FBI investigating local strip clubs, sources say

The campaign-donation scandal that jolted Seattle City Hall three years ago has spun into a major FBI investigation of a strip-club operation long headed by Frank Colacurcio Sr., according to law-enforcement officials familiar with the case.

FBI agents are focusing on multiple avenues, including allegations of prostitution, political corruption, illegal monetary transactions and past turf battles in the Seattle strip-club industry, the officials said, speaking on condition of anonymity because the investigation is continuing. The King County Sheriff's Office and the county prosecutor's office also are involved, the officials said.

FBI spokeswoman Robbie Burroughs in Seattle said she could neither confirm nor deny an investigation.

The investigation grew out of the so-called "Strippergate" scandal in 2003, when associates of Colacurcio and his son, Frank Colacurcio Jr., donated thousands of dollars to Seattle City Council candidates Judy Nicastro, Heidi Wills and Jim Compton, who are no longer on the council. The contributions came shortly before the council approved a controversial parking-lot expansion for Rick's, a Lake City strip club operated by Colacurcio Jr.

Law-enforcement sources said agents are looking at alleged attempts to influence public officials.

In addition to Strippergate, the FBI has shown an interest in Shoreline, examining alleged attempts to influence public officials over restrictions put on strip clubs, the sources said.

King County prosecutors criminally charged the Colacurcios and two associates last year with illegally funneling campaign contributions through straw donors during the 2003 City Council election. But the charges were dismissed Feb. 16 by a King County Superior Court judge, who ruled that criminal charges could not be brought under a broad false-reporting law used by prosecutors.

The judge said only civil penalties could be sought. Prosecutors said they would appeal.

The Strippergate case was handled by King County prosecutors, but the FBI quietly launched the much broader investigation in 2003, bringing in a King County sheriff's detective to help, sources said. The sheriff's office had a long history of investigating the Colacurcios, including a confidential 1984 report that outlined Colacurcio Sr.'s criminal history.

FBI agents have questioned a number of people, including some tied to the strip-club operation, possibly to build a racketeering and conspiracy case, the law-enforcement officials said.

Prosecutors could use the federal Racketeer Influenced and Corrupt Organizations Act (RICO), but they must allege at least two individual state or federal crimes, such as bribery or money laundering, to show a pattern of racketeering activity. The statute also allows the government to seize assets.

Colacurcio Sr., 88, and in ailing health, couldn't be reached for comment. He has long denied being involved in organized crime.

Colacurcio Jr., 44, who oversees the family's daily operations, said he had not heard of the investigation when contacted at his Lake City office, Talents West, which also serves as a booking agency for strippers.

"I have no comment," he said.

His attorney, John Wolfe, said, "We have received no notice that there is a new investigation pending. Accordingly, we have no understanding of the focus or the nature of that investigation."

Both Colacurcios have spent time in prison for evading taxes on cash skimmed from strip clubs, stemming from previous federal investigations dating to the 1960s.

Colacurcio Sr. was convicted in 1971 of racketeering and imprisoned for 25 months for bringing illegal bingo cards into Washington state. During that trial, federal prosecutors exposed Colacurcio Sr.'s role in an extensive payoff and extortion system in which Seattle and King County police were paid for tolerating illegal gambling. A nightclub owner testified that he paid Colacurcio $3,000 a month to obtain police protection.

Colacurcio Jr. owns Rick's, Honey's in Snohomish County, Fox's in Tacoma and the property where Sugar's strip club operates in Shoreline.

The officials say investigators are looking into whether prostitution is tied to the clubs, allowing the businesses to generate illegal income.

Steve Miletich: 206-464-3302 or smiletich@seattletimes.com

Peyton Whitely: 206-464-2259 or pwhitely@seattletimes.com