Strip club boss cops plea in rackets trial
ATLANTA, Georgia (CNN) -- Steve Kaplan, owner of a high-profile strip club that catered to celebrity athletes, pleaded guilty Thursday to racketeering involving credit card fraud and prostitution, as part of a deal with the government in which he loses ownership of the club.
Kaplan, 42, pleaded guilty to participating in activities involving a pattern of racketeering, failure to report a felony he had observed -- prostitution -- and credit card fraud. Another charge, which was set aside, alleged he had schemed to defraud Delta Airlines.
Under the agreement, Kaplan will be sentenced to as many as three years in prison and fined $5 million.
Kaplan, who has operated adult clubs in New York City and Boca Raton, Florida, also agreed to forfeit ownership of Atlanta's popular and profitable Gold Club, which becomes federal property until it is sold.
Had Kaplan rejected a deal and been convicted, the federal government could have seized all of Kaplan's assets -- worth a reported $50 million -- and sent him to jail for 20 years.
Sentencing will not happen until the government makes a formal recommendation to U.S. District Judge Willis Hunt, who has presided over the nearly 3-month-old trial as well as the morning-long meetings in his chambers to nail down details of the plea bargain.
Four other defendants were part of the plea deal, including 32-year-old former Gold Club stripper Jacklyn Bush, aka Diva, who pleaded guilty to failure to report interstate prostitution, including sex at the club. She is expected to be spared jail time in favor of probation on the misdemeanor offense.
Sadow said his client agreed to the deal because it would likely spare his codefendants jail time. He said Kaplan wanted to repay their "loyalty and friendship."
"The matter has been resolved because it has assured the group as a whole will not go to jail, which is most important," he said.
U.S. Attorney Richard Deane portrayed the deal as a victory for the government because the defendants would "admit their guilt."
He said defense attorneys had approached prosecutors about a possible plea agreement. "We agreed to talk with them," he said. Sources told CNN the negotiations had been going on for two weeks.
Two other defendants -- a reputed Mafia figure and a former Atlanta police officer charged with accepting bribes to warn Gold Club managers of pending inspections -- declined to accept the plea bargain deal.
The deal also includes all defendants except one who were to be in a similar trial involving the Gold Club.
The trial, which began in May, featured graphic testimony about sexual favors and celebrity athletes at the adult entertainment bar -- sex allegedly paid for by Kaplan to draw big names who would attract big crowds and boost the club's profile.
Prosecutors said the club has ties to organized crime and that Kaplan paid protection money to the Gambino organized crime family.
Basketball star Patrick Ewing and Atlanta Braves player Andruw Jones both testified about having sex with Gold Club dancers who were paid for their services -- Ewing on the club premises and Jones at a nearby hotel. Jones said Kaplan was present when he had intercourse with two women.
When Kaplan was riding high, the Gold Club was made about $20 million a year and was rated as one of the top adult nude entertainment clubs in the country by industry magazines.
As he entered the courthouse Thursday, defense attorney Dwight Thomas said he and former police officer Reginald Burney had not negotiated with prosecutors on a possible plea.
The other defendant rejecting the plea deal, sources said, was Michael DiLeonardo, aka Mikey Scars, an alleged associate of Gambino Mafia family chief John Gotti Jr.
Several of the defendants were pleading guilty to misprision of a felony, or failure to report a crime, the same plea entered by former manager Thomas "Ziggy" Sicignano, who received probation after agreeing to become a government witness.
-- CNN Investigative Correspondent Art Harris contributed to this report.
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