Bribery and Tax Fraud Scandal Rock RCI Hospitality Holdings

RCI Hospitality Holdings, along with five executives, faces nearly 80 charges for an alleged 13-year bribery scheme to evade millions in New York sales taxes. The indictment, announced by Attorney General Letitia James, claims bribery of a former tax auditor led to significant tax exemptions.

In a dramatic development, RCI Hospitality Holdings and five of its executives have been indicted for their alleged involvement in a long-term bribery scheme to avoid millions in sales taxes. New York Attorney General Letitia James announced the charges, which include criminal tax fraud, bribery, and conspiracy against RCI and several Manhattan strip clubs.

The company stands accused of offering bribes to a former auditor from New York's Department of Taxation and Finance to gain favorable audit outcomes. This led to evasion of over $8 million in state and city sales tax. Unfavorably impacted, RCI shares fell sharply following the indictment announcement.

Charges were pressed after evidence, including emails and text messages, indicated orchestrated attempts to manipulate audits. Several high-profile clubs, including Rick's Cabaret and Vivid Cabaret, are embroiled in the scandal, raising alarm over corporate governance and accountability.