The pistol-packing owner of a popular Queens strip club has bared everything for the feds, opening his books to prove he’s no boob when it comes to paying taxes. Hit the jump to read the rest of the story.
Funk Flex
Robert Potenza’s testimony in federal court offered a rare glimpse into the inner workings of a jiggle joint – from his $1.5 million salary to the club’s $4.50 cut on every $5 ATM transaction fee.
He says the tax agents who grilled him about the finances of Gallagher’s 2000 in Long Island City were babes in the woods when it came to flesh peddling.
“They didn’t seem like they knew much about my business,” he testified.
The feds are seeking the forfeiture of nearly $900,000 seized from Potenza’s TD Bank and Merrill Lynch accounts.
Government lawyers say he made more than 100 deposits of four-figure sums to avoid federal reporting requirements for transactions over $10,000. That practice is called “structuring” and is a red flag for tax evasion.
In a civil bench trial last week, the strip club king insisted he pays his taxes and said his mammary mecca is just a cash cow.
The club is awash in cash, with typically $400,000 on-hand, some stashed in a broken refrigerator, a fishing tackle box or atop a metal beam.
Dollar bills are the life blood, needed to make change – so Potenza’s “house moms” collect the singles that dancers receive as tips and give back “tattered” $20 bills.
The “good” $20s are stocked in the ATM machine where Gallagher’s takes a $4.50 cut on every $5 transaction fee, Potenza said.
Gallagher’s pulls in about $9,000 in cash a day Sunday through Wednesday and much more Thursday through Saturday.
And Potenza, 61, is no easy mark – he’s a longtime holder of an NYPD permit to carry a handgun, and he fired his weapon at a robber several years ago.
Brooklyn Federal Judge Brian Cogan noted that the feds’ chief witness, the club’s former general manager, claims Potenza pays workers off the books but invoked his Fifth Amendment rights when asked about his own income.
“If the contention is that the dancers are being paid off the books, why didn’t I hear from a dancer?” Cogan wondered.
DN
