In a civil rights lawsuit filed Friday, two Denver strip clubs claimed that Denver labor officials showed a “reckless abuse of power” when they launched a wage theft investigation into Diamond Cabaret and Rick’s Cabaret and Steakhouse which led to nearly $14 million in fines. 

The 62-page complaint by attorneys representing RCI Holdings alleges that the City and County of Denver, the Denver Auditor’s Office, Denver Auditor Timothy O’Brien, Denver Labor, Denver Labor Executive Director Matthew Fritz-Mauer, and Denver Labor Hearing Officer Ellen Kelman showed “shocking and unconstitutional” overreach in their investigation.

The lawsuit accuses Fritz-Mauer of launching a crusade to “rescue” strippers at these adult nightclubs and insisted that the dancers did not ask for his help. 

But O’Brien said that what he found in his years-long investigation was one of “the most extraordinary cases he has ever conducted.”

In a statement, the Denver Labor Department said that it would continue its investigation and that “workers at RCI Holdings-owned businesses should contact us if they feel like their rights have been violated.”

Fritz-Mauer indicated that there was much more to the investigation, which started in May 2023 beginning with what the lawsuit contends was a “routine compliance audit.” 

However, attorney Leah Vanderschoot claims that the Denver Labor Department illegally accessed confidential business records to conduct its investigation. Together, the clubs were ordered to pay the affected workers about $11.3 million in restitution. That amount is based on the $2.6 million in actual wages stolen, plus 300 percent in damages and 12 percent in annual interest, the auditor’s office said.

Denver’s Diamond Cabaret and Rick’s Cabaret and Steakhouse are two of approximately 86 adult entertainment venues owned by RCI Holdings, one of the country’s largest adult entertainment corporations with venues in 13 states from Miami to Texas and Arizona.

The company owns $250 million to $280 million in properties across the United States, according to its first quarterly Zoom meeting with investors.

Though their offices are named in the lawsuit, O’Brien, Fritz-Mauer, and Kelmen are also being sued individually. 

RCI has dealt with these same types of worker and entertainer allegations in other states. There have been two class action lawsuits, one of them filed over a decade ago in New York and a more recent lawsuit in Texas.