United States of America v. POWER COMPANY, INC., DBA The Crazy Horse Too

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
POWER COMPANY, INC., DBA The
Crazy Horse Too and FREDERICK JOHN
RIZZOLO, AKA Rick Rizzolo,
Defendants - Appellants.
No. 13-10643
D.C. No. 2:06-cr-00186-PMP-
PAL-1
MEMORANDUM*
Appeal from the United States District Court
for the District of Nevada
Philip M. Pro, Senior District Judge, Presiding
Argued and Submitted April 14, 2015
San Francisco, California
Before: SCHROEDER and N.R. SMITH, Circuit Judges and KRONSTADT,**
District Judge.
FILED
APR 30 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The Honorable John A. Kronstadt, District Judge for the U.S. District
Court for the Central District of California, sitting by designation.

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Appellant Frederick John Rizzolo (“Rizzolo”) 1 has appealed the order of the
district court denying his motion to deem satisfied certain of his restitution, fine
and forfeiture obligations to the United States. We have jurisdiction under 28
U.S.C. § 1291. See United States v. Carter, 742 F.3d 440, 445 (9th Cir. 2014). We
affirm.2
Because the parties are familiar with the facts, we do not recite them in
detail. After Rizzolo pleaded guilty, personally and on behalf of his business
Power Company, Inc., to tax fraud and racketeering conspiracies, the United States
took title to property owned by Rizzolo, including an adult entertainment club and
the real property on which it was located. The United States did so pursuant to an
order of substitution of forfeiture issued under 18 U.S.C. § 1963(m). At the time of
the forfeiture, the parties and the district court anticipated that the United States
would sell the club and the real property. They also expected that any resulting
1 Although both Rizzolo and Power Company, Inc., d/b/a The Crazy Horse
Too (“Power Company”) are identified as appellants in the Notice of Appeal, the
parties’ briefs identify Rizzolo as the only appellant.
2 Rizzolo has also filed a motion to strike dehors the record certain statements
made by the United States at oral argument. That motion is denied.
2

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proceeds that exceeded the amount of what was owed to third parties would be
applied to Rizzolo’s restitution, fine and monetary forfeiture obligations. 3
Rizzolo claims that, after the United States took title to the property, it failed
to renew valuable licenses associated with the adult entertainment club. He also
claims that the loss of these licenses caused a very significant reduction in the
value of the club. Rizzolo argues that the United States should have done more
than seek potential purchasers during the 10-month period from the time it took
title to the club to the time the licenses expired. Thus, he contends that the United
States should have operated the club through a receiver or other third party in order
to maintain its value by renewing the licenses. On these grounds, he contends that
the district court should have found that the United States breached the plea
agreement and engaged in waste. Rizzolo contends that the amount of this alleged
waste should have been credited against his outstanding obligations, and that
crediting this amount would satisfy all of them.
The district court did not commit clear error in determining that the United
States did not breach the plea agreement. See United States v. Salemo, 81 F.3d
3 At oral argument, counsel for Rizzolo waived the argument that these
obligations were satisfied due to the market value of the property at the time of
substitution.
3

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1453, 1460 (9th Cir. 1996). 4 Nor did the district court clearly err in determining
that Rizzolo failed to show that the diminution in value of the club was caused by
the loss of the licenses, or that the licenses would have been preserved if the United
States had made additional or earlier efforts to maintain them. 5
The district court also did not clearly err in determining that Rizzolo did not
experience a material change in economic circumstances that might affect his
ability to pay restitution. See United States v. Waknine, 543 F.3d 546, 555 (9th Cir.
2008). In his reply brief below, Rizzolo made claims about his income, net worth
and occupation. However, none was supported with evidence. It was not error to
reject these unsupported claims in light of Rizzolo’s ability to earn income, as well
as his history of concealing assets.
For these reasons, we AFFIRM.
4 Although Appellant’s counsel argued that the standard of review is abuse of
discretion, because a factual issue is presented clear error review is proper. United
States v. Ajugwo, 82 F.3d 925, 928 (9th Cir. 1996).
5 The district court did not reach Rizzolo’s argument that the restitution, fine,
and forfeiture obligations imposed an excessive fine in violation of the Eighth
Amendment. It was not necessary for the district court to do so because this
argument was premised on the factual claims that the district court rejected, i.e.,
that the United States breached the plea agreement and engaged in waste. Because
we affirm the district court, we also do not reach this argument.
4

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