Despite the serious nature of the charge he faces, strip club manager Manny Varagiannis, of Olympic Gardens, seemed remarkably nonchalant during his brief appearance before federal magistrate Carl Hoffman last week. The banter back and forth between the judge and Varagiannis’ two attorneys was genial as they made it clear to the court that their client understood the proceedings, in spite of his thick Greek accent.
Varagiannis is that rarest of defendants in the federal system, an escort-service operator. See, very few owners of outcall “entertainment” companies get hauled into court for running strings of hookers. That’s what most of the outcall companies allegedly do, as everyone knows. They supply hookers to horny tourists, girls direct to your hotel room. Over the years, cagey owners have called the girls escorts, then dancers, then entertainers, but no one’s kidding themselves about what they are. The randy conventioneers or straying husbands who dial the outcall outfits are not interested in having a woman come to their hotel room to perform a fox trot or funky chicken.
Manny is not listed on any paperwork as the actual owner of Midnight Entertainers, but lawmen say there is no question the company belongs to Varagiannis and his wife, Amy. And while Manny is not specifically charged with pimping, there is little doubt in the minds of lawmen on that score, either. For years, Las Vegas law enforcement has tried to figure out how to get the escort companies under control, especially in recent years, after many owners dropped all pretenses and began brazenly advertising their product in overt ways — using the ubiquitous handbillers and newspaper racks, gigantic billboards, stripper-mobiles, the Internet. It is tough to go anywhere in Las Vegas without seeing the pouty lips and pastie-covered nipples of hookers who are practically begging for the chance to hop on your trouser trout.
We’re not prudes. Las Vegans understand that people come here to have fun, get naked and pursue pleasures that might be forbidden back home. And while the argument could be made that prostitution should be legal in the first place, it isn’t, and even those who think it should be are not comfortable having the sex trade crammed down everyone’s throats, no pun intended. But police haven’t been able to put the tiniest dent in the industry, which now rakes in tens of millions each year. They conduct room stings, bust a few girls, but rarely, if ever, are able to target the owners of the escort companies. The owners pretend they know nothing about what happens in the privacy of hotel rooms, then laugh all the way to the bank. Now, however, someone is tailing them to the bank.
Nearly two years ago, the agent in charge of the Las Vegas IRS office told me and a few other journalists that he was going to go after the escort industry. Paul Camacho said that after meeting with Metro brass and vice officers, he offered to put his tax bloodhounds on the trail of the escort bigwigs. The general plan is one that has worked so well in bringing down the likes of Al Capone, drug lords, even the Watergate conspirators: follow the money. Escort owners can pretend they don’t know what’s going on in those hotel rooms, but if they pocket huge piles of cash beyond what is charged for the simple act of having a girl show up, then they are not being honest.
And that brings us back to Manny. You might wonder why a guy who runs one of the most profitable topless joints in town — the only one with an address on Las Vegas Boulevard — would need to branch out into this tawdry side business, no matter how lucrative it might be. Manny will have a chance to explain that to a federal jury if the case goes to trial. Metro officers and IRS agents put together a pretty damning case against Varagiannis. They allegedly managed to track nearly $2 million in cash deposits he made into different accounts, all of them seemingly structured to avoid IRS reporting requirements. Manny’s company is not one of the biggies in town but still raked in huge sums. It is interesting to me that he is being charged only with one count of “structuring” — nothing else — and that the scheme was laid out in a criminal complaint, rather than be handled by a grand jury. Any idea why?
Also of interest is the overt naming of an important source of information — one Dolores Eliades, a co-owner of Olympic Gardens, along with her father, Pete. It was surprising to see the criminal complaint go into such detail about how Dolores had been helpful in providing information about Manny to investigators. Ms. Eliades apparently spilled the beans because she was disgusted by Manny’s admission that it was a front for prostitution. Putting Dolores’ name in the court document makes it seem as if someone was sending a message that has nothing to do with the criminal charges. I wonder if that message was aimed at her father? Hopefully, we will learn more soon.
A larger message is also being sent, and its intended recipients are no doubt hearing it loud and clear. The IRS and Metro have finally made good on their promise to crack down on outcall companies, hitting the owners in their weakest spot — their wallets. Tonight, a few are probably scrambling to figure out whether anyone might have been watching as they made their own carefully structured bank deposits.
No one will ever wipe out the sex trade in Las Vegas, but if this new assault causes at least some of the escort owners to tone down the raunch, maybe scale back the pain-in-the-ass handbillers who dump tons of wretched refuse onto our sidewalks each year, then that would be a major victory for those of us who live here.
GEORGE KNAPP is a Peabody Award-winning investigative reporter for KLAS Channel 8. Reach him at firstname.lastname@example.org