TOLLAND, Conn. — Three people were charged in the operation of the Electric Blue strip club in Tolland, the U.S. Attorney's office said Wednesday.
Kenneth Denning, 67, of Holland, Mass.; owner of the strip club who oversaw operations including employing dancers who performed lap dances and nude dances, Joshua Baker, 41, of Willimantic; club manager and bookkeeper and William Mayo, 41, of Manchester; club bouncer responsible for hiring dancers, are all facing charges in a 12-count federal indictment, according to the U.S. Attorney's office.
All three are facing charges of using an interstate facility to promote or facilitate prostitution with a maximum prison term of five years, and illegally hiring non-U.S. citizens with a maximum prison term of six months.
Baker and Denning are also facing charges of conspiracy to file false tax returns with a maximum prison term of five years; and conspiracy to commit promotional and concealment money laundering, with a maximum prison term of 20 years.
Additional charges facing Denning include using funds that were gained through prostitution for a cash deposit of $21,000 at Mohegan Sun Casino, involving a maximum prison term of 10 years; aiding and abetting the filing of a false personal tax return in 2020 with a maximum prison term of one year; and wire fraud in connection to applying for and receiving a pandemic-relief Economic Injury Disaster Loan with a maximum prison term of 20 years.
According to the U.S. Attorney's office, the indictment alleged that Electric Blue dancers "regularly performed" sexual acts for customers, who would pay money to use a "lap dance room" or "VIP room." Money was also obtained through charges paid at the door and by dancers to perform.
The indictment says that the cash, referred to as "Kenny's money," would be collected by Baker or another employee, placed in envelopes and then put in a safe in Denning's office, the U.S. Attorney's office said. The money would then be used to cover business expenses and Denning's personal expenses, including to the casino.
Denning and Baker also allegedly underreported "gross receipts from the club" and did not include the income from the "commercial sex acts" during their tax returns in 2020, 2021 and 2022, the U.S. Attorney's office said, noting that $5.7 million in business receipts was not reported and caused a tax underpayment of more than $2 million.
Further allegations in the indictment stated that Denning fraudulently received a $150,000 loan in July 2020 during the COVID-19 pandemic by claiming that the business "did not present live performances of a prurient sexual nature," according to the U.S. Attorney's office.
Federal, state, and local agencies are conducting the investigation, including Homeland Security Investigations, the IRS Criminal Investigation Division, the Connecticut State Police, the Connecticut Department of Consumer Protection Liquor Control Division, and the Massachusetts State Police, along with the Willimantic Police Department and Manchester Police Department.
The indictment says Mayo hired many dancers who were "not authorized to live or work in the United States."
Any Electric Blue employees or dancers who were victims of the acts described in the indictment are asked by the U.S. Attorney's office to contact their Victim Advocate Office at usact.vns@usdoj.gov or call them at 203-696-3039.
The charges follow the town of Tolland withdrawing its notice of suspension to the business on April 17, 2023, after a long term investigation into allegations of prostitution and criminal activity and a search warrant execution from Connecticut State Police and Homeland Security.
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