Strip clubs owe dancers, workers $11 million in stolen wages, Colorado officials say

Two Denver strip clubs are accused of owing 230 dancers and other employees nearly $14 million in stolen wages and penalties, Colorado officials reported.

An investigation by the labor division of the Denver Auditor’s Office found Diamond Cabaret and Rick’s Cabaret used a variety of methods to cheat workers of their rightful pay, according to a Thursday, Feb. 27, news release.

“This is an extraordinary case and unlike any other my office has conducted, due to the exorbitant amount of wages stolen, the strip clubs’ overbearing employee rules, and their refusals to comply with our lawful investigations,” Denver Auditor Timothy M. O’Brien said in the release.

In a statement provided to McClatchy News, attorney Leah VanLandschoot, who represents the two clubs, accused city officials of launching an unwarranted investigation based on political agendas and said the clubs “fully complied with the law.”

She said the clubs, which are both owned by RCI Hospitality Holdings, Inc., will appeal the rulings to the courts.

The two clubs misclassified dancers as being exempt from wage and hour laws despite having near-total control over their schedules and working conditions, the Denver Auditor’s Office said.

They also required dancers to pay up to $85 for a “house fee” and $8 for a “promo fee” before working, the office said.

“Other tipped workers such as bartenders, servers, and barbacks had wages stolen,” the agency said. “Managers routinely took tips for work performed by tipped workers and entertainers, illegally resulting in workers making less than they should.”

The clubs also exercised “staggering levels of control” over employees, requiring them to sign forms for each shift confirming their tips and how they were split, the office said.

Those forms were later destroyed during the investigation, officials said.

Investigators said dancers described how patrons choked or slapped them in violation of club rules without being ejected, the office said.

“By using fear tactics, retaliation, and the normalization of exploitative practices, they hope we stay silent, which reinforces their excessive control,” entertainer Devynn Dewey, who worked at both clubs, said in the release.

“Every entertainer comes from a different background of adversity, simply trying to navigate our human right to survival through our jobs,” said Dewey, whom the city says is owed more than $70,000 in stolen wages and another $140,000 in damages.

But VanLandschoot, representing the two clubs, accused city officials of exceeding their authority and abusing entertainers in the guise of “rescuing” them.

“By imposing arbitrary and capricious legal burdens on businesses and entertainers alike, Denver Labor is not protecting these women; it is silencing them,” she said in the statement. “It is forcing them into a fight they did not choose.”

“We oppose these unlawful takings, and we are and will continue to challenge this overreach in the courts, where the law — not political agendas — must prevail,” VanLandschoot said.

The agency ordered the clubs to pay $11,358,000 in back wages, tips, damages and interest to workers, plus $2.6 million in fines, officials said.

If the payments are not made by March 13, more penalties will be added, according to the release.

“Despite what these clubs tell them, entertainers have the same rights as every other worker in the city,” Denver Labor Executive Director Matthew Fritz-Mauer said in a statement.

This story was originally published February 27, 2025 at 11:23 AM with the headline "Strip clubs owe dancers, workers $11 million in stolen wages, Colorado officials say."