August 5, 1993, was not a good day for the Anderson family.
The Andersons have for many years operated topless nightclubs in Kansas. Recently, they tried to set up shop in Arizona with a club in which the dancers would most likely be scantily clad but not topless.
Last Thursday, the Andersons suffered major setbacks in both states.
The Arizona state liquor board refused to grant a rehearing in the matter of a liquor license that Cary Anderson had been denied last March. The license had been refused because the board believed the proposed nightclub's location--on East Washington Street, near Tovrea Castle and other Phoenix landmarks--was inappropriate for adult entertainment. Cary Anderson's lawyer, Jerry Lewkowitz, argued that the club, called Ziegfield's, would feature tastefully clad dancers and upscale surroundings.
While Lewkowitz was making his argument in Phoenix, a judge in Wyandotte County, Kansas, was viewing six hours of videotape that revealed alleged illegal sexual activities at Legs--a nightclub in which 24-year-old Cary Anderson worked this year as assistant manager.
Legs is owned and operated by Cary Anderson's uncle, Vance Anderson. Cary Anderson's father, Jack Anderson, has a significant financial interest in the club. Jack Anderson also owns the building and land that would have housed the Phoenix Ziegfield's.
Meanwhile, Kansas authorities were moving on another front. Late on the evening of August 5, the Kansas Department of Revenue padlocked the doors at Legs, seizing the property and its contents as part of an effort to recover what the state claims to be $1.3 million in unpaid taxes.
According to Wyandotte County District Attorney Nick Tomasic, the videotape made at Legs reveals numerous violations of Kansas law. For example, Tomasic says, "The guy would lay on his back and put paper money in his mouth and the girl [a dancer] would lean down and take the money off with her breasts. Or they'd pull their G-string aside and let the guys put money in and also feel them at the same time."
The judge has since granted an injunction that has closed Legs until a hearing can be held to determine whether the club should be shut down permanently. In announcing his decision, the judge called Legs a "house of prostitution," Tomasic says. The Kansas ruling is significant in Arizona, because last March, Cary Anderson cited his experience at Legs as a qualification for him to operate a nightclub in Phoenix. As a manager at Legs, he was responsible for hiring and firing employees, handling payroll and ordering liquor. "I have to control the club in a perfect manner," he told the Arizona Board of Liquor Licenses and Control.
Because of Arizona liquor chief Howard Adams' unwillingness to investigate the background of Cary Anderson and Legs--or to reveal to the board any concerns that had surfaced regarding the Anderson family and corporate officers of Ziegfield's, Inc.--the liquor board never learned of the licensee's background.
Instead, the board originally denied the Ziegfield's license on the grounds that the club's location was inappropriate. Phoenix City Council had recommended disapproval for the same reason. Several area business owners--including officials at Salt River Project's Papago Park Center--had protested the location.
Adams supported Phoenix in its disapproval, but did little else. He did not formally protest the license on behalf of the liquor department or present any evidence gathered before Adams' arrival (A Fixer Takes Over," July 28). According to documents in the Ziegfield's file at the liquor department, a department protest had been planned under former superintendent Mark Mazzie. The protest was derailed by Adams after he was named liquor czar.
The Ziegfield's file also contains a litany of concerns about the personal qualifications of Cary Anderson and of others who would operate the business. But Adams did not present any of that material to the liquor board during the March hearing.
Neither Cary Anderson nor Jack Anderson was present at last Thursday's Arizona-liquor-board hearing. Neither could be reached for comment.
"It would appear that Ziegfield's, Inc., will not open Ziegfield's," the nightclub's public relations expert, Bob Bradley, said after the hearing. In the past few weeks, Ziegfield's officials had convinced some area business owners to withdraw protests against the club by threatening to establish an alternative business--Bazooka's, an unregulated, 24-hour, all-nude juice bar--if Ziegfield's license was denied.
Bradley says there are no plans "at this point" to proceed with Bazooka's. But he doesn't dismiss the possibility. "That would be a decision that would be up to the owner," he says.
Ziegfield's, Inc., will not try to open a nightclub elsewhere in Arizona, according to Bradley. Instead, he says, the company will focus on sites in Las Vegas and San Diego. Meanwhile, the Ziegfield's building, at 5151 East Washington, is due to be completed this fall. It's no wonder the Andersons are trying to move out of Kansas. The actions against Legs are the latest in a series of attempts by Kansas authorities to shut down clubs operated by members of the Anderson family. In 1987, the Andersons paid $100,000 in liquor fines for the Red Apple Lounge (later called Legs). Other Anderson clubs--Bachelors III and Ziegfield's--were slapped with city zoning and nudity violations.
According to the Kansas City Star, in 1978, Jack Anderson's car was bombed outside the Red Apple Lounge. The entryway of another Anderson club, Bachelors III, was bombed in 1985. Legs was bombed in 1990. The Kansas Ziegfield's, located in Shawnee, closed in 1990; Bachelors III, located in Kansas City, was ordered closed in 1991.
Lawmen raided Legs, also located in Kansas City, in June. Charges included possession of drugs, the patronizing of prostitutes and assorted liquor violations. Authorities also seized the club's payroll and tax documents, which resulted in the $1.3 million back-tax bill and the subsequent seizure of the club.
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Dean Reynoldson, manager of the criminal fraud unit of the Kansas Department of Revenue, says a state audit of Legs' business records revealed "major underreporting." State officials have seized, along with the Legs property, the club's bank accounts and stock. The Andersons have appealed the revenue department's decision; a hearing should be scheduled for sometime this fall.
Wyandotte County D.A. Tomasic says a former FBI technician visited Legs on 25 occasions to compile the six hours of undercover video presented in court last week. Tomasic alleges, "The [Legs] female dancer employees, with the encouragement of and at the direction of the management, perform acts of simulated sexual intercourse, oral sex, masturbation and other sexual acts on and with the patrons."
Tomasic also alleges that Legs dancers are required to pay $25 per shift for the privilege of being an employee, and an additional $20 so they can avoid the club's stage dance and instead do "lap dances," during which a dancer sits on a customer's lap and gyrates against his groin.
There was no hint of such lurid action last March, when Dixie Anderson--Cary Anderson's mother and secretary-treasurer of Ziegfield's, Inc.--testified in favor of the proposed Phoenix operation. She told the Arizona liquor board that Legs was "a very nice club. It's very, very tastefully done. They do have girls that wear costumes--I would say Las Vegas-style costumes. They have entertainment there. . . . I might state that it's a nice enough club that I allowed my son to work there.