Topless Club Owner Pleads Guilty in Federal Court

Memphis, TN- Ralph Lunati, 62, of Memphis, pleaded guilty to a two count Information relating to his ownership and operation of the topless nightclubs Platinum Plus, located at 2514 and 2518 Mt. Moriah and Tunica Cabaret, located at 5599 Highway 61, in Memphis announced David Kustoff, United States Attorney for the Western District of Tennessee, Bill Gibbons, District Attorney General for the 30th Judicial District, My Harrison, Special Agent in Charge for the Federal Bureau of Investigation-Memphis Division, and Larry Godwin, Director of the Memphis Police Department.

Count One of the Information charged that Lunati conspired to use facilities in aid of racketeering. According to the Information, dancers at both of the topless clubs regularly engaged in acts of prostitution in violation of Tennessee law.  Both clubs had an automated teller machine (ATM) and allowed customers to utilize credit cards to obtain cash which they used to pay the dancers for the acts of prostitution. Lunati profited from this by charging customers five dollars for each use of the ATM machine and ten percent of the transaction amount for each credit card transaction.  Pursuant to a plea agreement the United States agreed to recommend a sentence of 18 months incarceration to the court.

The plea agreement also provides that Lunati will also forfeit to the United States the real property at 2514 and 2518 Mt. Moriah, where Platinum Plus was operated and his interest in the property at 5599 Highway 61, where Tunica Cabaret was operated. Lunati also agreed to forfeit  $226,721.05   in currency seized when the clubs were raided on December 8, 2006. Count Two of the Information concerns this forfeiture penalty.

Also in related cases, unsealed today were the guilty pleas of John Bernstein, 37, of Lakeland, Tennessee, a manager at Tunica Caberet and long time Lunati employee, and Lunati’s partner in, and a manager of, Tunica Caberet, Jason Youngblood, 31, of Memphis. Bernstein, like Lunati, pleaded guilty in September 2007 to a one count conspiracy to use facilities in interstate commerce in aid of racketeering. Youngblood pleaded guilty in June 2007 to one count of maintaining a drug involved premises at Tunica Cabaret.

"The guilty pleas of Ralph Lunati, Jason Youngblood and John Bernstein demonstrate that law enforcement will vigilantly investigate and prosecute those individuals involved in the promotion, administration and organization of prostitution.  I offer special praise for the outstanding work and leadership of the Memphis Police Department in the success of Operation Last Call, ” said US Attorney David Kustoff.

“As a result of this federal plea, Mr. Lunati will also forfeit all personal property to the state and the state public nuisance action that the D.A.’s Office filed against him will be resolved.  This is a major victory against illegal activities in the adult entertainment industry, and it’s because of the team effort on the part of the federal and state prosecutors and federal and local law enforcement,” said Shelby County District Attorney Bill Gibbons.

“Operations such as ‘Last Call’ will continue.  We’ve found that illegal drug sales often drive other crimes in our community   The success of this investigation is a direct result of three undercover officers and their team leader.   Our Undercover Operations will continue to combat the criminal elements in our community,” said Police Director Larry Godwin. 

These pleas resulted from a long term undercover investigation conducted by officers of the Memphis Police Department Undercover Operations Unit. Officers made drug buys and observed and recorded  acts of prostitution conducted regularly in both clubs. On December 8, 2006 Memphis Police along with agents of the FBI, Internal Revenue Service Criminal Investigation, and the US Marshal’s Service served search warrants at both clubs and served arrest warrants on club workers and others who had been indicted for criminal activity.  Both clubs have been closed since those raids.