The State Pays for Sex

How a mob-run S&M club put your tax dollars to work

"[One] custom-made torture chair, double-sided with 7 leather restrainers each side and with cross bars," is one such appraisal entry. "Spectator platform facing hitching post," reads another. There was also a "hanging rack," a "leather sling," and a "gynecologist's examination chair, steel frame."

According to Marini, the examining chair was picked up on the sidewalk outside St. Vincent's Hospital after a couple of nurse- customers tipped off the Vault's owners that some medical equipment with kinky potential was being disposed of at the facility.

When that first check arrived, the sex entrepreneurs pounced. Wiseguy Billy Perrotta, whose capacity for violence made even Rotondo watch his step around him, immediately claimed $80,000 as his cut, Marini says. Rotondo, Waxtel, and the two original owners, Cooke and Carpenter, divvied up the rest.

Where the state took a beating: the Vault, circa 1994
photo: Efrain Gonzales
Where the state took a beating: the Vault, circa 1994


An interview with reporter Tom Robbins

But the $229,000 was only the start. State condemnation law allows claimants to accept such initial payments while still challenging the official estimate of their property's value. The Vault's crew retained a top-notch condemnation attorney named Michael Rikon, who quickly filed a lawsuit demanding $2.5 million in compensation as the real cost of the fixtures that were going to be lost.

To come up with that higher number, the club hired its own appraiser. Marini said that walk-through was done in private. "I was there when a couple of guys from the appraisal company came in," he says. "Billy [Perrotta] asked me to leave the room. It was the only time they ever made me leave."

Rikon, the attorney pressing the case on the Vault's behalf, told the Voice that the new appraiser was a qualified professional who handled the evaluation with the same careful expertise that would be applied to any other job—even though the club's furnishings were a little off (or on) the beaten track.

"I recall that there were some very unusual trade fixtures," says Rikon.

The lawsuit was filed in the state's Court of Claims, and records there show that the appraiser ground out an excruciatingly detailed 168-page inventory of the club's contents, noting 579 separate items. The list noted not only every "kneeling horse" but the size and length of the anchors used to affix them to the floor. "Leather wrist restraints" included notations on the size of the eye-bolts used to peg them to the "hanging frame."

Here's item No. 133 on the list: "One custom-built 'Iron Maiden' type punishment unit, constructed of plywood and wooden plank, 34 W x 18 D x 68 H, having two doors on front with hook and eye lock, 4-tier interior form structure with 'stock-type' partial opening on top, ¾" plywood and plank, painted black."

Once the inventory was filed with the court, Rikon pressed for a trial date. As is customary in such cases, according to Rikon, the judge conducted a pre-trial "viewing" of the property.

"As I recall, the judge was there at least two and a half hours, looking at everything, verifying everything," says Rikon. Shortly after the tour, Rikon got a call from transportation department officials asking to settle.

A handwritten note in the contract file confirms that the state got nailed for a total of $1.85 million in January 1999 at a "pre-trial conference." Asked to review the case, state transportation department officials say that regardless of the kinky nature of the business, the payments reflected prudent decision making.

"The operators exercised their rights under the law and sought a ruling from the courts on initial payments they had received," says transportation department spokeswoman Jennifer Post. "After subsequent talks with the parties, a settlement was reached which involved additional moneys."

State officials noted that the Vault payments were just a small part of the $104 million that was spent to acquire properties for the West Street project—a task that required condemnation of some two dozen properties in a three-and-a-half-block stretch.

'My guess is, the state was in a rush to finish the West Side Highway," says Vault investor David Waxtel of the sudden settlement. Whatever the reason, Waxtel took his share and moved on. "I got the least amount of anyone," he says bitterly. A closing statement prepared for the final payment shows Rotondo, Perrotta, and club co-founder Frank Cooke each snared an extra $50,000, amounting to more than $200,000 apiece. (Fees paid to attorneys and the appraiser accounted for more than $500,000.)

Rotondo and Perrotta tried to relaunch the club at a site on 12th Avenue and West 23rd Street. But the magic was gone, and the new Vault couldn't match the original. A couple of years later, facing a murder rap, Anthony Rotondo decided to quit the mob and become a cooperating witness for the government. The FBI debriefed him about his sex club business. Memos show that Rotondo gave the G-men the general outlines of the arrangement. He told them about the state transportation department condemnation payment, but he lowballed the amount the partners received, describing the settlement as "approximately one million dollars." Rotondo made no mention of his own cut of the proceeds. He'd have good reason not to: The feds might well have demanded restitution.

Perrotta, who lives in New Jersey, didn't return calls. Janet Carpenter and Frank Cooke later divorced. Cooke, who is in poor health, lives now in upstate New York and couldn't be reached. Carpenter is remarried to a real estate broker named Robert Zarrilli in Staten Island and has obtained her own broker's license. "I don't know if there is anything to talk about," said her husband when he was asked to pass a message to his wife.

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