Strip club owner pleads guilty to cheating on taxes

Times-Herald Newspapers

DEARBORN – The owner of BT’s Executive Club faces up to five years in prison on federal fraud charges.

Nicholas J. Faranso, who also owned Tycoon’s Gentleman’s Entertainment, a topless club in Detroit, pleaded guilty last Wednesday in the U.S. District Court for the Eastern District of Michigan Southern Division to one count of tax fraud.

He was charged in April by the U.S. Department of Justice after an Internal Revenue Service investigation revealed that he had bought a software program called Touch Menu, a point-of-sale system that would allow him to remove a portion of both his clubs’ sales so that they would appear to receive less income than they actually did.

Between 2001 and 2004, investigators said, Faranso used a program purchased from Theodore R. Kramer, a self-employed computer salesman. They also said Faranso ordered some of his managerial employees to set aside $1,000 per day that came from cash receipts.

Faranso also ordered his employees to make payments to the clubs in order to work, investigators said, and directed that “certain expenditures” for the club be paid out of petty cash. He then would take receipts for the purchases, give them to his office managers and tell the managers to issue a check to Faranso that added up to the total cost of the receipts.

The checks then would be recorded as a personal reimbursement, which allowed Faranso to claim the petty cash purchases as business expenses.

Kramer, a co–defendant in the case, agreed to plead guilty in order to receive a lesser sentence.

Faranso’s sentencing is scheduled for July 14.

(Daniel Heraty can be reached at