PORTLAND, Ore. -- Two Portland strip club managers were indicted by a federal grand jury on Wednesday for charges of conspiring to defraud the IRS.
Lawrence George Owen, 73, of La Paz, Mexico, and Gary Bryant, 67, of Estacada, failed to pay $1.5 million in income and payroll taxes from profits made from 11 adult-oriented stores, including eight strip clubs, from January 2006 to June 2010, according to the U.S. Attorney's Office.
Owen was also charged with conspiring to use facilities of interstate commerce to promote illegal acts of prostitution.
In addition to Owen and Bryant, Milwaukie residents Kandace Desmarais, 63, and Gilbert "Mace" Desmarais, 50, were charged with participating in the conspiracy, according to the U.S. Attorney's Office.
The strip clubs, Tommy's, Tommy's Too, the Landing Strip, Dillinger's Pub, the Oh! Zone, Sugar Shack, Sugar Shack Too, and Peek-a-Boos, required dancers to pay a $15 "stage fee" each night they worked. In addition, customers could pay the strip club $60 and the dancer at least $100, often much more, for a 30-minute "private show."
The private shows involved illegal acts of prostitution with money drawn from the strip clubs' ATMs, according to the U.S. Attorney's Office.
The grand jury and U.S. Attorney alleged that the businesses hid more than $5 million in receipts from the IRS, resulting in $1.5 million in unpaid income taxes during the four-year period, by not reporting income from the stage fees and private shows.
They also failed to pay payroll taxes for numerous employees who have no record of working at the strip clubs and were paid in cash, according to the U.S. Attorney's Office.
The charges come after a five-year investigation by the Internal Revenue Service.
