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Cops allege naked ambition

Strippers go too far at clubs like PT's, say Minneapolis officers

Daniel J. Chacón, Rocky Mountain News

Published February 1, 2006 at midnight

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Strippers are doing a lot more than just stripping at a chain of nightclubs owned by local businessman Troy Lowrie, authorities say.

An investigation last year by Minneapolis police after Lowrie sought a liquor license in that city revealed a pattern of illegal activity in his strip clubs, including PT's Showclub in Denver and the Penthouse Club in Glendale, according to police documents.

Two undercover police sergeants posing as patrons said they were propositioned for sex and drugs and that they repeatedly witnessed sex acts on stage and in private booths, among other allegations.

Lowrie, chairman and chief executive officer of Lakewood-based VCG Holding Corp., which manages 16 adult nightclubs, said the accusations are false. He said he suspects Minneapolis was fearful of the adult entertainment industry expanding in the City of Lakes if it allowed a national chain to move in.

"I think it's a combination of fabrication and them trying to apply a Minnesota standard to out-of-state locations," Lowrie said Tuesday.

For example, he said, the policemen mistakenly referred to a banana-eating contest as an oral-sex contest on stage.

"It's a banana-eating contest to see who could eat a banana the sexiest," he said. "In Minneapolis, it's illegal to suck on a banana (in a strip club) because it's simulated sex."

VCG, which began trading on the American Stock Exchange in June 2004, owns and operates adult nightclubs in Denver, Indianapolis, Memphis, Phoenix and St. Louis.

The two Minneapolis sergeants visited seven of those strip clubs between May and July last year.

When they stopped at PT's Showclub on Evans Street in Denver, which includes the all-nude Club Inferno upstairs, they reported multiple violations of public indecency.

"I saw a nude dancer sitting on a male," Sgt. Kent Warnberg wrote in a graphic, 14-page report. "It appeared to me that this couple was having intercourse."

Sonny Jackson, spokesman for the Denver Police Department, said local law enforcement was aware of the Minneapolis investigation. However, he said late Tuesday that he didn't know whether the results of that investigation had been shared with anyone in the department.

The Vice and Narcotics Unit "hasn't seen any real violation in PT's license in the last two to three years," he said. "We routinely go into these clubs and check them out to make sure they're in compliance."

Stephanie O'Malley, director of the Denver Department of Excise and Licenses, which issues adult entertainment licenses in the city, said the club is in good standing. "I have not received any recent complaints related to this establishment," she said. "This is the first I'm hearing it."

The St. Paul Pioneer Press in Minnesota reported this week that Warnberg, one of the sergeants who investigated the strip clubs, is a convicted sex offender who served six months in jail on a fourth-degree sexual assault conviction.

"He doesn't seem like the best guy for the job," Lowrie said.

In an e-mail to the Minneapolis City Council, police Chief William P. McManus said "no record of this misdemeanor conviction" was in Warnberg's personnel file when he was assigned to the investigation. He noted that the conviction was more than 10 years old.

"Sgt. Warnberg has since been reassigned within the licensing division," the chief wrote. "Warnberg's reassignment was not related to the strip club investigation."

Minneapolis police declined to be interviewed for this story.

Matthew Laible, a spokesman for the city of Minneapolis, said the police department investigates liquor license applications. He said Lowrie was trying to take over a downtown Minneapolis club that required City Council approval because the deal included a liquor license transfer.

The police chief defended the investigation even though it involved out-of-state trips to strip clubs.

"Officers made several coordinated visits to questionable establishments to fully and fairly evaluate whether the city should grant a liquor license to allow VCG Holding to expand into Minneapolis," according to the chief's e-mail.

"This investigation resulted in VCG withdrawing their application," he wrote, calling the officers' work a success.

The two sergeants came to Colorado in May and visited the Penthouse Club in Glendale first. Both reported seeing lewd conduct between strippers and customers.

Glendale Police Chief Victor Ross said Tuesday was the first time he had heard of the allegations. Ross, who said officers continually monitor the club and investigate complaints, chastised Minneapolis police for failing to notify his department of their findings.

"In my opinion, they should have let us know that night if they were that concerned about it, and we would have gone down and taken care of the situation," Ross said. "It would have been corrected because clearly what they're alleging are violations, and I don't believe (club) management would have stood for it, and I know we wouldn't have."

Lowrie insists he runs a clean business and that his clubs have a strong policy against drugs and prostitution. He also said his company just got voted best management chain by the Association of Club Executives, the trade association of America's adult nightclubs.

"Are there bad seeds?" he said. "Absolutely, and we get rid of them as soon as we find out who they are."

Adult entertainment entrepreneur

• Name: Troy H. Lowrie

• Age: 40

• Career: Chairman and CEO of VCG Holding Corp., a Lakewood company that owns and manages adult nightclubs and other businesses.

1982-2003: Owner/president of International Entertainment Consultants Inc., managing adult entertainment nightclubs.

1992-1996: President of Western Country Clubs Inc., specializing in country western music bars.

1996-1998: President of New Millenium Media Inc., a publicly traded advertising company.

1996-present: President of Lowrie Investment Management Inc., the general partner of Lowrie Management LLP, which owns and operates adult nightclubs.

• The company: VCG Holding reported revenues of $12.7 million in the first nine months of 2005.

• Education: Master's in finance, University of Denver, 1988; bachelor's in business from Fort Lewis College, 1986.

• Family: Married with two young children.Source: Lowrie, Company Proxy Statement To Shareholders

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