DENVER — Two Denver strip clubs have been ordered to pay $14 million as a result of findings from a Denver Auditor's Office investigation into wage theft.
The Denver Labor division of the auditor's office conducted an investigation into Diamond Cabaret and Rick's Cabaret, which are both owned by RCI's Hospitality Holdings. Investigators found that more than 230 entertainers, bartenders, servers and other workers at both establishments had money stolen from them. Both businesses also used questionable workplace practices, according to Denver Labor.
Diamond Cabaret and Rick's Cabaret must now pay $11.358 million in restitution to the workers and another $2.6 million to the City and County of Denver in fines.
"It's potentially just the tip of the iceberg because this company has withheld records for probably 99% of the entertainers," said Matthew Fritz-Mauer, executive director of Denver Labor.
Devynn Dewey started working at Diamond Cabaret and Rick's Cabaret to pay for school.
"At the end of the day, I really had to make ends meet," she told Denver7.
The long-time employee said being asked for tips by her managers was typical.
Denver Labor's investigation found that Diamond Cabaret and Rick's Cabaret misclassified entertainers — strippers or dancers — as exempt from some worker laws. The misclassification meant the strip clubs were not paying entertainers appropriately for their work.
The businesses also required strippers to pay a "house fee" of up to $85 per shift, according to Denver Labor, and pay an additional $8 "promo fee" before working. Strippers were also expected to perform on stage for three songs and be topless by the end of the second song, Denver Labor said. They also could not leave the stage until the next dancer appeared.
The dancers could be disciplined if they did not comply, Denver Labor found. If a dancer did not show up for their scheduled shift, they were fined $25. Entertainers had to sign in for their shifts using the "Pole Position" app before they could work, in addition to clocking in with a fingerprint scanner through ClubTrax, which both clubs use.
“Despite what these clubs tell them, entertainers have the same rights as every other worker in the city,” Fritz-Mauer said. “They’re entitled to the minimum wage, and it’s illegal to force them to pay to work, especially since the clubs exercise so much control over them.”
From the customer side, entertainers were choked, slapped, and repeatedly photographed or filmed without their consent, the Denver Labor investigation found. The conduct violates club policies, but managers reportedly refused to eject the accused customers on many occasions.
Managers routinely took tips from bartenders, servers and barbacks (a bartender's assistant who helps keep the bar clean and stocked), Denver Labor found. At Rick's Cabaret, tipped workers had to put a portion of their earnings into what the manager called "The Rusty Envelope" each night. The moniker was in reference to the regional business manager.
Tipped workers were also required to sign forms each shift, acknowledging what they earned and how it was split between other staff. Diamond Cabaret allegedly destroyed these forms during the course of the Denver Labor investigation. However, workers had already provided proof to Denver Labor that the documents existed.
"We have been historically ignored and looked over, and so they're able to get away with a lot of this," said Dewey.
Dewey said she is sharing her story for reasons beyond her own paycheck.
Denver Labor said it previously investigated Diamond Cabaret in a separate case for unlawfully withholding a worker’s wages, retaliating against her and refusing to provide records.
In a statement, attorney Leah VanLandschoot said her clients, Diamond Cabaret and Rick's Cabaret, have "fully complied with the law." VanLandschoot called the investigation "one that disregards legal boundaries, tramples on due process, and seeks to strip hardworking entertainers of their autonomy."
- Read the full statement below
“Denver Labor and its chief crusader, Matthew Fritz-Mauer, have embarked on a reckless mission—one that disregards legal boundaries, tramples on due process, and seeks to strip hardworking entertainers of their autonomy. Under the guise of protection, Denver Labor is wielding subpoenas like weapons, demanding excessive documentation without a lawful basis, and violating the privacy of individuals who have chosen a profession that Denver Labor refuses to respect.
“Diamond Cabaret and Rick’s Cabaret have fully complied with the law. Yet Denver Labor, in a display of unchecked government overreach, continues to demand access to private business records beyond their legal authority, despite the complete absence of any substantiated claims of wage theft. These demands are not about justice—they are about control.
“By imposing arbitrary and capricious legal burdens on businesses and entertainers alike, Denver Labor is not protecting these women; it is silencing them. It is forcing them into a fight they did not choose – Denver Labor admits that Matthew Fritz-Mauer initiated these investigations on his own accord, not because of an actual complaint by an entertainer – subjecting them to a bureaucracy that ignores their voices and robbing them of the very independence and anonymity they cherish. The entertainers at these establishments are entrepreneurs—masters of their own schedules, their own careers, their own freedom. Yet Denver Labor seeks to ‘rescue’ them from a reality that needs no rescuing, manufacturing a problem where none exists and violating constitutional rights in the process.
“To use government power as a bludgeon, to extract personal data without just cause, and to coerce compliance under threat of ‘harmful inferences’ is not just an abuse of power—it is a dangerous precedent. If left unchecked, it will erode the fundamental principles of due process and fair treatment under the law.
“Diamond Cabaret and Rick’s Cabaret will not stand idly by as Denver Labor exceeds its authority. We oppose these unlawful takings, and we are and will continue to challenge this overreach in the courts, where the law—not political agendas—must prevail.”
VanLandschoot said her clients will challenge the Denver Auditor's decision in court. Diamond Cabaret and Rick's Cabaret can appeal Denver Labor's most recent findings, but as it stands now, if restitution is not paid by March 13, 2025, it will increase to 150% of unpaid wages.
The two clubs are owned by the same company, RCI's Hospitality Holdings. The company was at the center of a controversy this past summer after it tried to open a strip club on Central City's Main Street, angering neighbors.
Denver7's Claire Lavezzorio contributed to this report.
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