GOLD Club owner Steve Kaplan pleads guilty to racketeering in plea deal with prosecutors

Thursday, August 2nd 2001, 12:00 am
By: News On 6

ATLANTA (AP) _ A strip club owner accused of cheating customers and paying dancers to have sex with celebrities pleaded guilty to one count of racketeering Thursday, agreeing to serve a three-to-five-year sentence and pay a $5 million fine.

Steve Kaplan also agreed to give up the Gold Club, putting the federal government at least temporarily in charge of one of the nation's most profitable strip clubs. The plea deal was announced just two days after a key witness began testifying against him.

Kaplan, whose net worth has been estimated near $50 million, will have a formal sentencing hearing later. He had faced 195 years in prison if convicted on all charges.

The court session was continuing. Sources speaking on condition of anonymity had told The Associated Press that at least four of the remaining six defendants would also plead guilty.

Kaplan and the others were charged with obstruction, credit card fraud, loan sharking, prostitution and other charges. Prosecutors said Kaplan funneled profits to the Gambino crime family.

One charge of racketeering has a maximum sentence of 20 years, but the plea agreement called for three to five years for Kaplan, who did not make a statement after the agreement was announced.

The 14-week trial was halted Wednesday as lawyers discussed the plea bargains.

The break in the trial came the day after former club manager Jeff Johnson began testifying. He was originally named in the indictment against Kaplan but recently began cooperating with the government.

Johnson testified that he saw Kaplan direct three strippers who performed sex acts on pro football star Terrell Davis and a friend. Kaplan then paid each of the women $200, he said. Johnson had been scheduled to be back on the stand Wednesday.

Witnesses have described Kaplan as a starstruck profiteer who felt that having celebrities in the club would raise its profile and help business.

NBA star Patrick Ewing and Atlanta Braves outfielder Andruw Jones testified about receiving sexual favors from dancers. Each athlete said he did not pay the strippers, but other witnesses testified that Kaplan paid the women.

Some customers have testified that they were unfairly charged exorbitant amounts on their credit cards after spending time in the club's VIP rooms.

Defense attorneys said the sex with celebrities was consensual and that many of the customers signed credit card receipts and only challenged the charges later because they were embarrassed about spending so much at the club.