Probe urged after claims against brothel owner surface

TONOPAH — A show cause hearing on the revocation of the license for Angel’s Ladies Brothel in Beatty was postponed by the Nye County Licensing and Liquor Board Tuesday after District Attorney Brian Kunzi said he wanted to study a letter from owner Mack Moore.

A demand letter from Moore’s attorney accuses the new owner of not paying off the promissory note to purchase the property, allowing illegal drug use in the brothel, moving prostitutes across state lines in violation of federal law and letting the property deteriorate.

Nye County Sheriff’s Office Administrative Technician Callie Stark said there were grounds for revoking the license because Moore sold the business and the new owner hasn’t been licensed. She referred to Nye County Code 9.20.200 that prohibits the transfer of brothel licenses.

Moore said he sold the property Sept. 24, 2007 for $1.8 million to Joe Rosenberry, of Oregon City, Ore., who paid $800,000 down and signed a $1 million promissory note to be paid in full by Oct. 1, 2012. He paid aggregate amounts of $543,000 to Moore, but has an unpaid balance of $457,000. Moore said if Rosenberry doesn’t pay the balance, Moore gets the property back. Payments were due of $4,166 per month.

In a demand letter, Moore asks Rosenberry to pay an outstanding $450,000 balance and immediately apply for a brothel license, so there is a smooth separation of Moore from the operation.

A letter from attorney Louis Palazzo, who said he had been retained to represent Moore along with attorney Ross Goodman, to Rosenberry, dated Sept. 27, 2013 states, “reportedly during the entire period (as measured from the time of the original sale to present) you have failed to become licensed to operate the brothel and have instead relied upon Mr. Moore to maintain his privilege license with respect to the operations of the brothel; this is not an obligation that Mr. Moore was required to undertake.”

The letter added Rosenberry abandoned the property after the sale, leaving the entrance and exit doors open, allowing vandalism and animals to wander into the brothel and bungalows. Moore was forced to intervene to safeguard the business.

Palazzo wrote: “Remarkably, following this incident you have demanded rental payments from Mr. Moore notwithstanding the fact that he has continued to express his desire to relinquish the reigns (sic) of the business to you upon presentation of evidence of proper licensing. As you know the sheriff of Nye County will be legally required to close the brothel if there is no licensed operator.”

“Relatedly, we are informed that you have been insistent that Mr. Moore pay for the upkeep of the business while you have continually sought to sabotage, undermine and compromise the operations of the business by the aforementioned conduct and permitting, encouraging or tolerating the introduction and/or use of drugs at the business, as well as removing the highest earning prostitutes from the business and traveling with them across state lines to other locales, only to have them return without having undergone necessary testing as required by law,”Palazzo wrote.

Palazzo’s letter accuses Rosenberry of removing business records and computers, changing locks on the business office, using Moore’s credit cards and threatening bodily injury on him.

“Furthermore, introducing illegal drugs on the property and bringing workers on the property who are using illicit drugs is something that will surely adversely affect the licensing status of the brothel,” Moore’s attorney wrote.

The district attorney told the licensing and liquor board — which includes the five county commissioners and the sheriff — some of the issues Moore raised need further investigation.

“Mr. Moore agrees the best course of action would be to continue this action while allowing me to address some of the issues in Mr. Moore’s letter and I will bring a new action, to be brought before this board,” Kunzi said.

He said it’s hard to come up with a certain date the show cause hearing for revocation will be revisited, but said he could probably get it heard again at the next Tonopah commissioners meeting March 4.

In another matter, Kunzi was given authorization to revise procedures for issuing show cause orders.

“I think it is something we need to have some direction and have some protocol adopted by the board so when something happens we can get through the process more quickly because everyone understands what their roles are,” Kunzi said.

Under current Nye County Code, the sheriff’s department does the investigations and requests the order. The DA suggested once the sheriff’s office investigates, his office completes the documents charging the license holder with violations for the show cause order.

“Charges really have to be very specific and then the license holder is then required to very specifically respond to each one of those allegations almost in a very formal listing in a complaint and answer. I don’t know if we’ve ever followed that very strict procedure,” Kunzi said.

Sheriff Tony DeMeo agreed with the proposed changes. He said very rarely since he has been sheriff, 11 years now, has there been a show cause hearing, maybe two or three times. The last one was for brothel owner Joe Richards. DeMeo said it will ultimately weigh on county commissioners to make the call on revoking licenses and urged them to be careful.

“You’re dealing with a privileged license and if they do commit violations of this ordinance they can be out of business by that hearing. So you got to make sure there’s due process,” DeMeo said.

Kunzi added there’s nothing in Nye County Code to specify how to do a show cause hearing. He said the DA’s office should be presenting the facts of the investigation, presenting evidence and cross-examining witnesses.

The DA said in the past the county has had problems with liquor licensees. Most of the time, the license holders come in, admit their violations and throw themselves at the mercy of the board.

DeMeo added if he gets too involved in an investigation he has to recuse himself from voting on it as a board member.