RCI Hospitality Holdings’ CEO Eric Langan and CFO Bradley Chhay have been removed from daily management. The company’s board has appointed interim leaders after criminal charges were revealed in New York. The charges accuse company executives of tax fraud and bribery. The interim leaders will manage the company while the legal case continues.
Board names interim CEO and CFO
RCI’s board has tapped Travis Reese as interim president and chief executive and Albert Molina as interim chief financial officer, according to a company press release from Business Wire. The company says Langan and Chhay are stepping back from their day to day roles but will stay on the payroll to advise subsidiaries during the transition. The board has not set a timetable for how long the interim setup will last.
Indictment accuses decade long bribery, $8M in unpaid taxes
The leadership shuffle follows a 79 count indictment unsealed in September that names RCI, five executives and three Manhattan clubs. Prosecutors accuse them of criminal tax fraud, bribery and conspiracy, alleging they bribed a New York Department of Taxation and Finance auditor to secure favorable audit results and to dodge more than $8 million in sales taxes between 2010 and 2024, as reported by the Office of the New York Attorney General.
The Attorney General’s filing describes alleged perks that included complimentary multi day Florida trips, pricey private dances and falsified club records tied to an in house currency called “Dance Dollars.” "RCI's executives shamelessly used their strip clubs to bribe their way out of paying millions of dollars in taxes," Attorney General Letitia James said in the office’s release.
Company pushes back
RCI has denied the accusations. Company lawyer Daniel J. Horwitz said, "We remind everybody that these indictments contain only allegations, which we believe are baseless," and said the company plans to fight the charges. The Houston Chronicle also noted that RCI had already disclosed the Attorney General’s investigation in its SEC filings, so the probe was not completely unexpected by investors.
Public filings list Langan’s 2024 annual salary at $1.7 million and Chhay’s at $600,000, figures spelled out in the company’s proxy statement filed with the Securities and Exchange Commission. RCI’s SEC filing details those pay packages along with recent employment agreements.
Wall Street did not shrug off the indictment. Shares dropped roughly 16 percent on the initial news, as noted by Reuters. A securities class action has already been filed, alleging the company misled investors about its legal and accounting risks, according to a plaintiffs’ firm press release from Hagens Berman.
Legal snapshot
The criminal case carries serious potential prison time if prosecutors prevail. As Reuters reported, Langan and one co defendant face top counts that carry a maximum 25 year prison term, while the top bribery counts carry shorter maximums. For now, the allegations remain unproven in court and all defendants are presumed innocent unless and until they are convicted.
What to watch in Houston
RCI operates dozens of clubs and restaurants across the country and keeps its corporate base in Houston. Its New York venues, including Rick’s Cabaret and Vivid, are specifically called out in the indictment. Local managers and staff at RCI properties will be watching closely for any operational changes as the litigation plays out and as interim leadership settles in.
In its public statement, the company framed the board’s appointments as a way to keep business running smoothly while legal issues swirl. Langan and Chhay will continue in advisory roles while Reese and Molina handle daily operations. Court proceedings in New York are expected to move ahead as prosecutors and defense lawyers prepare for upcoming hearings.
