Core Viewpoint - RCI Hospitality Holdings Inc is facing a 79-count indictment related to an alleged multimillion-dollar tax fraud and bribery scheme involving the company, its executives, and its Manhattan strip clubs [1][4]. Summary by Sections Allegations and Charges - From 2010 to 2024, RCI executives allegedly bribed a New York state tax auditor to evade over $8 million in sales taxes, using cash, free trips, and entertainment at company-owned clubs, falsely recorded as "promotional" expenses [2]. - The company is accused of failing to pay sales tax on its in-house currency, "Dance Dollars" [2]. - Key executives indicted include CEO Eric Langan and CFO Bradley Chhay, facing charges of conspiracy, bribery, and criminal tax fraud [3]. Investigation Findings - The investigation revealed that Langan personally supervised negotiations with the auditor and approved bribe payments [3]. - The auditor reportedly received at least 13 complimentary trips to Florida, with payments of up to $5,000 per day for private dances at RCI clubs [3]. Impact on Stock - Following the indictment news, RICK shares closed down 15.94% at $28.79, with a 52-week high of $61.66 and a low of $28.00 [5].

Core Points - New York Attorney General Letitia James announced the indictment of five top executives from RCI Hospitality Holdings, including CEO Eric Langan, for their involvement in a multi-million-dollar tax fraud and bribery scheme [2][8] - The scheme allegedly involved bribing a New York state auditor with trips and payments to avoid over $8 million in taxes from 2010 to 2024 [5][6] Group 1: Indictment Details - The executives are accused of providing the auditor with 13 complimentary trips to Florida and payments for private dances at RCI-owned strip clubs [3][5] - RCI's controller, Timothy Winata, allegedly traveled to Manhattan multiple times to deliver illegal bribes at RCI's clubs [4][8] - The indictment includes 79 counts of conspiracy, bribery, and criminal tax fraud against the executives and the three Manhattan clubs [8] Group 2: Financial Impact - Following the announcement of the indictment, RCI's shares dropped nearly 17% in late afternoon trading [8] - The alleged tax evasion involved the sale of "Dance Dollars," which customers purchased for private dances at RCI's strip clubs [5][6] Group 3: Company Response - RCI and the individuals involved deny the allegations and plan to defend themselves against what they describe as overreaching charges [9][10] - RCI has previously disclosed the investigation in its SEC filings and maintains a policy of paying all legitimate taxes [10]