A gangland killing, lap dancers who are said to sell sex and the criminal past of the man behind the Spearmint Rhino empire – A Standard investigation reveals the bizarre background to today’s legal battle to strip a lap-dancing club of its licence.
By Chris Blackhurst and Adrian Gatton
Evenening Standard
16 September 2002
ON 21 August last year, Stuart Cadwell, boss of Spearmint Rhino UK, the country’s biggest chain of lap-dancing clubs, left the company’s Tottenham Court Road branch and headed home. It was 2am as he walked to a nearby car park. Suddenly, he was the victim of an attack which was vicious even by the standards of central London’s increasingly mean streets at that time in the morning.
Two men came up behind, struck him on the head with a machete and knocked Mr Cadwell to the ground. He somehow fought back but was stabbed at least twice, one blow puncturing a lung. “He managed to crawl about 250 yards back to the club,” said Max Clifford, Spearmint Rhino’s publicist. Mr Cadwell was lucky: he was rushed to hospital and lived. His assailants made off with just £60.
A year later, nobody has been charged for the crime. Another victim of an unprovoked assault?
The police don’t think so. They suspect this was no ordinary street robbery, that Mr Cadwell was targeted by associates of a notorious north London crime family in a feud with his company.
For Mr Cadwell, having to deal with police questions was not a new experience. In September 1990, a woman was taking a ride with him in his helicopter in California.
Macy Rahgozar, 21, was the girlfriend of David Amos, a close friend of Mr Cadwell. She stepped out of the helicopter as it stood on the tarmac at Long Beach Airport to greet Mr Amos, who was waiting for her, and walked into the still turning tail rotor blades. Ms Rahgozar suffered massive head injuries and died.
A police investigation concluded the death was an accident.
Last year, Mr Amos was convicted of the m a c h i n e – g u n killing of a strip club boss in Los Angeles in 1989 – the year before the helicopter tragedy – and jailed. Mr Amos, who was close to a member of the Bonanno mafia family in New York, had paid a hitman to shoot Horace McKenna at his home.
Welcome to the seedy underbelly of Spearmint Rhino.
Since its arrival here, in 2000, Spearmint Rhino has become a magnet for businessmen entertaining clients or wanting to unwind after work. They flock to what the club advertises as its clean, ” look-but-don’t-touch” venues, where attractive nude girls dance round poles for them in the middle of the floor, or up close at their table, or more intimately still, in private back rooms.
The company now has seven clubs in the UK, three in London, two in Birmingham and in Harrogate and Bournemouth, and claims to be aiming for 100.
Vauxhall in London and Sheffield are due to open shortly. Holborn, in London, is also on the company’s list. Ultimately it wants to acquire public respectability by listing on the London Stock Exchange.
Spearmint Rhino’s owner is John Gray, 45. Well-groomed, with a carefully-coiffured hairstyle, Mr Gray is a hustling Californian who mixes easily with his highflying City clientele. He is richer than most of them, having made a fortune from his table dancers. He owns a mansion in Buckinghamshire and houses in the US, flies two private planes, a Cessna and a Gulfstream G4 jet, sails a 55ft yacht and drives two Mercedes.
Despite his outward ebullience, not everything is going Mr Gray’s way.
Spearmint Rhino has been on the wrong end of some bad publicity. Earlier this year, a waitress in the club’s Tottenham Court Road branch won £60,000 in a sex discrimination claim. She was told, even though she was pregnant, to wear a more revealing dress. When she refused, she was fired.
In the subsequent legal case, it emerged that male staff referred to dancers as “mingers” and “wildebeest”. Then, in another industrial tribunal hearing, between a broker and his bank, it was claimed “80 per cent of the market” liked to visit Spearmint Rhino for “whoring”.
Complaints about the noise of customers entering and leaving his clubs and suspicions that the “don’t touch” rules are being broken, have seen councils take a tougher attitude towards Spearmint Rhino. In June, Mr Gray’s vice-president, Philip Whitehouse, got a 12-month conditional discharge and a £3,000 fine for employing unregistered doormen at Tottenham Court Road.
Blackpool council has refused Mr Gray a licence and he is struggling to persuade Edinburgh to let him open there. In London, too, councillors are asking questions about Spearmint Rhino. Today, lawyers for the firm will be in court in another round in what promises to be a protracted battle to prevent the police and Camden council revoking and refusing to renew the drinks and entertainment licences of the flagship London club in Tottenham Court Road.
The police move to close the club comes after concerns it is a front for prostitution – a claim vigorously denied by Spearmint Rhino.
Camden councillors are entitled to ask why there was no initial objection by police to the club’s licence, when – the Evening Standard has established – Mr Gray has six convictions in the US for offences ranging from carrying a concealed weapon to writing dud cheques.
But not just Mr Gray. Until recently, Michael Mahoney was a director of the Tottenham Court Road club. Mr Mahoney has two convictions in the US for embezzlement. He and Mr Gray were in Boron Federal Penitentiary in the Mojave Desert in California at the same time. Now, Mr Mahoney – he was also Mr Gray’s accountant – has been fired for allegedly defrauding Spearmint Rhino of $250,000 to buy cars, jet skis and jewellery. Altogether, the club is pursuing him for $1.7 million it claims it is owed.
ON a corporate video for his clubs, Mr Gray talks about how he checks the pasts of his employees. Presumably, such a stricture did not apply to Mr Mahoney, who, coincidentally, is named as a producer on the video.
The Standard carried out investigations into the antecedents of Mr Gray He was born John Leldon Gray. However, legal documents show he has used the names, John Luciano, John Luciano Gianni and Johnny Win. Police in America says he now uses the identity John Gray but is also known to them as John Leldon Gray, John Luciano Gianni, Leldon Gray and Johnny Win.
Oddly, there is also a John L Gray, born in February 1957 and linked to two Spearmint Rhino addresses and one of Mr Gray’s home addresses, who is registered in the US as “deceased”.
Mr Gray was first arraigned in his early 20s, in 1981, for handling stolen goods. He was stopped and arrested by the Los Angeles Highway Patrol near his home in Pomona. Going under the name John Luciano, he received a sixmonth, suspended prison term and two years’ probation. In 1983, Mr Gray – aka John Luciano – was convicted in nearby Burbank for disturbing the peace.
Two years later, in 1985, and he was in court again in Pomona.
This time for carrying a concealed weapon in a vehicle. For that offence he got three months in jail and three years’ probation (later reduced to one year).
In the Eighties, Mr Gray was running a building firm, Graco Construction in California. He moved into restaurants, opening the Peppermint Elephant chain across California. When table dancing took off, he seized his opportunity to exploit the new craze, renaming his eateries Spearmint Rhino. But his business career was chequered.
In San Bernardino, in California, in 1994, he received a one-year prison sentence, suspended for two years, for embezzlement. Then a year later, in 1995, he was before the authorities again, for writing dud cheques to pay contractors. In all, he bounced cheques worth $137,000.
He got six months in jail, but after plea bargaining, the sentence was later suspended and he ended up with 68 months’ probation – a period which only ended in April 2001, after he had set up in Britain.
Mr Gray’s publicist, at Max Clifford Associates, has argued that writing dud cheques is not an offence in this country. But in California, the prosecution alleged this was “not a case of poor bookkeeping by an otherwise honest businessman. The facts show a clear pattern of criminal conduct. John Gray is financing his business endeavours by intentionally writing bad cheques to his creditors”.
His criminal activity didn’t stop there. When he was sentenced for the dud cheques – the prosecution claimed he wrote 175 in all but he was charged with just 10 – Mr Gray was already in Boron federal prison for making a false statement to win a contract to build living quarters for the US navy. He claimed he owned more assets than he did, to try and cover himself against any problems with the contract.
Because it was a government deal, the investigation came under the aegis of the FBI, whose case agent, Anthony Gordon, said that Mr Gray knowingly defrauded the US navy. The case, said Mr Gordon, was “a priority” at the time.
Plea bargaining saw the government drop charges against him for suspected fraud in two other contractsand three bank loans. In return, Mr Gray pleaded guilty and received six months in jail, three years’ probation and an order to pay $134,000 compensation.
Mr Gray’s court actions continue. In the US, four women have sued Spearmint Rhino for using their pictures on billboards and in literature about striptease without their permission. The company is accused of lifting the photos from bikini and lingerie magazines and pasting them on to its own advertisements. All the cases have now been settled out of court.
IN one, a woman’s husband saw her picture on an advert and was shocked to think his wife had been a stripper.
Earlier this year before the case was settled, her lawyer said Spearmint Rhino’s use of her image, “nearly blew her marriage apart”.
The Spearmint Rhino boss must be in constant meetings with lawyers. In one city in the US, in Los Angeles, no less than 38 separate suits have been filed against him or his business since 1999.
Many relate to bad debts. Credit records show he has judgments against him or his many US companies over the years totalling more than $300,000.
Why Mr Gray should be so parsimonious is not immediately apparent. From the outside, Spearmint Rhino looks incredibly successful.
But then he claims to own 31 clubs in the US even though the company’s own website identifies only nine. Max Ahmadi, Mr Gray’s former vice-president, says he can only list 12 or 13 at most.
In Los Angeles, another former business partner, Mike Gray (no relation), is suing the Spearmint Rhino chief for breach of contract over a stake in a club there. How Spearmint Rhino likes to work, is that Mr Gray takes a controlling share in a new club, with investors coughing up cash as sleeping partners. In his case, Mike Gray claims he was owed 20 per cent and is now having to sue to get his money back. “I haven’t seen one red cent,” he said.
In the UK, Mr Gray is the director of 27 companies. In March this year, Spearmint Rhino filed accounts for four of them. Three of the four were five months past the legal deadline and the firm was fined for the delay.
According to the accounts, two of his clubs are in dispute with Customs and Excise over a VAT bill for £217,000. The accounts for the London and Birmingham clubs have been qualified by the auditors because the company lost the till receipts, while in Birmingham the payroll slips also went missing.
Losing Tottenham Court Road would severely damage Mr Gray’s pocket. But it wouldn’t signal the end of his empire. He has discovered a formula which he is now taking worldwide – Moscow is a recent addition. Irrepressible and unstoppable, nothing it seems can get in his way, not rows with former business partners and exemployees, and certainly not his criminal associations and record.
A spokeswoman for Mr Gray at Max Clifford Associates said they were irrelevant. “John had taken over his father’s construction business, which was taking a decline at the time – all the creditors were repayed. John has repaid his debt to society and has always since operated as a good, corporate citizen.”
The women claiming their pictures had been used without their permission came about, said the spokeswoman, because “in the US, Spearmint Rhino purchase images through an agency – a shift manager at the agency provided an unauthorised image for use by Spearmint Rhino and it has there fore been Spear mint Rhino/John who bear the responsibility for this.”
Mr Gray, stressed his spokeswoman, “really is a good upstanding corporate citizen and Spearmint Rhino strives to be the same”.
This week, more businessmen will hog the tables at his clubs, order champagne, view the girls, sign away hundreds of pounds in credit card bills and claim it back as “corporate entertaining”. And go back to their wives and partners, and not tell them where they’ve been. The whole business is built on deceit: theirs and Mr Gray’s.
(Copyright 2002).
Source: EVENING STANDARD 16/09/2002
Adrian Gatton 