More than nude dancing in the Ritz Cabaret

At Fells Point nightclub, investigations entangle DEA, lawyer, TV show

May 23, 2002|By Gail Gibson | Gail Gibson,SUN STAFF

As sure as its nude dancers and drink specials drew steady customers, the Ritz Cabaret on South Broadway in Baltimore attracted trouble.

A money-laundering scheme launched at the Fells Point nightclub landed three men, including owner Francis Lee, in federal court. A bar brawl cost two Drug Enforcement Administration officers their badges. Illegally hired Hungarian dancers faced deportation. Even the producers of an HBO drama filmed part of the series at the Ritz, only to learn that it was about to be seized by the government.

The Ritz's story might not be finished. Authorities say a Baltimore attorney was secretly recorded as he met with one of the co-conspirators in the money-laundering scheme and an undercover FBI agent, as they discussed the plan and "how to make it look," a federal prosecutor said at a recent hearing.

The attorney, Melvin J. Kodenski, who has represented Baltimore clubs and bars on regulatory issues for three decades, said in an interview that he had no involvement in the case and has not been questioned about it by federal investigators.

But during an exchange in U.S. District Court in Baltimore, Assistant U.S. Attorney Martin J. Clarke indicated that authorities were investigating Kodenski's ties to Lee, who is scheduled to be sentenced today.

Lee, 46, pleaded guilty to federal money-laundering charges in March. According to a transcript of that hearing, Lee protested that he had accepted a lawyer's advice that the purported drug cash from an FBI agent could be considered a legal loan.

Defense attorney David P. Henninger and Clarke both identified the attorney as Mel Kodenski, although his name was misspelled in the transcript as Kradinski.

Clarke said one of the undercover tapes was made in the lawyer's office, and Henninger said there were "notes prepared and signed" during the meeting.

When Chief U.S. District Judge Frederic N. Smalkin bluntly asked during the proceedings where Kodenski was, Henninger replied: "He may be here later, your honor."

"There is some investigation of him, is there?" the judge asked.

Said prosecutor Clarke: "This investigation continues, your honor, yes."

Kodenski said in an interview that he had done work for Lee in the past but the account offered in court was wrong: "I don't remember having any conversations with him about that."

A spokeswoman for the U.S. attorney's office said prosecutors could not release any additional information. Special Agent Peter A. Gulotta Jr., a spokesman for the FBI's Baltimore office, would say only that the investigation is continuing.

The two-year, undercover FBI sting that led to a 20-count indictment against Lee and two other men -- and captured the alleged conversation involving Kodenski -- began in April 1999 when a witness told federal investigators that Lee had been asking whether any local drug dealers might be interested in "investing" their profits in his club, court records show.

Lee came to the United States in 1975 from Vietnam, where he had studied at a seminary to become a Roman Catholic priest. He enrolled briefly at Georgetown University and at Catholic University of America, both in Washington, but then went to bartending school to earn money to send to relatives.

The business was a good one for Lee. He eventually set up the Ritz Cabaret, formerly known as the New York, New York, with licenses to sell alcohol and offer live adult entertainment.

In the crowded Fells Point bar scene, the Ritz is the only club with a license allowing nude dancing, and Lee boasted on undercover FBI tapes that it brought in $5,000 to $6,000 a day.

In the spring of 1999, authorities say, Lee was looking for money to renovate and expand the club, a narrow, dilapidated storefront at 504 S. Broadway, when an acquaintance arranged a meeting with a drug dealer he introduced as "Jim," who turned out to be FBI Special Agent James Fitzsimmons.

Their guarded meeting, at Mo's Seafood in Glen Burnie, launched the investigation that landed Lee, Kerry C. Canavan and Henry D. Caldarazzo in federal court two years later.

The three men all have pleaded guilty to roles in laundering more than $360,000, money they believed came from drug dealing and an armored car robbery, but which actually was part of the FBI operation.

Even as the sting played out in 1999 and 2000, the money-laundering scheme wasn't the only trouble at the Ritz.

At the same time that the FBI was building its case, another federal agency found two of its officers caught in a scuffle at the club that cost them their jobs.

Bouncer Steven Young said in a lawsuit last year that a U.S. Drug Enforcement Administration agent pulled his gun and pointed it at Young's head after an argument in the Ritz. Another agent was accused of shoving a customer.

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