Judge continues former Milford strip club owner bankruptcy probe

BRIDGEPORT — A judge has given federal lawyers more time to review the finances of a former Milford strip club president who filed for bankruptcy after losing a $113,560 judgment to exotic dancers who worked there.

U.S. Bankruptcy Judge Julie Manning ordered the case of Fairfield resident Joseph Regensburger, the former president of Keepers Gentlemens Club, continued after the dancers’ lawyer revealed Regensburger received a $26,094 check from a Derby-based limited liability company that wasn’t reported in his bankruptcy filings.

During a hearing last month in federal bankruptcy court, the lawyer, Kenneth Krayeske, said the check is just a fraction of “upwards of $400,000 that Mr. Regensburger has had pass through his hands” within the “claw-back” period afforded to authorities in bankruptcy cases to research a debtor’s assets.

Prior to ruling, the judge asked a Department of Justice lawyer representing the United States Trustee, which oversees bankruptcy cases, whether federal lawyers are contemplating “any other form of action” in the case.

“I can’t comment further other than to say that the U.S. Trustee is processing the documentation that it’s receiving from Attorney Krayeske,” the lawyer, Holley Claiborn, replied. “Where that leads is yet to be determined.”

“Understood,” Manning said. “I’m just wondering if people are considering any other form of action other than actions before the bankruptcy court. In any event, you’ll all think about that and we’ll go from there.”

Neama Rahmani, a former assistant U.S. Attorney and the president of Los Angeles-based West Coast Trial Lawyers, said Friday that the bankruptcy trustee has “broad authority to investigate and prosecute bankruptcy fraud, if that is what is happening in the Regensburger case.

“Prosecutors take referrals from judges very seriously, so Regensburger needs to proceed with caution,” Rahmani said.

Regensburger could not be reached for comment Friday.

Some of the checks he cashed were signed by Gus Curcio Sr., a Stratford resident and reputed mobster connected to Keepers.

Krayeske has been trying to get Regensburger to pay a judgment won by the six dancers in a lawsuit saying they were not paid a minimum wage or for overtime while working at the club on Woodmont Road in Milford.

The state’s Appellate Court has been weighing an appeal filed by Keepers in the lawsuit for nearly seven months.

Regensburger, who is representing himself in the bankruptcy case, did not take part in last month’s bankruptcy hearing, but in a filing objecting to the case going on, he said Krayeske has “berated and abused” him while “on a mission to get blood from a stone.”

“The UST (United States Trustee) has enabled Attorney Krayeske’s circus show to go on long enough and there is clear evidence that Debtor does not have the assets in which the creditors are searching for,” Regensburger wrote.

Another objection to continuing the case came from Curcio, who was convicted of extortion in the 1980s, for whom Regensburger has several business relationships and has worked as a titular “figurehead,” according to deposition testimony.

Through a lawyer, Curcio, who is listed as one of Regensburger’s creditors, said that “no more of the precious resources of the Court need be expended on this particular case.”

But during the hearing Claiborn said that “there are other questions that need to be asked” of Regensburger.

“There are a number of checks that are either made out to cash or made out to Mr. Regensburger that require explanation,” Claiborn said, citing filings by Krayeske. “That’s an area of proper inquiry we need to follow up on to determine if it’s income to Mr. Regensburger or something else.”

She also said that extending the case would benefit all of Regensburger’s creditors — including Curcio, whose objection she called “unusual.”

Krayeske said the process is slow going because “Mr. Regensburger’s finances are inextricably intertwined with Mr. Curcio’s.”

He said neither has been very forthcoming in depositions in the case — and that Curcio invoked his Fifth Amendment right against self-incrimination more than 500 times under questioning, including when asked his date of birth.

“We are actively pursuing information in order to help us understand what assets are available to satisfy the creditors’ judgment,” Krayeske said.

Brian A. Pounds / Hearst Connecticut Media Keepers Gentlemen’s Club on Woodmont Road in Milford. Six exotic dancers at the strip club will have their claims of unfair pay reviewed by an arbitrator.