Shares of RCI Hospitality Holdings Inc RICK are trading lower Tuesday afternoon following a 79-count indictment against the company, five of its executives and three of its Manhattan strip clubs. Here’s what investors need to know.
See what is happening with RICK stock here.
What To Know: New York Attorney General Letitia James announced the charges Tuesday afternoon, stemming from an alleged multimillion-dollar tax fraud and bribery scheme.
Prosecutors allege that from 2010 to 2024, RCI executives bribed a New York state tax auditor to evade over $8 million in sales taxes. The bribes allegedly included cash, free trips and entertainment at company-owned clubs, which were then falsely recorded as “promotional” expenses. The company also allegedly failed to pay sales tax on its “Dance Dollars,” an in-house currency.
Among those indicted are CEO Eric Langan and CFO Bradley Chhay. The charges include conspiracy, bribery and criminal tax fraud. The investigation revealed that Langan allegedly personally supervised negotiations with the auditor and approved bribe payments.
What Else: The Office of the Attorney General’s investigation found that the auditor received at least 13 complimentary trips to Florida, where he was given up to $5,000 per day for private dances at RCI clubs.
In addition to the company, five executives and three Manhattan clubs, Rick’s Cabaret, Vivid Cabaret and Hoops Cabaret and Sports Bar, were charged.
Per a Tuesday press release from the Office of the New York State Attorney General, the charges are allegations, and the defendants are presumed innocent unless and until proven guilty in a court of law.
RICK Price Action: According to data from Benzinga Pro, RICK shares closed Tuesday’s session lower by 15.94% to $28.79. The stock has a 52-week high of $61.66 and a 52-week low of $28.00.
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