State Liquor Authority commissioners Thursday yanked the liquor licenses from two local strip clubs after witnesses told authority investigators that the owners, including Rick Snowden, knew of both prostitution and drug dealing at the establishments raided earlier this month by the FBI.
Meeting in emergency session, authority commissioners issued emergency summary suspensions against Rick's Tally-Ho on Genesee Street in Cheektowaga and 24KT Gold on Route 5 in Hamburg.
"This obviously constitutes a severe threat to public health and safety," authority Chairman Dennis Rosen of Buffalo said. "This conduct was repeatedly occurring on the premises; certainly we need to shut it down immediately."
The suspensions forbid either club from selling alcohol, but the SLA action does not actually close either club, just ends their right to sell alcohol. Both strip clubs were still open as of Thursday afternoon, and employees who answered the phone said they were unaware of the suspensions.
The unanimous vote by the three commissioners -- Rosen was in Albany, and commissioners Jeanique Greene and Noreen Healey were in New York City -- came after deputy counsel Lisa M. Bonacci detailed the drug use and sexual activities at both clubs.
Neither club was represented by attorneys at the emergency meeting.
Bonacci said authority investigators interviewed some of the employees with the cooperation of federal authorities who staged the March 2 raid and arrested 27 people, including the managers of both clubs.
Snowden, the owner of Rick's Tally-Ho, has proclaimed his innocence of knowing anything illegal was going on at his strip club. He was mentioned several times in Bonacci's reports.
Quoting former club disc jockey Robert Oliver, one of those charged, she said Oliver told investigators that he had observed a dancer engaged in oral sex with a customer in one of the private rooms.
He also said he regularly found used condoms in the private rooms and said he could frequently hear patrons having sex with dancers from his DJ booth 20 feet away.
"Oliver expressed his concern to licensee Rick Snowden about the dancers having sex in the private rooms, but he continued operating the business in this manner," Bonacci told the commissioners.
Another SLA witness, club manager Joseph "Vegas Joe" Guarino, told investigators that Snowden "permitted the dancers to perform sex acts for money with customers of the premises and that [Snowden] would allow drug use at the premises," Bonacci told the board.
"In fact," she said of Guarino's testimony, "Guarino indicated that sometime in 2009 he fired a dancer for fondling a customer's exposed genitals in a private room but that the licensee, Rick Snowden, directed him to rehire her because her conduct was permitted."
Snowden, reached to comment after the hearing, repeated his contention that he knew nothing of drug use or prostitution at his club.
"It's all baseless, it's all people who have an ax to grind," Snowden said. "These are people who all have been charged."
Snowden, who learned of the hearing from a Buffalo News reporter, said he was contacting his attorney to see what his options were. He declined to comment on whether he would remain open without a liquor license. "Frankly, it's a sad commentary that I have to learn of this from you," he told The News about the suspensions.
Snowden, who moved to Buffalo from Las Vegas in 2004, bought the Miller Mansion on Nottingham Terrace, runs a number of charity events and has considered running for public office.
Guarino and seven of Snowden's dancers were among 27 defendants arrested in the drug raid, Bonacci said, and Oliver, the disc jockey, worked there from December 2007 to March 2008.
In addition, Bonacci said, Gloria Milan, one of the arrested dancers, is married to Jay Vellon, identified by the FBI as the alleged leader of the drug ring.
According to Bonacci, Milan also talked to SLA investigators and said that Vellon once "tipped [club manager] Guarino for arranging a drug transaction for him" and that Guarino lent money to dancers so they could buy drugs at the strip club.
Bonacci said Milan told investigators that she and other dancers "fondled customers' genitals in exchange for money in the private rooms" and that Guarino provided them with condoms before they went into the private rooms with customers.
The SLA board also suspended the license for 24KT Gold, owned by Mark and Christine Whipple. Neither Whipple returned a telephone call to comment.
Bonacci said that Mark Whipple "actively participated in the illegal activity."
Oliver, the former disc jockey at Rick's Tally-Ho, has worked at 24KT Gold since September 2001 and, after a short time spent at Rick's, came back to work at the Hamburg strip club, the SLA lawyer said.
Oliver told investigators that Whipple told him to turn off the cameras in the private rooms "when certain dancers performed sex acts with patrons in exchange for money," the SLA attorney told the board.
"The licensee, Whipple, explained to Oliver that he wanted the cameras turned off at these instances because the other dancers would get upset if they learned of this illicit activity," Bonacci told the board.
"Sex for money was occurring on the premises on a daily basis," Bonacci said, "and Oliver personally observed a dancer fondle a man's exposed genitals in one of the rooms while the camera was on."
"The licensee, Whipple, was aware of such activity and would comment at times on which dancer was having sex with which customer," the lawyer said.
Oliver also told investigators that Whipple was aware of the drug use at the club and, "in fact, a female employee had sold cocaine to the licensee, Mark Whipple."
The SLA also charged Whipple and his wife with submitting a false license application. The building diagram did not show the private rooms or an interior staircase that allowed dancers to go from the dance floor to the private rooms.
"The licensees' active participation in the distribution of drugs and prostitution activity in the premises," the SLA lawyer said of both club owners, "was an egregious abuse of the privilege to hold a license."
SLA spokesman Bill Crowley said both clubs "have a right to an expedited hearing with an administrative law judge. Those findings will be then sent back to the three-member board for a final determination."