The exterior of Rick's Cabaret & Steakhouse is seen in New York City, U.S. October 7, 2017. Picture taken October 7, 2017. REUTERS/Stephanie Keith

By Jonathan Stempel

NEW YORK (Reuters) -The New York state auditor, who allegedly accepted lap dances to help the parent company of Rick's Cabaret and other strip clubs avoid millions of dollars in taxes, has been indicted for fraud.

Alton Plunkett pleaded not guilty to charges of criminal tax fraud, bribery, conspiracy and falsifying business records on Tuesday at a state court in Manhattan, his lawyer Gary Lesser said.

His plea came two weeks after New York Attorney General Letitia James charged RCI Hospitality Holdings and five executives, including CEO Eric Langan, over their alleged 13-year bribery scheme ending in January 2024.

Those defendants have denied wrongdoing. Plunkett's name had been redacted from the 79-count indictment.

'SO MANY BEAUTIFUL WOMEN,' DEFENDANT ALLEGEDLY WROTE

James accused Plunkett of helping RCI avoid more than $8 million in sales taxes by arranging favorable treatment in six audits.

The taxes were owed on "Dance Dollars," an in-house currency that clubs sold to customers for various services.

Plunkett allegedly received at least 13 complimentary trips to RCI-owned strip clubs in the Miami area, including up to several thousand dollars per day of lap dances.

The indictment included dozens of emails and text messages, including a February 23, 2022 text from Plunkett to RCI's controller, his main company contact.

"This was the best trip I had in Florida," Plunkett allegedly wrote. "The girls were very beautiful and nice. On Thursday night there so many beautiful women. That's why I do many lap dances instead of going to the room."

RCI SHARES FELL AFTER INDICTMENT

Plunkett's top criminal tax fraud charge carries a maximum 25-year prison term.

Lesser declined to discuss the indictment. He said Plunkett was not required to post bail but is surrendering his passport.

The Manhattan strip clubs Rick's Cabaret, Vivid Cabaret and Hoops Cabaret and Sports Bar were also charged in the indictment.

Shares of Houston-based RCI fell 25% in the two days surrounding the indictment's unveiling. Through Monday, the shares had recovered about half of that decline.

(Reporting by Jonathan Stempel in New YorkEditing by Marguerita Choy)