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Ex-Gold Club owner gets 16 months

Gold Club
The Gold Club is now in government hands.  

ATLANTA, Georgia (CNN) -- Steve Kaplan, the former owner of the Gold Club, a high-profile strip club here, was sentenced to 16 months in prison Tuesday.

Kaplan pleaded guilty in August to participating in activities involving a pattern of racketeering, failure to report a felony he had observed -- prostitution -- and credit card fraud. He could have been sentenced to up to three years in prison.

The Gold Club was also shut down as part of the deal. Kaplan, 42, lost his equity in the property and paid a $5 million fine -- $1.9 million of it in cash delivered to the FBI in New York and another $300,000 in restitution to fraud victims.

"I made some bad judgments," Kaplan said. "I hurt many feelings and I'm sorry for that."

U.S. District Judge Willis Hunt said he declined to sentence Kaplan to the maximum sentence recommended by the government because his offense, while classified as racketeering, essentially amounted to credit card fraud, overcharging his other customers.


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Hunt said it was his opinion that Kaplan provided big name athletes with Gold Club dancers who performed sexual favors mainly to ingratiate himself with the players so he could be on a first-name basis with them.

He said the government's attempt to show Kaplan's activities were underwritten by New York mobsters was "reasonably unsuccessful."

The judge said his leniency also stemmed from Kaplan's cooperation in helping to clear the case after agreeing to a plea bargain.

Kaplan also must perform 400 hours of community service after he completes his jail term. With time off for good behavior, he could be out of prison in 13 months, the judge said.

Lead prosecutor Art Leach said he was "somewhat" disappointed in the sentence, but "It could have been worse."

In pleading for a shorter jail term, Kaplan recited a litany of good deeds he claimed to have performed, among them funding basketball programs for impoverished kids, helping the homeless at New York's Penn Station and delivering water and pizza to rescue workers and firefighters after the September 11 attack on the World Trade Center.

Earlier, former club employees testified that although Kaplan was "no choirboy" and a tough businessman, he often dug into his own pockets to help co-workers cope with problems such as cancer in the family and abusive relationships.

Kaplan, dressed in a green suit, slumped at the defense table with his head on one hand and seemed to fight back tears.

"He's already been sentenced," said the mother of one former employee, "publicly humiliated and reviled. Please be merciful, he has children."

The last character witness was a Franciscan priest from New York who described Kaplan's work with the poor.

"I thought the judge was very fair. I'm very grateful," Kaplan told reporters as he emerged from the federal courthouse in downtown Atlanta.

Kaplan, who is married with two daughters, said his family has suffered terribly.

He said his older daughter, 14, was taunted by other students at her school in Oyster Bay, New York, who told her, "'Your father is a gangster. Your father is in jail.' I had to go talk to the principal. I had to talk to the teachers."

The government tried to link Kaplan to a New York Mafia family. But Michael "Mikey Scars" DiLeonardo, the only reputed high-ranking member of a crime family who was a defendant in the trial, was acquitted in late August of extortion charges.

A reputed capo in the Gambino organized crime family, he was found not guilty of conspiring to extort $100,000 from a New York strip club as a fee for mob protection.

The jury also acquitted retired Atlanta police officer Reginald Burney, who faced racketeering and corruption charges in connection with the club.

Kaplan is the only one of the 17 original defendants in the case who will serve time in prison. Thirteen others were sentenced to terms of probation.

-- CNN Correspondent Art Harris and Producer Jim Polk contributed to this story.




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