Detroit — Alan Markovitz, the Detroit strip club kingpin and reality show star known as the “Topless Prophet,” is expected to plead guilty to a federal crime involving lies told to FBI and Internal Revenue Service agents, after a career that has placed him in the figurative, and literal, crosshairs of investigators, rogue cops and ruffians.
A pair of federal criminal cases against the 68-year-old former Grosse Pointe Farms resident and a former business partner mark a new milestone in the sordid, colorful career of a businessman who built an empire of topless bars stretching from Detroit to Philadelphia and Florida while periodically drawing the attention of federal, state and local investigators, including probes into alleged illegal lap dance violations. Markovitz’s clubs have included The Booby Trap, Trumpps and Tycoon’s, The Flight Club near Detroit Metropolitan Airport, The Penthouse Clubs in Detroit and Philadelphia and The Coliseum, billed as the largest topless club in the Midwest.
Markovitz is accused of helping former business partner Ron Szolack lie to federal agents during a bank fraud investigation into the short sales of luxury homes. Szolack, 55, of Lighthouse Point, Fla., has pleaded guilty, Markovitz is expected to plead guilty and both face up to five years in federal prison, according to federal court filings. Markovitz was scheduled to plead guilty Feb. 23 in Detroit, but the hearing was canceled due to inclement weather and will be rescheduled.
The court records and interviews chronicle an investigation by FBI and Internal Revenue Service agents involving homes in some of Metro Detroit’s most affluent communities. The story includes a pile of cash seized by investigators, a cameo by a Detroit Red Wings legend, and a strip club mogul so brash his Florida mansion has a stiletto-shaped bathtub and who decorated his Michigan mansion with a $7,000 statue of a middle finger aimed at his ex-wife next door.
“He has been a subject of FBI scrutiny for a long period of time,” said Keith Corbett, a Birmingham criminal defense lawyer and former federal prosecutor who was chief of the Organized Crime Strike Force in Detroit. “Part of that is the business he is involved in is one that tends to give rise to a number of other potential crimes.”
Markovitz has led a charmed and occasionally bullet-riddled life.
In 1983, Markovitz was shot in the parking lot of Booby Trap by a dancer he had fired earlier.
In a Detroit News special report called “Skin Business” more than 30 years ago, Markovitz said he reaped about $180,000 a week at his three clubs. He said businessmen were frequent patrons and Booby Trap was a regular stop for professional athletes, including former Detroit Tigers Kirk Gibson and Dave Rozema.
“I can’t tell you how many guys tell me, ‘Alan, because of your places, I’ve closed so many deals,'” Markovitz told The News at the time.
Hitmen and a stray bullet
In 1991, his partner, Frederick Giordano, was accused of hiring a hitman to kill Markovitz. Prosecutors said Giordano hired Sterling Heights resident Dean Thomas Tilotti to kill the strip club mogul; Tilotti subcontracted the job to a Massachusetts man for $12,000.
The plot unraveled after the Massachusetts man contacted FBI agents. Tilotti was sentenced to four years and was supposed to be the star witness during Giordano’s federal trial. But on the stand, Tilotti refused to testify, the judge declared a mistrial and prosecutors dropped charges against Giordano.
In 1997, an off-duty Inkster police officer was kicked out of the 747 Lounge on Michigan Avenue in Inkster after fighting with a dancer. The officer fired his service revolver and the bullet struck Markovitz in the face.
“When I characterize taking the bullet with getting hit in the head with a baseball bat, it’s because I was stunned and in shock from the sudden impact,” Markovitz wrote in his autobiography. “It didn’t quite register when my parking valet said that my face looked like hamburger, either.”
In 2014, Markovitz starred in the Cinemax reality show “Topless Prophet” that chronicled the behind-the-scenes life at his area strip clubs.
In 2019, city and police officials announced that they had shuttered the Penthouse strip club in Detroit for a year because strippers had solicited undercover cops for sex.
According to his website, Markovitz’s club portfolio includes The Coliseum, The Flight Club in Inkster and The Penthouse Club in Philadelphia.
A case built around a short sale
The investigation started more than five years ago and focused on Markovitz’s real estate portfolio, which includes homes in Metro Detroit and a $13.4 million mansion in Jupiter, Fla.
In March 2018, FBI and IRS agents were probing bank fraud allegations surrounding a short sale involving Szolack and Markovitz.
The short sale happened in January 2010, according to federal court records.
At the time, Szolack was living in a waterfront home in Harrison Township that he had bought in July 2005, according to property records. The four-bedroom, seven-bath home spans 7,598 square feet, features a 55-foot enclosed boat house and overlooks Black Creek.
Property records show the home was sold to Markovitz for $568,250 in early 2010. Szolack remained in the house, paying $1,000 a month in rent.
At the time of the short sale, Szolack was experiencing financial problems. He filed Chapter 7 bankruptcy in June 2010, listing more than $541,000 in liabilities and $44,501 in assets.
In 2011, one year after the home was sold to Markovitz, Szolack got his house back. The strip club kingpin sold the property back to Szolack for $500,000, property records show.
Federal agents questioned Szolack about the short sale in March 2018.
Szolack falsely said a real estate agent told him “the proposed transaction was completely legal,” according to federal court records. Szolack also claimed he told the real estate agent about plans to have Markovitz transfer the property back “after a certain period of time.”
The real estate agent said “so long as the short sale was not to a family member, their proposal was completely legal,” the court record reads.
“In fact, the real estate agent offered no such advice,” according to a plea agreement filed last month in federal court.
“Rather, Szolack and Markovitz discussed what Szolack would say to agents at the time of the March 13, 2018, interview, and agreed that he would falsely ‘blame’ the real estate agent for giving them bad advice about the legality of the short sale (the same real estate agent was involved in the other short sales under investigation),” according to the plea agreement.
‘Unfortunate isolated incident’
In January, Szolack was charged with making a false statement to FBI and IRS agents. He pleaded guilty Feb. 1 to a crime that could send him to prison for up to five years but advisory guidelines call for no more than a six-month sentence.
“This is an unfortunate isolated incident. Mr. Szolack has been a hard-working businessman his whole life, and he’s made numerous contributions to educational and charitable institutions in and around the Detroit area,” his lawyer, Brian Legghio, told The News. “He has acknowledged he wasn’t completely truthful when he first spoke to the FBI but has since made a complete, truthful statement to them.”
Szolack, meanwhile, owned the Harrison Township home until November 2014. That is when he sold it for $1.4 million. The buyer: Dino Ciccarelli, the retired Detroit Red Wings player and member of the Hockey Hall of Fame. Ciccarelli is trying to sell the home for $3.45 million.
On Jan. 27, prosecutors charged Markovitz with helping Szolack make a false statement to federal agents.
Markovitz was charged in a criminal information, a type of charge that indicates he is expected to plead guilty. Like the case against Szolack, the felony carries a maximum five-year prison sentence.
“Mr. Markovitz has worked his entire life in the business world, and the last time I checked it is not a crime to be a colorful person,” his lawyer, Walter Piszczatowski, said in a statement to The News. “For the last decades, Mr. Markovitz has continued to work hard and manage his businesses. He is looking forward to putting this entire matter in his rearview mirror, where it belongs.”
More bank fraud details released
Late last month, federal prosecutors revealed that Fifth Third Bank officials had frozen almost $1.3 million during the investigation after being served with an FBI search warrant.
The money is linked to bank fraud, prosecutors said, according to an asset forfeiture case filed in federal court.
Markovitz is not identified by name in the forfeiture case. Instead, it refers to a “short seller” who bought property on Old Orchard Trail overlooking Orchard Lake on Sept. 28, 2007. The street name and sales date match that of a 7,200-square-foot home that Markovitz bought on Sept. 28, 2007, in West Bloomfield Township.
Prosecutors say the “short seller” obtained a $2.7 million mortgage on the property on Sept. 28, 2007. Oakland County property records indicate Markovitz bought the home for $3.6 million.
In March 2010, the “short seller” asked JPMorgan Chase Bank officials for permission to conduct a short sale. The request included an affidavit, signed under penalty of perjury, that the seller did not have enough money for the mortgage payment and living expenses.
Two months later, in May, the home was sold via a short sale for $1.6 million, according to the government. Property records identify the seller as Markovitz.
Prosecutors say the short seller-provided money to buy the home. The purchase money came from three cashier’s checks obtained by the short seller by withdrawing money from the seller’s own bank accounts, according to the government.
“As a result of the short sale, Chase cancelled $1,298,202.99 of debt on the mortgage loan for the Old Orchard Trail property,” Assistant U.S. Attorney Adriana Dydell wrote in the forfeiture complaint.
Prosecutors say the property was sold to a nominee. Six months after the short sale, the home was sold for $2.21 million. The title company cut a check for proceeds from the sale.
“The check was endorsed by the nominee and then endorsed by the short seller, who deposited the check into an account in his name,” the prosecutor wrote.
In April 2012, investigators questioned a Chase Bank vice president about the real estate deal.
The banker told FBI investigators that “had Chase known the short seller was buying his own property with cash, Chase would not have approved the short sale,” Dydell wrote.
If he pleads guilty, as expected, Markovitz possibly would face guidelines that call for a sentence of no more than six months in prison.
But prosecutors will have secured a felony conviction.
“It maybe is not the sexiest charge in their arsenal, but it is still a five-year felony and still a worthwhile charge if you have enough evidence,” Corbett said. “Al Capone went to jail for tax evasion, not being a murderer or a bootlegger.
“Sometimes, you take any crime you can get as long as it’s there.”
rsnell@detroitnews.com
Twitter: @robertsnellnews