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CNN Today

Out of Bounds?

Aired February 24, 2000 - 1:22 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NATALIE ALLEN, CNN ANCHOR: Prosecutors say an Atlanta strip club, popular with pro athletes, has ties to the crime syndicate.

As Sonja Steptoe of CNN/SPORTS ILLUSTRATED reports, that's raising concerns about the possibility of blackmail.

(BEGIN VIDEOTAPE)

SONJA STEPTOE, CNN/SI CORRESPONDENT (voice-over): For years, athletes from the NBA, NFL and Major League Baseball have flocked to this upscale Atlanta strip club, enticed by what they considered harmless diversions, such as nude dancing and free-flowing alcohol.

STEVE SADOW, GOLD CLUB ATTORNEY: The Gold Club is the number-one adult entertainment club in Atlanta. There are those that would say that it's the number-one adult entertainment club in the United States.

STEPTOE: But, according to a 97-page federal indictment, The Gold Club is more than just a place to unwind. Prosecutors in Atlanta charge that the club's owner Steven Kaplan has strong ties to organized crime. And that, under his supervision, the club has been a haven for criminal activities, including racketeering, money laundering, loan sharking and prostitution.

RICHARD DEANE, U.S. ATTORNEY: In exchange for protection payments, Kaplan received favors from the Gambino crime family and protection for his nightclub operation.

STEPTOE: Kaplan has pleaded not guilty to the charges and is awaiting trial. And, while no athlete has been charged in The Gold Club indictment. Steve Sadow, the club's lawyer, says that wining and dining athletes has been a key part of The Gold Club's marketing strategy.

SADOW: The more individuals that they can bring into the club, celebrities. athletes, people of good stature in their community, the better it is for the club.

THOMAS BUSH, FBI SPECIAL AGENT: I think this just enhanced the reputation of The Gold Club and led to, probably, pulling in other customers because of the celebrity types, the professional athletes that frequented that establishment. STEPTOE: Indeed, financial records of The Gold Club, reviewed by CNN/SPORTS ILLUSTRATED, show that, between 1997 and 1999, dozens of professional athletes were provided with free drinks there. For some, the tab was less than $100. For others, the total ran to well over $1,000.

The list reads like a who's who of the sports world. Charles Oakley, Patrick Ewing, Dennis Rodman and Dikembe Mutombo of the NBA ran up some of the biggest tabs.

Rodman, Mutombo and Ewing declined comment. Oakley told "The Toronto World & Mail," quote: "If I want to go there again, I will go there again."

Others receiving free drinks included NFL's Terrell Davis and Atlanta Braves players, Chipper Jones and Andruw Jones. Neither Davis nor Chipper Jones would comment. Scott Boras, the agent for Andruw Jones, would neither confirm nor deny that his client had visited The Gold Club. Boras also said that Jones' name on a comp slip doesn't necessarily mean he was there.

SADOW: There are comp slips for athletes, there are comp slips for law enforcement, there are comp slips for other people of notoriety, there are comp slips for big spenders. It's like any other business; you try to take care of your best customers.

STEPTOE: There is nothing illegal about accepting free drinks at a nightclub. But the indictment also alleges that The Gold Club paid for nude dancers to have sexual relations with professional athletes, celebrities and other customers, both inside the club and at other locations.

The indictment doesn't mention by name any athlete allegedly to have been provided with sex. But it does charge that, in April or May of 1997, Kaplan arranged for dancers from the club to travel to Charleston, South Carolina where they allegedly performed a lesbian sex show and had sex with members of a professional basketball team.

At the time specified in the indictment, the New York Knicks were in Charleston, preparing for the NBA play-offs.

DEANE: In sum, the indictment charges that Kaplan and others operated The Gold Club as part of a criminal enterprise. And that, in doing so, the defendants engaged in prostitution, which involved interstate means.

SADOW: Every single person has testified from the club that we are aware of, employees, entertainers, has told them that they were never paid for sex. If sex occurred, whether it be oral sex or otherwise, in any of the Gold rooms, it was purely consensual. It was done because the girl wanted to do it. And it was done without the knowledge of The Gold Club.

STEPTOE: The Gold Club case crystallizes the worst fears of officials in every pro sports league. The NBA and the Knicks front office declined to comment. In a statement to CNN/SPORTS ILLUSTRATED, the NFL Commissioner's Office said that the league was monitoring the case. But Major League Baseball's director of security, Kevin Hallinan, and others say organized crime is the constant enemy of professional sports.

KEVIN HALLINAN, DIRECTOR OF SECURITY, MLB: It starts off as a handshake and ends up as bear hug that you can't get out of.

ALAN HERMAN, NFL AGENT: Giving freebies and free gifts can be turned around to where they can be taken advantage of.

MICHAEL FRANZESE, FMR. ORGANIZED CRIME "CAPTAIN": The club environment is fertile ground for organized crime people. I mean, you catch people at their weakness in that environment, and their weakest condition. So, yes, you can exploit an athlete through sex, and through booze, and through drugs.

STEPTOE: Michael Franzese was a captain in the Columbo organized crime family during the 1970s and '80s. Known as the "Yuppy Don," he helped run the family's gambling operations. In 1986, he was sentenced to 10 years in prison for racketeering. He has since left the underworld and now often lectures athletes about the tactics organized crime uses in an effort to manipulate them.

FRANZESE: Typically, you would have an athlete in a club and provide him with those services that you talked about and then getting them involved in a situation where you can have them compromise a game. You know, you tell them straight out: You know, we want this kind of money to be made and we want you to do this in that game, you know, we want you to miss a basket, we want you to not play well, we want you to tell us what's going on in the locker room.

STEPTOE: Franzese knows what he's talking about. In the mid 1980s, he was the money and the muscle behind sports agent Norby Walters and Lloyd Bloom's highly publicized signing of college football players to representation contracts while they were still in school. Franzese testified in court that the sole purpose of his mob family's involvement in Walters and Blooms' agent business was to acquire stakes in pro athletes, so that organized crime could exert influence in the NFL.

(on camera): Franzese believes that nowadays multi-million dollar pro contracts make most athletes immune to mob pressure to fix games. But, he says, that doesn't mean players are completely immune from exploitation by organized crime.

FRANZESE: Nothing more would be pleasing to them to see an athlete in a compromising position, take a picture or get the girl that he might have been with, and say: Hey, she knows everything you're doing, and we're going to tell your wife, hand over, you know, $100,000, $50,000, whatever the number might be.

And what is that athlete going to do? I mean, not only it will get to his wife, I mean, it can become public and, you know, he's opening himself up to a big problem. HALLIMAN: Well, any time you have organized crime in any area, they live to gamble. That's the life blood of organized crime, the edge. And that piece of information about a player's drinking habits, his sexual involvement, the complications, it could be, you know, if there is family involved. It just becomes a much more involved situation.

STEPTOE (voice-over): Federal prosecutors have told CNN/SPORTS ILLUSTRATED that there is no evidence that Kaplan or any of his employees tried to blackmail athletes. But, if the charges in the indictment are true, the potential for blackmail was there.

HERMAN: A lot of players listen, and a lot of players take note. And other players are risk takers, and they feel: Hey, I am going to live my life any way they want and, you know, you are not going to tell me what to do.

FRANZESE: What I try to tell them is this: You guys may be at the top of your game when you are shooting a basket or you are throwing a pass or you are, you know, up at bat. But, when you are in a situation where organized crime could get involved, you guys are in the minor leagues. A pro ball player is really no match for an organized crime figure. I mean, they're in the business of crime. They're in the business to make that guy look bad to compromise that guy to put him in a bad situation. And a ball player is normally no match.

STEPTOE (on-camera): While no athletes are named in The Gold Club indictment, if the case goes to trial, some well-known sports figures who patronize the club might be forced to testify about their sexual escapades, revelations that could tarnish reputations, damage careers and even ruin lives.

In Atlanta, I'm Sonia Steptoe.

(END VIDEOTAPE)

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