DEPARTMENT OF JUSTICE

Acting United States Attorney Billy J. Williams

District of Oregon

FOR IMMEDIATE RELEASE

CONTACT: GERRI BADDEN

WEDNESDAY, MAY 20, 2015

PHONE: 503-727-1033

WWW.USDOJ.GOV/USAO/OR

GERRI.BADDEN@USDOJ.GOV

STRIP CLUB OPERATORS CHARGED WITH CONSPIRING TO PROMOTE

PROSTITUTION AND TO DEFRAUD THE IRS
PORTLAND, Ore. Today a federal grand jury returned a superseding indictment
charging Lawrence George Owen, 73, of La Paz, Mexico, and Gary Bryant, 67, of Estacada,
Oregon, with conspiring to defraud the IRS of more than $1.5 million in unpaid income and
payroll taxes stemming from the operation of strip clubs and other adult-oriented businesses in
the Portland metropolitan area between January 2006 and June 2010. The grand jury also
charged Owen with conspiring to use facilities of interstate commerce to promote illegal acts of
prostitution at the businesses throughout that period. The U.S. Attorney also filed a criminal
Information charging Kandace Desmarais, 63, and Gilbert Mace Desmarais, 50, both of
Milwaukie, Oregon, with participating in both conspiracies.
The superseding indictment and information allege that, by January 2006, Lawrence
Owen and Gary Bryant, along with Kandace Desmarais and Gilbert Desmarais (two of Owens
stepchildren) managed eleven adult-oriented businesses. The businesses, which accepted cash
only, included eight strip clubs (the Landing Strip, Dillingers Pub, the Oh! Zone, Sugar Shack,
Sugar Shack Too, Peek-a-Boos, Tommys, and Tommys Too), two stores offering pornographic
videos and sex toys (Video Visions and Video Visions Plus), and a restaurant featuring Oregon
Lottery games (Pelican Bay).
The strip clubs featured totally nude female dancers who paid the management stage
fees of $15 for every shift they worked. In addition, most of the strip clubs either had enclosed
rooms for private shows with the dancers or were adjacent to affiliated businesses with such
rooms. Customers could arrange for 30-minute private shows with the dancers by paying $60
to the house and at least $100often several times that amountto the dancers. In fact, the
private shows frequently involved illegal acts of prostitution paid for with cash from the
conspirators ATMs.
The grand jury and U.S. Attorney alleged that the conspirators concealed more than five
million dollars in receipts from the IRSand fraudulently avoided $1.5 million in income
taxesbetween January 2006 and June 2010, largely by failing to report income from dancers
stage fees and the payments for private shows. The businesses also failed to pay payroll
taxes for numerous employees who were paid only in cash without any record of employment or
wages.
The charges culminate an investigation by the Internal Revenue Service Criminal
Investigation (IRS-CI) spanning more than five years. In June 2010, IRS-CI agents
1

executed search warrants at all of the businesses and the homes of many of the
conspirators. The agents seized more than $800,000 in cash and records of more than
35,000 private shows at the businesses over the course of the charged conspiracy.
Each charge carries a maximum sentence of five years in prison. If convicted, defendants
Lawrence Owen, Kandace Desmarais, and Gilbert Desmarais face a maximum of ten years in
prison, and Gary Bryant faces a maximum of five years in prison.
An indictment is only an accusation of a crime, and a defendant should be presumed
innocent unless and until proven guilty.
The Portland Police Bureau assisted IRS-CI with this investigation. Assistant U.
S. Attorneys Seth D. Uram and Ryan W. Bounds are prosecuting the case.

///