Written by Wanda Gomez
Miami, FL – July 11, 2016 –In a colorful 41-page opinion, the 11th Circuit Court of Appeals reversed all counts charging nightclub owner Albert Takhalov with wire fraud and money laundering.
The Government accused Takhalov and other nightclub owners of committing fraud by paying “bar-girls” to invite male patrons into clubs and enticing them to spend thousands of dollars on expensive champagne, without disclosing that they were paid promoters. In a pre-trial motion, Srebnick proposed instructions for both the grand jury and the petit jury to explain that the law did not criminalize such a business practice. Two district judges refused to give the requested instructions. The 11th Circuit overturned the convictions, writing:
Here, the defendants asked the district court to instruct the jury that “[f]ailure to disclose the financial arrangement between the B-girls and the Bar, in and of itself, is not sufficient to convict a defendant of any offense. . . . [T]he defendants asked the district court to tell the jurors that they could convict only if they found that the defendants had schemed to lie about the quality or price of the goods sold to the victims. . . . A court does need to tell a jury that a scheme to trick patrons to come into a bar—without more—is not wire fraud.
Commenting on the 11th Circuit’s decision, Srebnick said, “The court’s decision today should come as a relief to nightclub owners by reassuring them that it is not a crime to pay alluring female promoters to entice men to spend lavishly on champagne — and a disappointment to any male patron who thought that for the price of a bottle of bubbly he was entitled to something more.” As Judge Thapar wrote for the Court: “The wire fraud statute does not enact as federal law the Ninth Commandment given to Moses on Sinai. For [it] forbids only schemes to defraud, not schemes to do other wicked things, e.g., schemes to lie, trick, or otherwise deceive.”
For copies of the briefs and 11th Circuit opinion, click here.