We can’t lie, it feels kinda good to see the feds have to come up short.
The feds have been ordered to return nearly $1 million seized from a Queens strip club after a judge cleared the club of civil charges of financial improprieties, the Daily News has learned.
Robert Potenza, the pistol-packing owner of Gallagher’s 2000 in Long Island City, ran afoul of government agents who suspected the strip club king had made more than 100 bank deposits in amounts less than $10,000 in order to avoid federal reporting requirements.
That illegal practice is known as “structuring” and is a tactic used by tax evaders, money launderers and drug dealers.
But Potenza testified at a bench trial in Brooklyn Federal Court last summer that the agents had it all wrong — or at least had no idea how a pleasure palace operates.
Potenza explained how dollar bills are the life-blood of the club; the ATM machines are stocked with “good” $20s while “house moms” make change with tattered $20s. The club draws hundreds of customers daily, spending thousands of dollars on lap dances and private sessions in the “Champagne Room.”
And Judge Brian Cogan, who got a tutorial on the inner-workings of the lap-dance lair, agreed.
For example, Potenza said despite keeping between $300,000 to $400,000 on hand, his theft insurance only covered a loss of up to $2,500 because he trusted the strip club’s alarm system was adequate. He carried small amounts to deposit because he had been robbed before.
“With its Post-It notes and daily sheets, (Gallagher’s 2000) lacks the sophistication one might expect from such a profitable establishment,” Cogan wrote.
“But it is the lack of sophistication and Potenza’s confidence in his alarm system that more readily explains the insurance policy than massive tax evasion that apparently the IRS and the state Department of Labor has not been able to find.”
“A creature of habit and someone who has been robbed, Potenza made regular trips to the bank with an amount he felt comfortable with, usually $8,000.”
Potenza is entitled to recover legal fees and he’s seeking $997,000 from the government — which is about $100,000 more than the seized funds. The judge has yet to rule on the amount.
“He took it as a matter of principal to fight this and was right in doing so,” his lawyer Sean O’Shea said, adding that the money was returned last week.
SMH, there goes the greedy gov’t again. They gonna have to pay a pretty penny for what they put ol’ dude through too.