The FBI used the federal Patriot Act to gather evidence last week to build their case against Michael Galardi, the owner of the Cheetah's in Las Vegas and San Diego, as well as the Jaguar’s Gentlemen’s Club in Clark County, Nevada.
Galardi allegedly bribed members of the Las Vegas City Council, Clark County officials and the San Diego City Council to influence their votes on legislation that would have banned lap dancing.
Investigators "used a section of the Patriot Act to get subpoenas for financial documents," said Special Agent Jim Stern, a spokesman for the Las Vegas field office of the FBI, told the Las Vegas Review-Journal. "It was used appropriately by the FBI and was clearly within the legal parameters of the statute."
On October 28th, faxed subpoenas were sent to collect financial information about the key figures in the scandal. That includes Galardi, his lobbyist, former Clark County Commissioner Lance Malone; former Commissioner Erin Kenny; County Commission Chairwoman Mary Kincaid-Chauncey; former County Commission Chairman Dario Herrera; and Las Vegas City Councilman Michael McDonald, who was defeated for re-election in June.
The Patriot Act, passed in the aftermath of the September 11 terrorist attacks, granted the government wide sweeping powers, lowering the standard of “probable cause” the government must prove to be issued a warrant.
The provision used to obtain the information in the Galardi investigation is Section 314, which allows federal investigators to obtain information from any financial institution regarding the accounts of people suspected of being terrorists or laundering money.
"The Patriot Act was designed and was sold to the American people as being necessary to combat terrorism. It clearly was not intended for this," Las Vegas attorney Dominic Gentile said to the Review-Journal. "I'm confident that the citizens of the United States are on my side on this one."
Because use of the Patriot Act in non-terrorism related probes is controversial, local FBI investigators sought approval from Washington before utilizing it.
Before the Patriot Act was passed, the FBI would have obtained their subpoena from the U.S. Attorney's office and must submit evidence such as a sworn affidavit to establish probable cause of a crime.
Federal authorities in San Diego say Galardi paid San Diego city officials to lift a ban on contact between topless dancers and their customers. Malone and three San Diego city councilmen await trial on public corruption charges.
A federal grand jury in Las Vegas also has been hearing evidence regarding allegations of public corruption in Southern Nevada, but prosecutors have announced no indictment in that case.
The Review-Journal reported previously that Galardi had pleaded guilty during secret proceedings before U.S. District Judge James Mahan, but exact charges remain unknown.
As part of the San Diego investigation Galardi is said to have pleaded guilty in September to conspiracy to commit wire fraud, which carries a maximum penalty of five years in prison and a $250,000 fine. He is scheduled to be sentenced in January.
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