Pure, Other Vegas Nightclubs Face IRS Investigation

Nightclubs independent of the resorts that host them are being exposed for practices that may result in jailtime for some.

In the world of Las Vegas casinos and resorts, expectations are that every minute detail is controlled. Security is omnipresent, both in person and through the endless array of cameras. Employees are extensively investigated, backgrounds checked, and individuals are rejected for the hint of a shady incident in the past. Every dollar that changes hands has the eyes of the house, the customer, and the IRS unblinkingly watching it.

So it seems the last thing likely to happen on the Strip, with its myriad of possibilities, is the unnoticed presence of huge sums of cash transferring hands, with murky bookeeping failing to account for who is paying, who got paid, and how much. But the owners and operators of some of Vegas' hottest nightclubs have been in exactly that position.

Nightclubs independent of the resorts that host them are being exposed for practices that may result in jailtime for some, and certainly a major overhaul in how the Strip chooses to operate its bar and club scene. Pure Management Group, in particular, is under investigation by the IRS for the movement of large sums of unreported cash.

Pure, which owns and runs several Las Vegas clubs, such as its eponymous location at Caesar's Palace, is being accused of shaking down clientele in a massive forced-tipping scandal. From the minute the doorman overcharges for entry, through hostesses and security demanding upfront  "tips" to perform their duties, to wait staff doubling or tripling the prices for bottle service, cash well beyond the expected, above ground standard is sucked into the club's many pockets.

The influence of club management, many of whom never faced the long looks at their personal histories that casino staff receives, has become extremely powerful. With money exuding from every pore, it becomes no big deal to get fire inspectors to disregard capacities, or even show up as required.

Now the IRS brings its hammer crashing down on the sweet setup. While club personnel made thousands and uper management and owners millions, the arrival of the government watchdogs sounds the end of the party. Resorts don't need the bad publicity of customers who have been accosted for cash, and licensed casinos don't need IRS trouble, even if it is a leased property.

Pure Management and its cohorts have been so greedy, they have killed their own golden goose.