Judge extends order in Colacurcio case

A federal judge Thursday extended an order preventing strip-club magnate Frank Colacurcio Sr. and others in his organization from selling their interest in Colacurcio's operation while the government continues its grand-jury probe into allegations of prostitution-based racketeering and money laundering.

U.S. District Judge Ricardo Martinez also refused to turn over to Colacurcio's lawyers information about wiretaps used during the three-year investigation, ruling that a challenge to the legality of that surveillance is premature since no criminal charges have been filed.

Federal prosecutors, in a rare move, acknowledged in court documents the existence of wiretaps and insisted that they were "lawfully conducted, as authorized by court orders ... . "

The government announced that 91-year-old Colacurcio; his son, Frank Colacurcio Jr.; and several business partners have been the targets of a three-year investigation into prostitution, wire fraud, money laundering and racketeering at four strip clubs they have owned and operated for years.

The investigation was revealed two-and-a-half weeks ago when the FBI, Seattle police and the Internal Revenue Service conducted searches of the clubs, the Lake City talent agency that supplies them with dancers and the senior Colacurcio's home.

Simultaneously, prosecutors obtained an unusual — and public — temporary restraining order from Martinez preventing any of the targets from selling their interest in the strip-club properties pending anticipated federal indictments and forfeiture proceedings.

Irwin Schwartz, who represents the senior Colacurcio, argued that the government relied on the affidavits for the surveillance in obtaining the restraining order and that the government was required to turn that information over so the defense could challenge the restraining order.

However, Assistant U.S. Attorney Todd Greenberg argued that the court relied mainly on a search-warrant affidavit that has already been turned over to the defense, and that the documents that justify the electronic surveillance should remain under seal because they weren't a part of the court's consideration.

Martinez — who commented that it was "much to no one's surprise" that wiretaps were used in the investigation — also said he had not considered the wiretap requests when issuing the restraining order.

Martinez denied Schwartz's motion and issued an injunction preventing any of the targets from divesting their holdings in the companies.

Mike Carter: 206-464-3706 or mcarter@seattletimes.com