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May 15, 2024

Tolland strip club trio indicted on 12 charges, including COVID-19 relief and tax fraud, promoting prostitution

Three strip club officials have been indicted on 12 charges, including tax fraud and money laundering, stemming from activities at the Electric Blue strip club in Tolland.

Authorities say club owner Kenneth Denning, of Holland, Massachusetts, and the club’s manager and bookkeeper, Joshua Baker, of Willimantic, provided false information to the club’s tax-return preparer in 2020, 2021 and 2022 by underreporting gross receipts by about $5.7 million.

According to the indictment, Eclectic Blue had a lap dance room as well as VIP rooms where dancers performed commercial sex acts for customers.

Customers would pay an entry fee to enter the rooms, which were either semi-private or private, along with an additional fee to the dancer.

The club also collected fees at the door and required dancers to pay fees in order to perform. 

According to authorities, Baker, 41, or another employee, would collect cash received by the club and place it in a safe in Denning’s office. Denning, 67, would use the money to pay business expenses and to fund personal expenditures, including trips to casinos.

Also, the indictment says Denning committed fraud by obtaining COVID-19 relief funds by   certifying that the business did not “present live performances of a prurient sexual nature.” Denning received a loan of about $150,000 in July 2020.

The indictment also names 41-year-old William Mayo, of Manchester, the club’s bouncer, who was primarily responsible for hiring dancers. Many of the dancers were not legally authorized to live or work in the United States, according to the indictment.

Denning, Baker and Mayo were indicted by a grand jury on Tuesday. They were arrested on Wednesday.

Denning, Baker and Mayo were charged with conspiracy to use an interstate facility to promote or facilitate prostitution, which could lead to up to five years in prison, and with unlawful employment of aliens, which carries a maximum prison term of six months.

In addition, Denning and Baker are charged with conspiracy to file false tax returns, which carries a maximum prison term of five years, and with conspiracy to commit promotional and concealment money laundering, which could land them in prison for up to 20 years.

Denning is further charged with engaging in a monetary transaction with proceeds derived from prostitution, which carries a maximum prison sentence of 10 years, related to a cash deposit of roughly $21,700 at Mohegan Sun.  

He is also charged with aiding and abetting the filing of a false tax return related to his personal tax return for the 2020 tax year, which carries a maximum of three years in prison, and with willful failure to file his personal tax return for the 2021 tax year, which carries a maximum sentence of one year in prison. He is also charged with wire fraud in connection with the COVID-19 relief loan, which carries a maximum term of 20 years in prison.

This investigation is being conducted by Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation Division, the Connecticut State Police, the Connecticut Department of Consumer Protection – Liquor Control Division and the Massachusetts State Police, with assistance from Willimantic Police Department and Manchester Police Department.  

Electric Blue is no stranger to controversy. In recent years, it drew attention and criticism for a risque billboard on Interstate 84 that showed scantily clad dancers. 

Residents and commuters complained to the town manager, and Electric Blue agreed to take the billboard down in 2018.

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