Letitia James Exposes Multi-Million Strip Club Tax Scandal in Latest Crackdown

Paul Riverbank, 9/17/2025In a troubling display of corporate malfeasance, RCI Hospitality Holdings faces a 79-count indictment for allegedly bribing a New York tax auditor with strip club perks and luxury trips to evade $8 million in taxes. This case exemplifies the ongoing challenge of corporate tax enforcement and regulatory oversight.

Strip Clubs, Tax Fraud, and Corporate Misconduct: A Tale of Modern Corruption

In what could easily be dismissed as sensationalist fiction, the recent indictment of RCI Hospitality Holdings executives reveals a corruption scheme so brazen it challenges our understanding of corporate oversight in modern America. As a longtime observer of corporate governance and regulatory enforcement, I find this case particularly telling of the challenges facing our tax system.

Let me paint you a picture: Imagine a Houston-based adult entertainment giant, operating dozens of venues across the country, allegedly treating a New York state tax auditor to Miami getaways. Not just any trips – we're talking about carefully orchestrated ventures complete with luxury accommodations and thousands in "entertainment expenses." The auditor's price for turning a blind eye? A mere $8 million in avoided sales taxes over 14 years.

What strikes me most isn't just the scheme's audacity – it's the casual nature of the corruption revealed in communications between executives. When RCI president Eric Langan messaged his CFO about "dance dollars" and impending tax troubles, it read less like a desperate plea and more like routine business discussion. This normalization of corruption should worry us all.

The 79-count criminal indictment unveiled by AG Letitia James targets five executives and three Manhattan venues. But let's be clear – this isn't just about adult entertainment venues gaming the system. It's a stark reminder of how vulnerable our tax enforcement mechanisms remain to old-fashioned corruption, even in our digital age.

I've covered numerous corporate scandal stories over the years, but the paper trail here is uniquely damning. When an auditor texts an RCI accountant that "That's the way people do business in this country... Everyone is happy," we're witnessing the raw mechanics of corruption in real time.

While RCI's legal team maintains their innocence – as is their right – this case represents something larger than just another corporate scandal. It's a wake-up call about the state of regulatory oversight in an era where sophisticated financial crimes often go undetected.

The venues – Rick's Cabaret, Vivid Cabaret, and Hoops Cabaret and Sports Bar – remain open for now. But as this publicly traded company faces increasing scrutiny, the broader implications for corporate governance and regulatory enforcement deserve our attention.

In my three decades covering political and corporate affairs, I've learned that the most dangerous corruption isn't always the most sophisticated. Sometimes, it's as simple as a few Miami trips and some private dances – a sobering reminder that human nature hasn't changed much, even if our oversight systems have.

Strip Clubs, Tax Fraud, and Corporate Misconduct: A Tale of Modern CorruptionIn what could easily be dismissed as sensationalist fiction, the recent indictment of RCI Hospitality Holdings executives reveals a corruption scheme so brazen it challenges our understanding of corporate oversight in modern America. As a longtime observer of corporate governance and regulatory enforcement, I find this case particularly telling of the challenges facing our tax system.Let me paint you a picture: Imagine a Houston-based adult entertainment giant, operating dozens of venues across the country, allegedly treating a New York state tax auditor to Miami getaways. Not just any trips – we're talking about carefully orchestrated ventures complete with luxury accommodations and thousands in "entertainment expenses." The auditor's price for turning a blind eye? A mere $8 million in avoided sales taxes over 14 years.What strikes me most isn't just the scheme's audacity – it's the casual nature of the corruption revealed in communications between executives. When RCI president Eric Langan messaged his CFO about "dance dollars" and impending tax troubles, it read less like a desperate plea and more like routine business discussion. This normalization of corruption should worry us all.The 79-count criminal indictment unveiled by AG Letitia James targets five executives and three Manhattan venues. But let's be clear – this isn't just about adult entertainment venues gaming the system. It's a stark reminder of how vulnerable our tax enforcement mechanisms remain to old-fashioned corruption, even in our digital age.I've covered numerous corporate scandal stories over the years, but the paper trail here is uniquely damning. When an auditor texts an RCI accountant that "That's the way people do business in this country... Everyone is happy," we're witnessing the raw mechanics of corruption in real time.While RCI's legal team maintains their innocence – as is their right – this case represents something larger than just another corporate scandal. It's a wake-up call about the state of regulatory oversight in an era where sophisticated financial crimes often go undetected.The venues – Rick's Cabaret, Vivid Cabaret, and Hoops Cabaret and Sports Bar – remain open for now. But as this publicly traded company faces increasing scrutiny, the broader implications for corporate governance and regulatory enforcement deserve our attention.In my three decades covering political and corporate affairs, I've learned that the most dangerous corruption isn't always the most sophisticated. Sometimes, it's as simple as a few Miami trips and some private dances – a sobering reminder that human nature hasn't changed much, even if our oversight systems have.