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Sue-Happy King of Diamonds Strip Club Owner faces IRS

Minnesota- Larry Kladek owns an Inver Grove Heights home valued at nearly $6 million. Yet he once sued a former employee over $44.31. He sued a one-time housemate for, among other things, not returning some pillows and a coat rack. Once, he cursed out a sheriff’s deputy trying to seize a woman’s car and threw the keys onto the roof of his strip club.

Now, the embattled and often combative owner of the King of Diamonds is in court again, charged in federal court with evading income taxes through an ATM machine allegedly rigged to pump about $2 million into a secret bank account over several years. IRS investigators say Kladek used the money to buy investments and help build his expensive home.

It should come as no surprise to people who know him that Kladek is fighting this, too. Kladek, 65, has developed a reputation over his 40-plus years owning the strip club as someone almost eager for confrontation, no matter how big the battle — or how small.

Kladek hasn’t responded to several requests for interviews since he was indicted Sept. 23 on charges of tax evasion and filing false tax returns.

He has pleaded not guilty to the charges, which stem from 2000 through 2003. A “change of plea” hearing was scheduled for Kladek in federal court in St. Paul on Friday — raising the possibility that he would plead guilty in the case. But he canceled the hearing. A jury trial is scheduled to begin Dec. 15.

Owner of the King of Diamonds since 1965 — perhaps the oldest strip club in the Twin Cities — Kladek appears to have won few friends in the business community.

Tom Stanton, an Inver Grove Heights business owner who has known Kladek for years, recalled a time when friends of his were trying to close on a property sale with Kladek. But the closing bogged down. Kladek, he said, held it up for nearly a half-hour — over a $2 difference in price. “Frankly, a woman had a $2 bill and she put it in just so they could move ahead,” Stanton said.

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