I-Team: Strip Club Owner Takes On Outcall Businesses - 8 News NOW

I-Team: Strip Club Owner Takes On Outcall Businesses

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Dolores Eliades Dolores Eliades
Olympic Garden Olympic Garden
Manny Varagiannis Manny Varagiannis
Pete Eliades Pete Eliades

LAS VEGAS --  A major player in the Las Vegas adult entertainment industry is speaking out about rampant prostitution masquerading as outcall entertainment. Dolores Eliades, whose family name is almost synonymous with adult nightclubs in Las Vegas, is cooperating with the Internal Revenue Service and Metro Police in a probe of alleged money laundering by the owners of the outcall services.

Eliades, who spoke exclusively to the I-Team, said the outcall racket is out of control and is a threat to Las Vegas. She has owned and managed strip clubs for years. Her family has been in the business even longer and she is well aware that sex is part of the Las Vegas image. She's certainly no prude, but thinks the outcall business is a blight with its handbillers, smutty news racks and rolling billboards advertising hookers. She said it could hurt Las Vegas in the long run and that's why she showed up at the office of the IRS one day and spilled a sordid pile of beans about how the outcall business has invaded strip clubs.

Eliades believes she is in danger for cooperating. "I believe so, yes," she said.

Interfere with someone's ability to earn millions of dollars, as Eliades has, and there are bound to be consequences. She said she's already been warned.

"I'd better be careful, my life isn't worth much anymore," she added.

Eliades is a rarity, a woman who has succeeded in the decidedly male world of strip club owners and operators. She's been both manager and part-owner of two of the most successful topless joints in town: Olympic Garden and Sapphires.

Earlier this month, Eliades' name surfaced in a criminal complaint filed in federal court, not as a target but as a voluntary witness against another veteran of the adult scene, Manny Varagiannis, who had been the general manager at Olympic Garden. He was also secretly running another business, police said, an outcall service called Midnight Entertainers. According to the financial crimes task force, that business, like most, if not all outcall services, is a thinly disguised front for prostitution.

The handbillers pushing smutty pamphlets on the Strip and the taxi drivers who accept referral fees all know what the business is. Eliades says her friend and co worker admitted as much.

"He came and told me he was going into the outcall business. We were friends. I asked what it was. He said, 'an escort service,' and I said, 'I think it's prostitution, isn't it?' He said, 'it does take place.'"

Whatever service it provides, Midnight is still up and running, even after Varagiannis' arrest. Call the number and they will still send an entertainer to your hotel room. Lawyers for the defendant noted in court that Manny's name appears nowhere on any ownership documents, but the complaint alleges that he and his wife control the flow of cash.

The IRS and Metro Police were watching as Varagiannis allegedly tried to hide more than $1.8 million in different accounts by making deposits under the $10,000 limit, sometimes several deposits per day into each account.

Eliades said she saw the piles of money with her own eyes.

"He counted money in front of me on several occasions. He told me it was from the evening before, sometimes in excess of $20,000 or $30,000. It was huge, and that was after paying transportation," Eliades said.

By transportation, she means kickbacks to cab and limo drivers, up to $200 per referral. At one point, Eliades said, Varagiannis offered her 30 percent of a new outcall company he planned to open.

"He told me they charge the customer $300 so if you are giving away more than half, where are you making your money? That's what I asked him. He said, 'We're making it on other things,' and I took that to be what it means. Sex?"

When Varagiannis started placing his outcall girls inside the Olympic Garden, which has both liquor and gaming licenses, Eliades said she decided to go to the IRS. Having women openly solicit for prostitution inside the club would be a serious problem.

"I thought it endangered the license of the club and my license even though I'm not there. It's a grave concern to me, so I co-operated," she said.

Eliades says she was offered immunity by the IRS but she declined, in part, because she is also entangled in a vicious legal fight with her father Pete Eliades in federal bankruptcy court.

Manny Varagiannis has been charged with what's called structuring, a form of money laundering. He surrendered his key employee license from the strip club after his arrest.

Eliades thinks the owners of outcall companies should be required to get privileged licenses to give law enforcement more control. We'll have more on that angle in the coming days.

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