Everett, Wash.
Published: Wednesday, July 1, 2009

Honey's owners indicted by feds

Frank Colacurcio and his son are among those charged in an alleged prostitution racket.

By Diana Hefley
Herald Writer

 SEATTLE -- The owners and operators of four strip clubs, including Honey's near Everett, have been indicted on federal racketeering charges.

Federal investigators allege that Frank Colacurcio along with his son Frank Jr. and four of their business partners promoted prostitution at their Puget Sound-area strip joints. The men knew about rampant prostitution going on inside the clubs but failed to stop dancers from engaging in sex with customers for money, according to the federal indictment, unsealed Tuesday.

The organization instead discouraged the clubs' managers and dancers from reporting any illegal activity and continued to employ dancers who were arrested for prostitution, or caught in sex acts inside the clubs, court documents said.

Colacurcio, now 92, is accused of allowing dancers engaged in prostitution at the clubs to return to work in exchange for having sex with him. His son, 47, also reportedly had sex with dancers from the strip clubs, according to the indictment.

The men are accused of money laundering and mail fraud in connection with the strip clubs. Prosecutors also allege that the alleged criminal organization failed to pay admission taxes to the City of Seattle. Federal authorities plan to ask a judge to order the organization to give up three of the clubs, including Honey's, and other properties plus at least $25 million.

"We think the organization made millions of dollars as a result of illegal activity," U.S. Attorney Jeffrey Sullivan said. "We believe over a period of time hundreds of young women were exploited by these men. Criminal behavior was rampant and unchecked. It was important to stop it."

Along with the Colacurcios also indicted are: David Ebert, 61, of Monroe; Leroy Christiansen, 67, of Seattle; Steven Fueston, 61, of Tacoma; and John Conte, 75, of Bothell. The men are scheduled to be arraigned July 24 in U.S. District Court in Seattle.

The clubs will be allowed to remain open pending the criminal prosecution and forfeiture proceedings, Sullivan said.

The indictment comes about a year after federal agents and police raided Honey's and the other clubs and a judge granted a restraining order that prevented the owners from selling of the clubs and their assets.

The 25-page indictment outlines how the operations worked and who was responsible for what aspects of the businesses, including Rick's in Seattle, Sugar's in Shoreline, Fox's in Tacoma, plus Talents West talent agency and Accurate Bookkeeping Services in Seattle.

"Our trial team has interviewed more than 200 witnesses, reviewed thousands of pages of reports, transcripts of wire taps, and video surveillance of activities at the clubs. We look forward to proving the (racketeering) conspiracy in court," Sullivan said.

The more than four-year investigation used confidential informants and undercover agents and surveillance. A police officer also infiltrated the organization as a club manager, according to court documents.

During the investigation, authorities learned that dancers paid the owners $75 to $130 a night "rent" to work at the clubs. In order to pay off the rent, many dancers allegedly performed sex acts in private VIP areas, court records said. Patrons would buy tokens that were exchanged for sex, prosecutors allege. Dancers would exchange the tokens for payment. The club owners withheld rent and allegedly kept a percentage of the prostitution earnings.

Dancers allegedly told investigators it was impossible to make the club rent payments unless they engaged in prostitution, court records said.

Undercover detectives visited Honey's, Snohomish County's only strip club, about a dozen times since January 2006. The detectives reported that about 40 dancers offered sex for money about 50 different times. Prices ranged from $40 to $200, depending on the act.

The undercover police described rooms littered with condoms and dancers openly engaged in prostitution.

The organization built the VIP rooms, installed condom machines and ATM machines to promote prostitution in the clubs, according to the indictment.

The owners, allegedly to cover their tracks, attempted to make it appear that they didn't tolerate prostitution in the clubs, the indictment said. The organization fired dancers caught in sex acts, only to rehire them at a different club, prosecutors said. The owners also allegedly destroyed records proving that the managers knew about prostitution in the clubs. Prosecutors allege the people who ran the clubs discouraged anyone from talking about the prostitution so they'd be able to deny knowledge of the crimes.

In March 2008, a dancer at Honey's was sent to the organization's business office, Talents West, after she allegedly engaged in prostitution with a customer. She reportedly explained to Frank Colacurcio Jr. what kind of sex act she performed. He allegedly told the dancer she had been "too truthful," and told her "don't be honest with me," according to the indictment. The woman was allowed to return to Honey's.

Over the years Honey's along Highway 99 has been a focus of scrutiny by the police and others.

Controversy grew between the owners, dancers and the County Council more than a decade ago when the county imposed stricter rules for exotic dance clubs. Dancers were banned from touching customers, making lap dances illegal. The law also called for tips to be placed in dancers' hands, not on their bodies or in their clothing.

Sheriff's deputies have raided Honey's and conducted numerous stings, arresting dancers for prostitution. That's where most of the cases have ended.

"All of these cities go in to make sure the dancers are following the laws. They couldn't get to the owners," Sullivan said.

The Colacurcios have been in trouble with the law before. They were implicated in Seattle's "Strippergate" campaign-finance scandal. They were accused of funneling thousands of dollars in illegal contributions through friends, relatives and business partners to the re-election campaigns of three Seattle City Council members.

The contributions came shortly before the council approved a rezone allowing Rick's in Seattle additional parking spaces.

Diana Hefley: 425-339-3463, hefley@heraldnet.com.
© 2009The Daily Herald Co., Everett, WA