assigned to this brand new organized crime squad that the FBI had just kind of started. James Calstrom was on that squad, for example, some of the noteworthy names in the FBI, and they were working this case. This guy named Joe Pistone had a case going on. And so that’s how John broke in with the FBI is helping work the Donnie Brasco case. And John was in New York for 10 years. And then he went down to Miami and worked Wise Guys down there for about eight years and then came up to Atlanta for his, around his 20th year in the FBI, he gets up to Atlanta and work an organized crime there. And then this Gold Club case gets brought to his attention.

[9:16] And John realizes, and the new supervisor, Kenny Power of the squad, realizes we’re going to need some help on this case because it’s big. One guy can’t do this and so me right out of the academy i get assigned to the squad and i get assigned to john to help him on this case eventually we built it out to four agents working it exclusively but it started with john interesting yeah he’s he went all the way back and i’ve got a friend here in kansas city doug fensel who was on the gambino squad during that time and doug actually was one of the guys that went to sunny black and said hey joe pistone is is not donnie Roscoe and he’s not an informant. He is an FBI agent. So I talked to Doug, I’ll probably see him in the next week or so. We need to set up another breakfast with a mutual friend of ours.

[10:03] So that’s, those are pretty exciting people to come down to Atlanta. Some of the Gambino guys and you got John Simmons there who, who knows the Gambino family. And so how did you, you look at the gold club and you see, you find this guy named Steve Kaplan and Steve Kaplan, I kind of had an investigation works guys is you find this guy who’s who’s run the thing and you say well where did he come from who is this guy let’s go find out about him and start sending out leads right and and so how did that work from there just check did john simmons know him and know that history he had with the gambinos or how did that work can you describe that yeah i can sure steve kaplan bought the gold club in 1994 as a wise business investment to get ready for the 1996 summer Olympics, which were coming to Atlanta.

[10:54] You know, Atlanta was going to have millions of males that are young and, and sports fans, you know, come down into the city and what are they going to do in their off hours? There was money to be made. Strip clubs knew it. And so that’s where you wanted to be. If you wanted to make some money during the Olympics, that was one of the many money-making opportunities. So Steve bought that club in 94 after successively running a number of nightclubs, legitimate nightclubs, discos back in the 80s, nightclubs in New York and then down in Miami. This was his first adult business that he got into.

[11:33] In Atlanta or a gentleman’s club, as you call it, because it was high end. You know, it wasn’t a shady place. It was a very high end place. And he bought it in 94.

[11:43] And as soon as he bought it, New York picked up the telephone, the FBI agents there and called John, his connections, you know, John still had connections all over the FBI. And they said, Hey, John, we just want you to know that one of our leading associates up here in New York just bought a club down in your area. and you might want to look into it. And that’s how John first came about the case and Steve Kaplan. And then to answer your question also, then you start figuring out, well, who is Steve Kaplan? And of course, New York already knew who he was. So they give us his dossier, if you will, and start telling us a little bit about who Steve Kaplan is. But there’s still a lot to learn. And you know, the FBI only knows so much about a guy. We didn’t have any turncoats, if you will, or sources directly tied to Steve Kaplan yet. So we didn’t know everything about him. Once we made the case and some of his closest friends cooperated against him, we learned even more about his mob connections. But he was tied at the highest levels, Gary. I mean, he was ultimately to jump way ahead. He was in John Gotti Jr.’s crew and John Gotti Jr. Doesn’t take guys on that aren’t making money, right? So that’s who he was. And that’s how we found out about him was New York gave us that big heads up, and then we just started working the streets.

[13:02] Interesting. And we had a little conversation just before we started recording about, we’re going to talk about Michael D. Leonardo or Mikey Scars in a little bit because he was involved, but.

[13:12] Mark and I were comparing, I was telling him about interviewing Mikey’s cars and he was telling me about when he was made and Mark said, yeah, that was like the rookie class that made it big in, in the FBI. I mean, in the, uh, organized crime, the Gambino crime family. And what’s interesting is Steve Kaplan was connected to all of them almost throughout his thing. And so tell us about that, that the making ceremony was John Gotti Sr. Didn’t want to make his own son. So he had Sammy the Bull do the ceremony and John Gotti Jr. And Mikey Di Leonardo and Bobby Borrello and another guy whose name we can’t seem to remember were all made in that class. And so tell us about Kaplan’s connection. I know he was, it was connected to Bobby Borrello, but he seemed to go from one guy to the other for a while.

[14:06] Yeah, that class you’re talking about, that induction ceremony was Christmas Eve of 1988, if I’m not mistaken. And Bull Gravano, yeah, he did lead that ceremony, if you will. When Steve first came to the Gambino’s attention is when he owned a nightclub in New York in the mid-1980s. And, you know, kind of like the old joke goes, the Gambino’s made him an offer he couldn’t resist. Right. So he he gets he gets into bed with the Gambino’s and he’s first assigned

[14:37] to the crew of a guy named Frank Marano, a.k.a. Frankie Blair from the mid 1980s. But their relationship does not work.

[14:47] Well, and Steve was making enough money at that time, even in the early 80s for the Gambinos that he had already caught their attention. And what we were told later is that Steve was able to go to John Gotti Sr.

[15:03] And tell and ask or or make a make an issue that, hey, I don’t like this guy, Frankie Blair. I don’t I don’t like him. He’s not good for business. Give give me somebody else to work with. And so the story is, is that John Gotti Sr. Reassigned him to a guy named Shorty Muscusio, Anthony Shorty Muscusio, who was a close friend of John Gotti Sr. And so the theory is that he reassigned Steve Kaplan to Shorty Muscusio and says, hey, Shorty, take care of my guy here. He’s got some problems with Frankie Blair. Let’s treat him right because he’s making good money for us. And so Shorty takes over and Shorty was a famous mobster in his own right. He had his photo taken one time in 1987 during one of the John Gotti senior acquittals at the state level where he, when John Gotti came out of the courtroom, the first person to greet him was Shorty Muscusio with a handshake and then escort him into a Lincoln town car that was waiting on the curb and then get him out of there. And that photo went nationwide and that was Shorty, Shorty Muscusio. And that’s who Steve Kaplan ended up with. That was his second handler, if you will. And, but Shorty.

[16:19] Got sideways with Steve Kaplan’s business partner at a club called Bedrocks in about 1987-ish. And one night, about one or two in the morning, there was an altercation between Steve Kaplan’s partner, a guy named Dave Fisher, and Shorty Muscusio. And the story is, we believe, is that Shorty went into the only bathroom that there was down in the basement to use the bathroom. And when he came out, Dave ambushed him from behind and shot him in the back of the head and killed him.

[16:55] And Dave claimed to the NYPD that it was self-defense, that Shorty was beating him up that morning, Shorty and his crew. Shorty had a guy named Dino Bassiano was in his crew at that time. And Dino later testified in our Gold Club trial up in Atlanta. And he told us this story that they roughed him up a little bit. And when he had a chance, he shot Shorty coming out of the bathroom. And you would think that, okay, you shoot a made guy in the Gambino’s, you’re going to pay for it with your life, right? But because John Gotti Sr. was on trial in 87 and 88 and 89 with these state cases, Sr. Put out the word that don’t touch Dave Fisher. We’ll deal with him later because if we touch him, that’s going to bring more heat on me. That’s going to bring more attention to the fact that we’re shaking bedrocks down to begin with and so on and so on. So just leave him alone. You know, we’ll deal with him later. So with Shorty killed, dead now, Steve Kaplan gets assigned to Bobby Borrello, who you mentioned earlier, in 88.

[18:03] 87, 88 timeframe. And Bobby’s a rising star in the Gambino’s as well. He’s in that class that you just mentioned. He had just been made, but he’s now been assigned to be John Gotti senior’s driver and his bodyguard. He held that position there. And so because he, Bobby Borrello was close to John Gotti, that ultimately caused him his life. And I’ll tell you why is because still the other four families had not forgiven John Gotti Sr. For whacking Paul Castellano without permission. So they still held that vendetta against John Gotti. And when it was time to pay that Piper, if you will, their thought was, who am I going to take from the Gambinos that’s going to hurt John Gotti Sr. The most for what he did when he took out Paul Castellano? So they took out his driver. They took out Bobby Borrello. So Bobby was killed coming out of his house and trying to get in his car one morning. And Bobby was Steve Kaplan’s handler. So now Steve’s last two handlers have been whacked, Shorty Muscusio and Bobby Borrello. So then Bobby gets, excuse me, Steve Kaplan gets assigned to John Gotti Jr.

[19:19] All right. So now we’re in the early 90s and he gets assigned to John Gotti Jr. And as we, as you and I talked about earlier in warmups, you don’t end up in John Gotti Jr.’s crew unless you’re a significant moneymaker. Yeah. And that, and of course we knew that Steve was a big moneymaker.

[19:38] All the way back, even in that time frame. And when John Gotti Sr. Goes away, gets convicted by the FBI led case at his in his federal trial in 92.

[19:50] He goes to prison and now the Gambinos need an acting street boss because because the old man is still the boss in prison, but they need an acting street boss. So they bump up the kid and he becomes the acting street boss. And when he becomes the acting street boss, Steve Kaplan can no longer be in his crew because street boss doesn’t run a crew, right? So now Steve Kaplan gets handed over to the third person in that induction’s crew of 1988, and that’s Michael DiLeonardo, known on the streets as Mikey Scars. And he stayed with Mikey Scars from that 92, 93 era, all the way through buying the Gold Club in 94, up to our trial in 2001. And we took both of them to trial together as a team, along with a number of other employees from the Gold Club. So that’s who Steve Kaplan was and is. He started with the mob in the mid 80s and he ran with the at the highest levels.

[20:51] And he knew that he was at the highest levels and he often used that to his advantage. He threw names around, you know, I’m with John, you know, and not many people can call anybody John and the other guy know what you’re talking about. And we have Steve on tape there at scores in New York City when that club was being shut down and the FBI was taping those conversations. We have Steve saying, I’m, Hey, I’m with John. I’ll take care of this, you know, that type of thing. So Steve ran at the highest levels.

[21:25] Interesting. So now you’re, you’re down here at Atlanta and you, you know, I, first thing the bureau is going to do, I think is see, well, we got any informants that are already going in and out of this club, frequented it. Do you start running some surveillances on it? Start trying to find out who’s working there. Can you turn anybody? You need somebody on the inside. You need to find out, you know, the hierarchy inside and, and maybe what start learning, what kind of scams are going down. So tell the guys how you proceeded with this investigation. I mean, you know, you get the paperwork and, and all that kind of stuff, but then you got to hit the streets and, and find out who’s what in the investigation, you know, hours of surveillance, writing down the license numbers out front. I’ve been there doing all that and then going inside and having some drinks and, and just to see who, how people relate to each other. Talk about how that investigation then started going.

[22:17] Yeah, that’s a good question. And we didn’t have a really good strategy to begin with, because like you said, there were a lot of ways to go at it. We didn’t know which one was going to be the most productive. So in the beginning, we we kind of tried them all, if you will, and see where we could gain some traction. But where we gained the most traction was the following two that I’ll tell you

[22:41] about was, hey, look, what’s the number one occupation in a strip club? It’s going to be dancers. It’s going to be strippers. Right.

[22:51] So we made a decision that if we could get the strippers to talk to us, if we could get the dancers to talk to us. And tell us what was going on in the club, that would probably be about as good as information as we could get about the internal workings of the club and the scams that might be going on in the club. So we made an effort to do that. And I’ll tell you more about those in a minute. And then the second thing that kind of fell into our lap was there on a fairly regular basis, there were upper middle-class businessmen that were calling the FBI in Atlanta through the, you know, the 1-800 number, if you will, and saying, hey, I went to this club last night in Atlanta and my credit card got ripped. I walked out of there with what I thought was a $5,000 tab. And then American Express called me the next morning and said, no, it’s 25. So we started getting these calls on a regular basis. And we would go out and interview these fellas. And, you know, of course, they’re, they’re really good witnesses. They’re educated college types, businessmen, and they can tell a good story. And we knew if we ever went to trial some way, way down the future, they’d make good witnesses because they have good backgrounds. You know, they’re not criminals, right? That kind of thing. So they’re easy to believe.

[24:12] And they told us some pretty good stories about how they think their credit cards got manipulated and part of the story. And then while they’re telling those stories, we’re learning a little bit about how the club works as well, how the girls are manipulating the credit card. So the customers tell us this story, hey, my credit card got ripped, and here’s how I think it happened. So that’s on one hand, Gary. And then we’re talking to the dancers that we’re able to flip on the other hand, and they’re telling us how the credit cards are getting ripped and we’re marrying the two together. Now we’re getting the dancer’s version and we’re getting the customer’s version and they were very similar and they told the same story. And so we knew that we were on to something when it came to credit cards.

[24:59] And then a lot of those girls also told us about the cash and how it was handled in the club. And we knew there was tax fraud going on. Steve Kaplan wasn’t paying all of his taxes that he should be paying. He’s dealing a lot in cash. Remember, in the late 90s, America’s still dealing a lot in cash. It’s not a credit card exclusive community yet. Yeah. So there was still a lot of cash going on. So we knew we had some tax violations going on there. And what we eventually came to the decision was, what we need to do is get inside the club, conduct a search warrant, grab as many records as we can, figure out what’s going on from looking at those records. And then because there’s so many people in this club that are associated with it from a customer perspective, from an employee perspective, the prosecutor, the AUSA, Art Leach, had made a decision that we’re going to throw all of these people, which turned out to be hundreds, into a grand jury and investigate and conduct a grand jury investigation, which you’re very familiar with.

[26:06] So that’s a long answer to your question, but it really kind of focused on the financial crimes. We discovered other crimes as well when we got into it, prostitution, paying off police officers, obstruction, obstruction all the way back to that murder of Frankie or Anthony Muscusio that I told you about. We charged Steve Kaplan with obstruction because there was one witness to that murder, and Steve took him down to Florida and hid him out so he couldn’t talk to the NYPD. But because of the power of RICO, we could go back and charge Steve with that obstruction even though it didn’t happen in Atlanta. It happened in New York, but it’s all part of the Gambino enterprise.

[26:45] So when we got into the investigation, we started finding these things. But really, it was in the beginning and ultimately at the end. It really was a financial investigation. It boiled down to the money, boiled down to the cash. And we brought the IRS in to help us. And a guy named Bill Selinsky led that charge and they were super happy. Uh effective and we’re glad we did so you didn’t you didn’t have some young fbi agents you could put in there and give them a whole bunch of cash and they could get lap dances and have a party every night hey man i used to have guys that’s all they wanted to do yeah we’re gonna work the strip club boss you know we just need about a hundred bucks and you know we’ll have a merry old time you couldn’t do that well look we we certainly went in the club and we went in you know in a in an undercover capacity, but we were low key and we weren’t spending money. We were just flies on the wall, go in, observe, try and put faces with names, see the layout of the club, see what we could see from just a common perspective. We, you know, we had heard about names and we wanted to put faces with those names and, and so on and so on. But, you know, Gary, as you know, I know what you’re saying because that’s what young agents and young police officers think.

[27:57] But what they don’t know is that one day you’re going to be on a witness stand and a defense and a defense attorney is going to eat your lunch because they’re going to play those tapes that you made to the jury. They’re going to see and hear about you getting lap dances. They’re going to see and hear about you having sexy conversations with these dancers and so forth and they’re going to embarrass you is what they’re going to do in front of the jury so even though we talked about things like that And we certainly went into the club. We stayed away from being customers in that sense. And, you know, trying to engage the girls in prostitution or drug sales or anything like that, because it wasn’t worth it. We knew we could make this case other ways that wouldn’t embarrass us on the witness stand. Yeah. They were smart. You were smart doing that. Cause it’s real. It’s real. That goes back to, that goes back to John Simmons and some of these other guys that I’m, you know, that I was working with, you know, you, you, John Acavelli came up from New York. He had transferred from Atlanta to New York, and John had been on that Gambino squad that convicted the old man in 1992.

[29:02] In fact, he knew Mikey Scars previously because he, John Acavelli, another agent that I worked with, was working the union that Mikey Scars was shaking down, one of the construction unions. So he knew Mikey Scars really well. So that type of experience helped tell young agents like me and the other guys, look, we don’t need to go in this club and start acting like we’re wanting to get laid up in the gold rooms and things like that. That’s not the way to do this.

[29:32] So describe the inside of that club. You mentioned the gold room and these are like a VIP room. They have these different rooms that they’ll go back and you get a private dance with, which costs you a little more money. And so kind of describe how this was laid out. I know it was extremely high-end stuff in there. It was. The gold club was enormous to the tune of somewhere around 15,000 square feet. Wow. So, yeah, it was really big. It had two levels. The upper level lined two walls, and the upper level was the gold rooms, or what’s famously known in the strip club business as the VIP rooms. But they called them the gold rooms. And keep in mind that in Atlanta and in Georgia, but specifically in Atlanta, you can have full alcohol and full nudity, which is a rarity in the strip club business. Yeah. At the time, I don’t know what it is now, but at the time that we were

[30:26] doing this case, only two other states allowed that type of strip club business to go on. And that was Florida and Texas. You know, even up in New York or Las Vegas or out in California, the girls had to wear pasties or you couldn’t sell our art alcohol at the bar. You could only sell beer. It was a give or take. So.

[30:47] You now have, you know, full alcohol, full nudity, and you have these VIP rooms upstairs. And so Steve Kaplan knew that he had a magic formula where I can just charge these guys outrageous amounts of money and they’ll pay it. So they can see this girl get naked in a room upstairs by themselves, whether sex happens or not, they’re going to pay for it because who wouldn’t, right? If you got the money, they’re going to spend it up in these rooms. So Steve charged crazy amounts of money for these gold rooms, starting at a minimum in $1999 when we did the search in 1999, $200 an hour at a minimum.

[31:28] Depending upon the size of the room, it could go up to five hundred dollars an hour to buy a room. You also had to buy a bottle of champagne. The minimum bottle of champagne went for two hundred dollars minimum.

[31:41] And then you had to buy the girl. You had to pay for her hourly wage as well. And that was negotiated with the girl. And that was generally in the one to two hundred dollars an hour range, too. So to get into the least of the attractive gold rooms upstairs with the least amount of time, with the least attractive girl, if you will, was $600 just to get in the door right there. Okay. And that was a bare minimum. So you were going to spend probably at least $1,000 when you walked into a gold room. And all seven of those gold rooms were full all the time, cycling through them, cycling through them, cycling through them every night. It was not uncommon for Steve to make $40,000 to $50,000 on a weekend night. And most of that was coming from gold room businessmen churning those credit cards over or paying cash, either one. So that’s what the gold rooms were. And then, of course, when the celebrities came into town, specifically the athletes, they were the most noteworthy there at the gold club. But there were other, there were movie stars and the like as well. But when the athletes came into town, that was exclusively where they went, was up into the gold rooms and the private rooms and et cetera. So the gold rooms were the, were notorious there at the club, but they were big, big money makers for Steve Kaplan.

[33:00] Interesting. Yeah. When those athletes, they come in with their entourage. Yeah. There’s, there’s a song out there by a singer songwriter talks about this guy said he’s the guy that carries a boombox for Mike Tyson. And he says, hey, Mike, let’s go to the strip club because he knows, you know, Mike will take him to the strip club and, you know, everything will pay for everything. They just start throwing money around and those athletes do that kind of stuff. And movie stars will do. Well, you know, it’s interesting what you’re describing. And here’s what I learned working in Atlanta because I worked strip clubs for almost 10 years. What you’re describing is really a ethnic race difference type of strip clubs. The black strip clubs in atlanta and strip clubs are very segregated for the most part there’s white strip clubs and there’s black strip clubs and then there’s a few that are like the gold club, that are interracial but those are the high-end clubs yeah and but typically are you still with me gary yeah something’s going on here let’s just let’s just stop just a minute and.

[34:09] Start again. All right. Try it again. Start back over about where you were going into the, okay. Okay. You’re good. Yeah. So this Mike Tyson story that you’re telling, that’s very typical in the black strip clubs of America and even in Atlanta where the, the celebrities, the athletes, et cetera, will come in and bring a big entourage and throw money around. That’s not what happened in Steve Claflin’s club. Oh really? Because, because Yeah, he came up with a formula that figured, hey, I can make more money doing it different. And here’s the way it was.

[34:42] His formula was simple. And he learned this through an athlete named Larry Johnson, who played for the Charlotte Hornets and then went to the New York Knicks. But Larry had played college basketball at Nevada, Las Vegas. They won a national championship. He was a very famous athlete, did commercials for Nike called the Grandmama commercials. If you remember those back in the nineties, Larry Johnson came to the club one night, just shortly after Steve Kaplan bought it. And he begged Steve Kaplan to let Steve take a girl home with him, let Larry take a girl home with him. And Steve wouldn’t do it. Steve had just bought the club and Steve was trying to run it kind of a, I don’t want to get in trouble with the cops type of thing. And the easiest way to get in trouble with the cops to start running prostitution. So, so Steve said, no, I’m not letting you bring the, I’m not letting you take the girl home. And someone else that was there at that conversation told us this story later. But then Steve had a change of heart after Larry left. He said, you know what? This is my hook, and here’s the way I’m going to do it. These athletes want to come to this club and hook up with these beautiful women. I’m going to allow them to do it, but I’m not going to allow just the average guy to do it. Here’s the way it’s going to work.

[35:57] The athlete will come, Patrick Ewing, Larry Johnson, the list goes on and on. And I will give them a free gold room and I’ll give them, I’ll pay for the girls to go up there and entertain them. And what’s going to happen is there, those athletes are going to draw in the average Joe, if you will, the, the guy that wants to go to the club to say, Hey, I was at the club last night and guess who was there? Madonna was there. I was at the club last night and guess who was there? George Clooney was there. That’s going He’s going to tell his buddies, and they’re going to tell their buddies, and they’re going to tell their buddies. And now you’ve got hundreds of just average Joes walking through the door because they think they might get to see Dennis Rodman or Patrick Ewing or Madonna or whatever it may be. So Steve came up with this formula that I’m going to allow these celebrities to come up. They don’t have to spend any money. They don’t have to throw money around like Mike Tyson. I’m going to pay for it all because I’m going to make my money back by having four and five hundred guys show up wanting to hang out with a NBA player, that type of thing. Smart. And it was smart. It was very, it worked. Yeah. It was, we, our sources were telling us that it’s, it’s known throughout the city of Atlanta. If you want to hang out and see the jet set and the celebrities of Atlanta, go to the Gold Club.

[37:17] Interesting. So it worked. It gave it a certain legitimacy among polite society, if you will, that guys, people wouldn’t maybe not normally go there would feel okay. It was okay to go there. They wouldn’t feel afraid or threatened or anything where they might, you know, one of these lowered in strip clubs, you know, they might want to go in, but they’re afraid to, but the score, it was old club.

[37:38] You’re right. The lights were bright. There was no dark rooms. There were no shady, you know, things happening. Like in most strip clubs, there weren’t drug deals happening in the corners. This was a very light, bright business with disco balls and loud music. And his philosophy when he first bought the club, Steve Kaplan, was to turn it into a Studio 54 type of atmosphere. And that’s exactly what it was like. But at the same time, he’s paying police officers. He’s ripping people’s credit cards. He’s allowing the athletes to engage in prostitution. And he’s skimming money and taxes and not paying what he should be. So there were plenty of other crimes going on as well. Plus, he was supporting the Gambino family or a big chunk of the Gambino family.

[38:24] We had video. So later in the investigation, before we conducted the search warrant, I was able to put a camera on the front door. The local bank director of security was a retired FBI agent. And we went to him and asked him to use one of his cameras. And he said, sure. We turned this back then. The cameras were four feet long, right? So we turned this long four foot long camera. It looks like a, it looks like a rocket and we turn it and we put it on the front door. We’re shooting probably about a hundred yards away and we put it on the front door and we start seeing everybody that’s coming through and so forth. And it was the who’s who of, you know, Atlanta, you know, seven foot tall basketball players, politicians, police officers in uniform, police officers out of uniform, you name it, just a high-end businessman who owned the local car dealerships or owned the local fast food establishments and those type of things. And that.

[39:26] That that camera proved to be extremely beneficial. Later, the club discovered it because how can you not discover a four foot camera, you know, staring at you across the street? And we have great video of them standing out there in the parking lot, pointing at the camera, even bring one of their police officer friends over. And he points at the camera and they’re all sitting there staring at the camera,

[39:47] trying to figure out what’s going on and so forth. But I wanted to make a point about the camera. You said something a little earlier. What was it you just said to me earlier about the legitimacy you said something else that made me think about cameras gary refresh my memory oh i just talked about the previous question the club was on the surface was legitimate it was a safe place for people to go that in that there weren’t things bad things happened there yeah so yeah yeah i guess that’s what it was yeah i guess that’s what it was is that i was i was going to go to the cameras with that and we had you know we had the parking lot covered with the cameras and then with surveillance and you know you would bring your car up and you would hand it off to the to the one of those guys that park your car the valets.

[40:33] Yeah yeah steve kaplan was such a businessman that he got a percentage of the valet even though he he farmed the valet out to another company yeah he got a percentage of that of course he got a he got a percentage of everybody that walked through the door they paid a fee to get into the club. You pay outrageous amounts of money for the alcohol. You pay outrageous amounts of money to go up in the gold rooms. If you want to take your credit card and turn it into cash so you have something to stick into the girls’ garter belts or pay them in cash, he paid outrageous interest on that. Everything that was able to be turned into a moneymaker at that club was to the utmost steve made nine million dollars at the club legitimately in 1999 making it the most profitable strip club in america 1999 really now did he have like a a crow we call a crow company set up where when the guy’s credit card bill came back it wasn’t to the gold club or scores or some club sound did he have like a real that’s right where john sounded that’s what they usually do So how did he do that? Well, it was called MSB Sports. And what that stood for, no, it was just MSB Inc. I take that back, MSB Inc. And what that stood for was Mona’s Sports Bar.

[42:00] And Mona was Steve Kaplan’s wife. That was her name. So it was Mona’s Sports Bar, MSB Inc. So you’re right. So when you get home as a businessman and your wife goes through the credit cards receipt, She doesn’t see scores or gold gloves. She sees MSB. You’re right. That’s exactly right. Yeah. You know what you’re talking about, Gary. Cumber and Rango. I know I’ve been there. I’ve investigated a few of these things. We had an escort service that I worked real hard on that a mob guy really owned. And that’s what they did. They early in the credit card days. And so they started taking credit cards over the phone, but they had another company name set up so it wouldn’t come back as the escort service.

[42:44] So you mentioned police officers several times. Nope. Gary, I’m sorry. I remember the point I was going to make earlier. Yeah. You talked about, yeah, Steve Kaplan doing all these things. And then you said something like to the effect, then of course, Steve was paying the Gambinos a bunch of money as well. And you’re right. And here’s where I was going with the camera. Is it on that camera on? So the club was not open on Sundays. It was closed on Sundays only. It was open six days a week. It was open about 18 hours a day. They had to close at 4 a.m. and they could open up again at 11 or 6, or excuse me, 11 or 10 the next morning. So it was only closed about six hours a day.

[43:25] But on Sunday mornings, after the week’s worth of money had been made, we called a number of times one of Steve’s closest associates wheeling a suitcase on wheels out of that club at about, I don’t know, let’s say like eight or nine in the morning after the proceeds had been counted out and et cetera. And we let in wheeling that suitcase out and then going and get on a Delta line airline and then taking that money. That’s what was in that suitcase. We’re taking that cash back to New York. And that was, that was a big part of the skim that Steve was kicking to the Gambinos is that mostly about once a week on a Sunday morning, they would pack a suitcase full of money. Now, remember this is pre nine 11. So airline security is completely different for those listening who don’t, who are thinking, how do you get a suitcase with, you know, a hundred thousand dollars in cash on Delta airline?

[44:21] Well, one security was different, but two, Steve Kaplan had corrupted two employees at Delta airlines that allowed him to do this easier to carry this money onto the plane without any undue interference, if you will. So Steve had all his employees.

[44:38] Avenues covered. Yeah, he did. And I tell you, that guy really did. Now you mentioned police officers. That’s a subject near and dear to my heart. And, and so Atlanta’s best I know, they didn’t have what you would call institutional corruption for years and years and years, like some of the big Eastern cities.

[44:57] And so as a, as a department, it doesn’t have the reputation of, of being corrupt from one end to the other, but you know, we’re always going to have individuals. We had them here in Kansas. You’re always going to have individuals. So how did this work with them? But guys, guys that are bent that way, they’ll start showing up at these places. They’ll go in for a drink or whatever, and they’ll make sure that the manager or somebody knows they’re a cop. And then a sharp guy from New York, like Kaplan is any guy that runs one of these kinds of joints knows that, you know, start, you know, comping them drinks and, and start trying to, to, to get them on their side and see how far they can go with it. Is that kind of how it worked there and how extensive was it?

[45:40] Well, you know, I did other cases on other strip clubs and, and I made cases on police officers that pled guilty to corruption. And that’s the way it happened in those other cases, but nothing Steve Kaplan did was normal. Gary, he, he had his own way of doing business. And let me tell you how he corrupted these police officers. The two that we charged and took to trial, Steve Kaplan doesn’t need you unless he can use you, and he knows he can use you. So just like I said earlier, when Steve knew he needed to get money on a Delta airline airplane to fly to New York, he needed a connection within Delta Airlines. You know, from your experience, Gary, what’s the biggest headache for a strip club owner? It’s going to be inspections and permits, right? The vice unit is going to come and make sure all the girls have their permits. They’re all licensed, that you’re following all the rules, the alcohol, et cetera, et cetera. So Steve got him a guy inside the permit unit.

[46:44] A guy named Reginald Burney, who, how they met, we never found out, but he was in that permit unit and he would call Steve and he would warn Steve

[46:55] that, hey, there’s going to be an inspection tonight, be prepared. And in return, he was given pretty much carte blanche in the club. We had testimony at trial that he slept with at least one of the girls, both in the club and would take her home after hours, which was a violation of the rules that he’s supposed to be enforcing as a permits guy. A lot of people may not know this, but.

[47:22] At least then, an employee of a strip club could not leave a strip club with a customer, could not change clothes, get dressed, go to the locker room, get dressed, and walk out of the club with a customer. Because, obviously, it’s prostitution. It will lead to prostitution. So, permits would inspect those type of things. They’d set up vice traps and et cetera. But, yeah, here, Reginald Burney, we had testimony at trial that he’s doing this exact same thing. The other officer that we charged. And at trial, Gary, we had to cut the trial in half because we had 17 defendants. So only eight were on trial the first time. And then we were going to try the nine other in the next trial. So it was eight and nine is the way we cut it up. The second police officer was in the second trial. And his connection to the club was, he was a very senior man in the department. He knew everybody. He knew the city of Atlanta, not like the back of his hand, but more importantly, his wife had worked at the club. She had been a dancer back before Steve had bought the club, and then when Steve bought the club, she became what’s known as the house mom. She ran the locker room for the girls, made sure the scheduling was right, made sure they all had their permits. You know, the managers don’t really get involved with the administrative duties of the girls. A house mom handles all of that.

[48:47] This police officer named Jack Redlinger, his wife was one of the house moms there at the club. There were other house moms as well. She was one of them. So Jack would come to the club to pick up his wife, bring her home, take her home, do that kind of thing. And he became friends with Steve Kaplan. And Jack had this reputation already that was shady. Quite frankly, we had other police officers tell us, oh, everybody knew Jack was shady. And then one thing led to another and Jack became the guy that Steve could call for anything that he needed. I need advice. I need you to come look at that camera that’s pointing at me across the street. That was Jack Redlinger pointing at the camera in uniform. I need you to do an unauthorized escort for my bus full of basketball players on my celebrity golf tournament. Jack would do that for him. Jack would do anything that needed to be done. And what we ended up charging him with was there was a rape allegation that happened at the club in the limousine involving one of the managers, Steve’s close friends, and one of the.

[49:55] Well, Jack obstructed that rape investigation we charged. Jack got in touch with the sex crimes investigator and really talked poorly about the girl. You can’t believe her. She’s a liar. She sleeps around. Don’t listen to her. You know, these type of things. Then he instructed, we had testimony at trial that he instructed the limo driver of that limousine where the rape happened to destroy evidence, get rid of the logbook that shows who’s in the limousine, to lie about his testimony to the sex crimes investigator, things like that. So we charged Jack with that rape obstruction as well. But that’s how Steve got in with those police officers. Who can help him? It wasn’t just dumb luck of a guy coming to the bar like you’re talking about. That’s what other guys, that’s what other strip clubs did. Steve didn’t do it that way. Steve was very strategic about who he wanted to be his partners in crime.

[50:51] Interesting. That’s why he’s a good moneymaker. You know, now let’s get back to Michael DeLeonardo, Mikey Scars. Now, did he come down there or did he just was, he was up in New York. He lived up in New York. Did he just, you know, help get that money and distribute it on the other end? Or did he come down to have a presence at the club very much or how did that work yeah yeah good question so when steve owned his club in miami called club boca it was a very high-end legitimate disco type of nightclub and john gaudy jr would come down to that club and hang out i had a girl tell me one time that she took pictures in the club and she didn’t know who she was taking pictures of and and somebody came and took the camera from her and crushed it and threw it it It was a disposable camera, right? Oh, yeah. Crushed it and threw it away. And and she later learned, oh, that’s John Gotti Jr. over there that I’m taking pictures of and so forth. But but Junior did not like strip clubs. We were told that by multiple witnesses that he never came down to Atlanta to see Steve’s moneymaker in Atlanta. But Mikey’s scars did come down to answer your question. And we never had testimony and we never have reason to believe that Mikey came down because he wanted to, you know, have sex with the girls or anything like that. It was to come down.

[52:07] Remember, Mike’s Mikey’s the ultimate professional, right? He’s your stereotypical wise guy that you would see portrayed in the Don Corleone movies, right? Yes. Coat and tie, polished shoes, legit.

[52:21] So Mike would come down to the club for a couple of reasons. One, I want to see the moneymaker. I want to see how this is happening. I want to make sure that the money that Steve Kaplan is paying to us, I have a real good gut feeling that this is the proper amount based on what I’m seeing come through this club. And, and at the same time, look, this guy’s fabulously wealthy, Steve Kaplan. So if he wants to take me to Atlanta Falcons football game, fine. If he wants to put me up in a gold room just to talk with a girl all night for good company and give me free champagne and that type of thing, I’m all for that too. So scars did come down. I caught him on the video that we were talking about earlier, that camera on the front door, getting in and out of the limo, going to the Atlanta Falcons football game, those type of things. But it wasn’t because he was there to have sex with the girls, quite frankly. He was there to see the moneymaker, make sure the Gambinos were being told the truth about the money that Steve Kaplan was making and so forth, and then take advantage of the spoils at the same time to a certain extent. Yeah. Yeah. You know, I talked to him at length and he didn’t seem like a partier kind of guy. He was more of a serious businessman mobster. He was a mobster, no doubt about it, but he was not a, I didn’t get that vibe from him at all, a party kind of a guy. So let’s say. I would agree with. We never had testimony to the contrary. Yeah.

[53:49] So, you know, this is, we’re kind of coming down to the end here. The girls, let me ask a couple of questions about how the girls work. Now, the girls, if I remember right here, they mainly, they can make a couple of thousand, maybe $2,500 a night. They’d only work a couple of nights a week and make four or five grand sometimes are really good ones. And they were in high demand of other strip clubs and kind of the circuits. There’s kind of a circuit of the higher end strip clubs that these girls would work. And so they got their tips and they had to tip out other employees but did did kaplan seem like the strip club owners here they didn’t take any of the girls money they basically allowed them to work there and then they generate a lot of money how did that work with the girls there wasn’t anybody that didn’t walk into that club whether you’re a customer or employee that didn’t have to pay steve kaplan and ever steve got his money out of everybody here’s the way the girls paid out at the end of the night. First of all, they had to pay to show up to work. So it was called a dance fee. And each girl had to pay, I believe it was $50 a night just to get out on the dance floor in their stilettos and their bikini. $50 right there. So unless they make $50, they’re in the hole. So that’s Steve gets 50. And on some nights they would run almost 100 girls through that club. So do the math. Yeah. 100 times 50. Right. Steve made five thousand dollars just on the girls just to show up for work.

[55:14] And then the way the girls made their money was the primary way they made their money is we call it the funny money in the strip club business or the monopoly money. And Steve had his monopoly money. It was called gold bucks. It’s where a customer could come in and put $10,000 on his credit card. And I would give him $10,000 in fake funny money. And then he could take, and it was in a hundred dollar denominations. And then he could take that funny money and he could give it to the girls at the end of the night as their tips, as their money, as their dance fees. And now the girl would have, like you said earlier, $2,000 in funny money, But how is she going to turn that into U.S. Money, U.S. dollars? She would have to take it to Steve Kaplan at the end of the night or to the club management and do what they call a cash out. And she would take her $2,000, give it to Steve Kaplan, and Steve would get 20% of that to turn it into U.S. currency.

[56:09] But keep this in mind also, Gary, that when that customer put that $10,000 tab on his credit card, Steve got 20% of that too. He charged him an extra 20%. So Steve got 20% from the customer for that 10,000. And then he got 20% of that 2000 that the girl got just in that one transaction right there. So Steve was getting 20% of every dollar that was being spent between a customer and the dancer on a credit card transaction. No, strike that 40% on every credit card transaction that was happening up there in those gold, in those gold rooms. And again, I’m telling you, those guys were spending crazy money up there. It wasn’t uncommon.

[56:51] The customers were okay with spending $5,000 and $10,000 a night. That was not uncommon. Yeah. Yeah. Not uncommon. I know a guy here in Kansas City reasonably well and –, He’d do that. He’s a, he’s a real big bucks lawyer and he’d do that. He’d, he’d spend five grand and just a blink of an eye at a strip club. I was like, dude.

[57:13] Multiply that by 30 or 40 guys a night, seven, six nights a week. Yeah. It’s crazy. It’s crazy. That’s a, that’s been a heck of investigation. So eventually you’re going to have to take this down. Yeah. You’ve been, you started with a grand jury investigation, bringing people in. Know they know the jig is up and they know something’s going on and so you’re slowly but surely gathering all these different statements from people and serving search warrants and then records cepedas and and putting on it had to be a huge huge paper case that you guys put it was after after all the fun of doing the surveillances and following people around and figured out who was who now you got to do that so that how many agents did you end up having working on this.

[57:58] Well we had four fbi guys we had four fbi full-time we had two irs full-time and we had two support employees from the fbi that were assigned to us to assist with records checks and things and that so we had eight working full-time off the top of my head and then we of course we’d have part-timers as well but when we did those searches of course it was all hands on deck you know we had the night that we did the search we did three searches we did one in new York and two in Atlanta. We searched Steve Kaplan’s house in Atlanta. We searched the gold club at 4 AM and we searched his corporate warehouse in New York. And we probably used a hundred plus agents to conduct those searches and do all the, and then at the same time, while we were doing those searches, we had another hundred agents out handing out subpoenas for the grand jury, knocking on doors for the employees that had, that were not at the club or that

[58:52] we had already missed because they had went home before 4 a.m. Or something to that effect. So the night of the searches, it was an all hands on deck, a couple hundred agents running around the city of Atlanta and New York supporting this effort.

[59:05] And we run that grand jury investigation for six months. We have three indictments. We supersede it twice. The original indictment had 97 pages in the indictment. That’s how I think it was. The last indictment was about 120 pages. And that was the one that It finally included Mikey Scars, Michael D. Leonardo. He was not in the original indictment. But as we started flipping people and we started getting more cooperation, we were able to put more and more things together. And then we get ready for trial in April, May of 2001. It took two years to get from the search in 99 to the trial in 2001. And we go to trial with 17 defendants, eight in the first trial.

[59:51] Did people start making deals at the end did they end up going ahead and copping please we had a number of folks that, that did do what you just said, they, they cooperated. The way we worked the grand jury was this, Gary, is that, look, there’s a good chance that as an employee of that club, you committed a crime. You either slept, you either engaged in prostitution, you ripped somebody’s credit card, or you committed a tax fraud, some form or fashion, but we don’t care because you’re low level and you’re not our target. Our target is Steve Kaplan. So come into the grand jury, get your immunity letter, tell us the truth, and you’ll be fine. And 99% of the employees, mostly girls, did just that. But we brought a lot of guys in as well. We brought a lot of mobsters in. We brought a lot of male employees in, managers. And they did the same thing. Look, I don’t want to get in trouble. I’ll tell you the truth. And they took our deal. But there was a handful of employees that were very loyal to Steve that said, no, I’m lying. Steve never did anything. There was never any sex. There was never any drugs. There was never any credit card fraud. Steve was not in the mob. There’s no police officers. Whatever story they wanted to tell, they were just very loyal to Steve.

[1:01:10] And because of that, we had no choice but to charge them for the crimes that we felt like were significant enough in the club to warrant prosecution. So we had 17 defendants. But we did have probably, I would say, in that close-knit circle, we had probably half a dozen cooperators that flipped once the grand jury and the search warrant became public. One of them was Steve’s closest right-hand man, quite frankly, a guy named Thomas Siganano, who had been in, what’s D.B. Leonardo’s first name there, the guy that got whacked in the Gambinos that Gravano killed. Called him D.B. D.B., yeah. Remember D.B.? D.B.’s crew. Yeah. Yeah, he had been in DB’s crew back in the mid 80s and hooked up with Steve Kaplan and was helping him up in Atlanta and had been in the limo when Steve was driving around with John Gotti Jr. and Mikey Scars. And, you know, he he he got his own attorney and his own attorney turned out to be Ed McDonald. You ma