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Strip Club Owner Wins Lawsuit

Harvey, Illinois A lawsuit claiming the city of Harvey illegally blocked a strip-joint operator from opening a club in the south suburb has been settled for what sources say is a sum in the range of $600,000.

John Galioto sued Harvey in 2002, saying then-Mayor Nick Graves welcomed his plans to build an upscale adult entertainment club, The Flamingo, but closed the business the day it opened because Galioto did not have a sexually oriented business license.

Galioto argued he was selectively targeted. The four other strip clubs in town did not hold such licenses, either, he said.

Eric Kellogg was elected mayor of Harvey last year after a campaign criticizing Graves for approving liquor licenses for strip clubs. Kellogg rejected offers by Galioto and a consultant, Wallace “Gator” Bradley, to provide The Flamingo with the needed licenses.

Galioto claimed Kellogg was biased against him, too. He pointed to $2,400 in campaign contributions Kellogg got from one of Galioto’s competitors, Club O, a strip joint adjacent to the hotel where The Flamingo would have operated. Kellogg was unaware of the contribution and returned it, a spokesman said.

U.S. District Judge David Coar, who presided over the case, appeared to agree with Galioto, chastising Harvey for a “lack of uniform enforcement.” Galioto and the insurance company representing Harvey settled the case and it was dismissed March 29. Several informed sources said the company agreed to pay Galioto’s company, Illusions Too Reality, about $600,000. Harvey would pay the first $100,000 with the insurance company picking up the rest. Court records do not say whether the club may now open.

Galioto and Kellogg declined to comment. Harvey’s City Council is expected to consider the settlement Monday in a closed session.

Bradley, a former enforcer with the Gangster Disciples street gang, criticized Kellogg for not licensing The Flamingo. Kellogg could have required each of Harvey’s strip clubs to pay annual licensing fees to raise revenue for the cash-strapped city, Bradley said.

Graves, meanwhile, said Kellogg should have taken the lawsuit to trial.

“He [Galioto] shouldn’t have gotten $6,” Graves said. “He never had a license, never had a permit to open, nothing. I can’t understand why they settled so fast.”

Galioto has claimed The Flamingo spent about $300,000 to renovate the hotel where the club would have operated. One court filing estimated the club lost about $7 million in potential revenue.

Galioto was forced to step down as an organized labor leader in the 1990s over allegations of improper financial dealings and mob ties — which he denies. He operates another strip club, Allstars, in Northlake.

 

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