Former NYC Auditor Charged in $8M Strip Club Tax Scheme

A former auditor for New York City has been indicted for allegedly accepting bribes in the form of lap dances in exchange for assisting a strip club chain in evading over $8 million in taxes. Alton Plunkett, who retired from the New York Department of Taxation and Finance, faces multiple charges, including conspiracy, bribe receiving, criminal tax fraud, and falsifying business records. The announcement of his indictment was made by New York Attorney General Letitia James on Tuesday.

The charges stem from Plunkett’s actions between 2010 and 2024, during which he reportedly took bribes from executives at RCI Hospitality Holdings, a publicly traded company that operates over 60 clubs and restaurants across the United States. Five RCI executives were indicted earlier this month on similar charges, including conspiracy and bribery. Plunkett’s name was previously redacted from the earlier indictment.

Details of the Bribery Scheme

According to court filings, Plunkett supervised at least six tax audits of RCI-owned strip clubs in New York County during the 14-year period. In return for favorable treatment during these audits, he allegedly received numerous gifts, including at least 13 complimentary multi-day trips to Florida. The trips included lavish accommodations and private dances valued at up to $5,000 per day at venues owned by RCI, such as Tootsie’s Cabaret in Miami.

The indictment reveals that Plunkett was in close contact with RCI executives, including Timothy Winata, the company’s controller, who provided him with complimentary hotel stays and meals. In a text message dated August 4, 2014, Winata informed Ahmed Anakar, RCI’s director of operations, that “Alton is coming to club tonight. I will have to ‘entertainment’ him.”

Prosecutors allege that RCI’s leadership, including President and CEO Eric Langan and CFO Bradley Chhay, authorized and oversaw the bribery scheme. The executives utilized an in-house currency called “Dance Dollars,” redeemable for entertainment services, which were subject to a sales tax rate of 8.875 percent. However, the club chain allegedly failed to collect or remit over $8 million in sales taxes during the operation of the scheme.

Consequences and Legal Proceedings

The indictment also includes evidence of text messages exchanged among RCI executives discussing strategies to mitigate their tax liabilities. For instance, on April 12, 2018, Langan texted Anakar about needing to address issues related to New York and Dance Dollars, stating, “We are going to be hit by $3 million in sales taxes soon.” Later that year, on October 5, 2018, Winata suggested increasing the price of Dance Dollars to cover impending sales taxes.

To conceal their illegal activities, the executives allegedly falsified business records and misclassified cash payments made to Plunkett as “promotional” expenses. If convicted of criminal tax fraud in the first degree, Plunkett could face a maximum sentence ranging from eight and one-third to 25 years in prison.

Letitia James emphasized the seriousness of the allegations, stating, “Alton Plunkett took numerous bribes to help RCI and its executives cheat New Yorkers and avoid paying their fair share in taxes. We have zero tolerance for public officials using their office for personal gain, and we will ensure all those involved in this bribery scheme are held accountable.”

As this case unfolds, it highlights the critical need for integrity within public office and the ongoing efforts to combat corruption in governmental institutions.