Milwaukee Magazine

skin in the game

- Madison-based freelancer Steven Potter is a regular contributo­r.




EARNING A FORTUNE – and lots of headlines – IN THE



WITH THE CODE NAME “russian laundry.”

A couple dozen more women of varying shapes, sizes and skin tones – who haven’t yet shed their push-up bras – work the room, drawing the attention of men like metal to magnets. They go by stage names like Diamond, Savannah, Cherish and Mahogany. Some wear a lot of makeup, others only a little. Their attire isn’t suitable for outside, no matter the season.

Strobe lights flash as the chest-rattling bass of fast-paced dance music floods the multi-level room. The air smells of alcohol, cologne, perfume and something else – perhaps lust. Underfoot is custom-made carpet with a logo repeated every couple of feet and dozens of times in every direction. It says simply, “Silk Exotic.”

The ladies not on stage are linked up with men at the bar and nearby tables. The men are a mixed lot, their outfits ranging from T-shirts and jeans to bow ties and slacks. Most are middle-aged. Many are married.

Occasional­ly, one of the men will submit to a dancer’s sales pitch and the two will walk off hand-in-hand to the “fantasy couch room,” pausing briefly to check in with one of the many black-suited security guards, who collects payment. Inside the secluded room, the customer gets treated individual­ly to her pelvic gyrations that last as long as he’d like at the rate of $20 per song. When he returns, a smile stretches across his face.

Keeping that smile on men’s faces, and cash leaving their wallets, isn’t solely the ladies’ job. Ultimately, the responsibi­lity of keeping customers happy falls on Jon Ferraro.

“We’re selling a fantasy,” says Ferraro, one of the club’s owners and its operations manager. “Guys want a place where they can come and forget about their worries, and we provide that. It’s entertainm­ent.”

IN JUST OVER 13 YEARS, Ferraro and his partners have built the first Silk Exotic Gentlemen’s Club location in Milwaukee into an empire, with other clubs in Juneau and just outside Madison.

Ferraro isn’t shy to point out how his upscale clubs have changed the game in the state.

“We really raised the bar in Milwaukee, [and] we’re the trendsette­r in Wisconsin,” he says, noting the clubs’ clean, polished interiors and that his bouncers dress in suits.

“He’s got a good reputation,” says Jim Halbach, who owns two clubs in the state and is also the Wisconsin chapter president of a national trade group for strip club owners. “Really, everybody’s jealous of him because he’s really got a good club over there in Milwaukee.”

Ferraro says he’s unencumber­ed by the flesh he sees so regularly. “After doing this so long… it becomes like wallpaper, you don’t even notice them,” he says. “You’re not distracted, and it doesn’t do anything for you. You walk in there in business mode and you don’t even think about it. It becomes normal in a weird way.”

Among the challenges he faces, some are as mundane as dealing with new dancers who make a lot of money one night then don’t show up the next. Other problems are not so minor, such as the newspaper reports last year about his alleged involvemen­t – which he steadfastl­y denies – in a federal money-laundering case involving a former partner.

But chief among his problems, Ferraro says, is the recurring refusal by city aldermen to grant him an operating permit for a new club in or near Downtown Milwaukee.

He’s twice sued the city over it, winning the first lawsuit in 2015. Early last summer, the city paid Ferraro and his partners nearly $1 million in damages and lawyers’ fees in that case. The second lawsuit is ongoing.

AS A KID, FERRARO FIGURED HE WOULD work in the trades when he grew up. “I didn’t excel in school,” he says. “The only thing I really liked was math, so I thought maybe I’d be an electricia­n.”

Born and raised in the city, Ferraro – who’s as Italian as his name and thick dark hair suggest – grew up an only child in a Bay View house built by his great-grandfathe­r. He attended Immaculate Conception Elementary and graduated from Bay View High School.

He first held a job at 14, working at DeMarinis Pizzeria, the Menomonee Falls restaurant his parents bought in the early ’90s.

“I came up washing dishes, then cooking and barbacking and bartending,” he recalls. “I learned the system from the bottom up, found out it was something I liked to do and was good at it.” Then, some trademark modesty: “I was a natural.”

Over the years, Ferraro became friends with Joe Modl, owner of the bar game distributi­on company Northern Novelty, when he would come in to service the machines at DeMarinis.

“We were talking one day and I told him I’d really like to open a bar, so we literally drew up a business plan on a Cousins Subs





napkin,” explains Ferraro.

That idea on a napkin became the Bada Bing Social Club, a gangster-themed bar on 68th and Oklahoma, opening in 2001 when Ferraro was 25. Unknown at the time, the name they chose for the bar – taken from the fictitious strip club on The Sopranos – foreshadow­ed their future ventures.

“We absolutely crushed it there,” remembers Ferraro. But the partners would soon move on to better things. While helping a Northern Novelty client, Modl came across a copy of Exotic Dancer, a magazine for the strip club industry. He brought the idea of opening up such a club to Ferraro.

“We talked to some people and found out it could be pretty lucrative, so we jumped in head first,” says Ferraro, adding that their research included scouting out high-end clubs like Scores in Chicago. In March 2003, the partners found an old, shuttered teen dance club on West Silver Spring Drive just off Interstate 41, bought it and spent the next eight months overhaulin­g it. That November, they opened the doors of Silk Exotic Milwaukee.

A year later, they decided to sell Bada Bing. “We realized what the potential was with Silk,” remembers Ferraro. “I would lose more being at Bada Bing by not being at Silk and making sure that was right.”

The partners then made the decision to expand their brand. “I can’t sit still,” says Ferraro, who always speaks in short, quick sentences. “I enjoy building, developing and training the staff and getting it open. Once it’s up and running good, I’m ready to do the next spot.”

So, in 2006, they opened the second Silk location in the old Cocktails and Dreams strip club in downtown Juneau, directly across the street from the Dodge County Courthouse. At a licensing hearing, the attorney representi­ng the Silk partners was asked how sleepy, rural Juneau and its 2,000 residents could support a high-end club. “People will not hesitate to travel 30 to 40 minutes [to the club],” he answered.

Around this time, the partners converted unused space in the Silk Milwaukee building into Jokerz Comedy Club and Showtime Sports Bar, a partnershi­p with Milwaukee’s mixed martial arts champion Anthony “Showtime” Pettis.

Now with two strip clubs and other venues under their belt, the Silk team – which, in addition to Ferraro and Modl, also includes Scott Krahn – set their sights on another spot, opening the Silk Madison location in Middleton in 2009. “This place is just packed after Badger games,” says Ferraro.

Opening a new club is never a simple task. “With every location we’ve opened, [there’s been] the fear of the unknown,” he says of residents and elected officials who think that a strip club will wreck the neighborho­od. “But after a month or two or three, there’s no problems, there’s no issues, you just kind of blend in,” he says, adding that his clubs have tight security and that patrons keep themselves in check.

“Who wants to get a ticket for fighting at [a strip club]? No one wants their name in the newspaper for that,” says Ferraro. “It’s not a good story to tell the wife.”


On New Year’s Eve in 2015, a gun was fired outside the Milwaukee club. In that case, relatives of a dancer came to pick her up. For some reason, the relatives sent a pit bull to attack the dancer, who ran back into the club. A security guard shot at the ground and scared the dog away. That security guard, however, was not legally allowed to carry a firearm, as he had been convicted of a felony just a couple of weeks before.

This incident came to light in an alcohol license renewal for Silk in June of that year. Among those on the license committee, East Side Ald. Nik Kovac was not happy and grilled both Ferraro and his lawyer Michael Whitcomb about it.

“If this was a bar in a neighborho­od, we’d have a room full of neighbors talking about this incident and how they don’t feel safe,” Kovac said. “They have attack dogs and guns all because of bar employees.”

Ferraro, dressed in a gray dark suit and swaying a bit nervously, explained that all employees involved were immediatel­y terminated, but that didn’t appease Kovac, who moved to suspend the club’s liquor license. Kovac’s motion failed and Silk’s license was renewed with a warning.

Though important, safety isn’t the primary concern of the dancers – they’re here for the money.

“It gives me financial freedom,” says one dancer, a mother of two who subtly but repeatedly tried to entice me into a lap dance. “With the money I make here working two or three good nights when it’s busy, I can afford to spend the rest of the week with my kids. But I want to move on before my kids get [old enough] to know I do this.”

Ferraro says he has no trouble finding dancers. The night I’m there, two auditioned, were hired on the spot and worked the rest of the night. “What other job at 18 years old can you make between $100 and $1,000 a night? I can’t think where else you can make money like that where it’s legal,” he says.

Of the money the dancers make, a bit goes back to the club. Like your hair stylist who rents a chair at the salon, the dancers are independen­t contractor­s and pay a performanc­e fee on a sliding scale. The earlier they come in, the less they pay. Performanc­e fees can range from about $15 to $50 per night, they tell me. And of the $20 lap dances, the dancers keep $15.

The real payday for dancers, however, isn’t on stage or the lap dances – it’s in the super-secluded “champagne rooms” that sit off to the side and above the main stage area. It’s there where patrons with really deep pockets, such as traveling CEOs or sports stars, drop thousands of dollars in mere hours.

As you might expect, drinks at Silk are somewhat pricey. Bottles of beer will run you around $5 or more, and cocktails are between $6 and $8. “Sure it’s a bit more, but that helps keep the riffraff out,” says a bartender.

And patrons are willing to pay it. “I don’t mind paying the cover or the drinks being more,” says one balding, middle-aged and married customer as he takes a drag off a Newport cigarette in the enclosed courtyard area outside. “It’s like a special occasion to get a night out here. My friend’s wife took his kids and that never happens, so we’re here. The views are worth it,” he says, adding a warning: “But bring plenty of cash because the ATM fee is $10.”

As we’re about to head inside, a man in his mid-20s passes us to rejoin his friends outside. They scream “BRODY!” as he walks up in recognitio­n of his return from a lap dance. Asked if the special treatment he got was worth the cost, Brody, who’s blushing a bit, replies, “Oh yeah, definitely.”

The extra costs and style of entertainm­ent aren’t the only difference­s between Silk and other nightclubs. There are different rules here. For one, there are no photos taken inside the club, as the DJ announces regularly. Another is that women, even a group of them, can’t come in without male counterpar­ts.

“Some women want to come in and they’re just looking to have a good time,” says general manager Perry Welk. “But there are also other women who come in looking for their husbands because they think he’s doing something he shouldn’t be doing. So, we ask that the female customers who come in are escorted by a male companion.”

Also, while they’re encouraged to get to know customers, dancers cannot give out their phone numbers. Former Silk dancer Marta Maria Maldonado learned that rule the hard way and was fired for violating it in November 2016 after three years at the club.

She says she would give out her number sparingly and only to draw in business. For those who she had numbers for, “when it was slow, I would text them to come visit and they would come,” says the mother of two who now takes her act to Chicago and Miami.

AFTER BEING DENIED LICENSES FOR liquor and nude dancing at a couple of different locations, Ferraro filed his first lawsuit against the city in 2010.

As that lawsuit made its way through court, he and his partners pressed on, applying for new licenses at new locations, only to again and again be rebuffed by the council’s licensing committee. Council members cited strong opposition from residents and business owners at hours-long proposal hearings for their continued refusals.

While the initial litigation was still in process, Ferraro filed another lawsuit in 2012, with similar reasoning, over the newest set of license applicatio­n denials. His argument in the lawsuits is that the city’s constant denials infringe on his First Amendment and civil rights to open a business of his choosing.

In 2015, a federal judge ruled in the first lawsuit that Milwaukee’s ordinance was unconstitu­tional, and a jury awarded the Silk partners $435,000 in damages. After negotiatio­ns over attorneys’ fees, the City of Milwaukee cut a check for about $968,000 to Ferraro’s team.

The deputy attorney defending the City of Milwaukee, Adam Stephens, says the ordinances at issue in Ferraro’s first lawsuit were to blame for the loss. “It was a completely antiquated ordinance that really wasn’t used in any substantiv­e way,” says Stephens, adding that in 2012 the city re-wrote and updated its ordinances and he’s certain the city will prevail against the second lawsuit.

At the public hearings, concerns from the public about Ferraro’s club license applicatio­ns have centered on “negative secondary effects [a club may bring], like traffic, parking, crowd control, trash, noise, litter,” says Stephens. Ferraro is optimistic he’ll someday open a Silk location in Downtown Milwaukee but knows if and when that happens, the club will be under close watch.

“If someone slips on a banana peel a block away, we’ll probably get blamed for it,” he says. “We know going in that we have to run it clean, and we’re not scared of that because that’s what we do, that’s how we run all of our clubs.”

Among the aldermen citing resident and business concerns for not allowing a Downtown strip club, there remains one who believes the city should – and will eventually – allow it.

“A Downtown club is going to happen eventually, it’s just a matter of when. I think the issue right now is who’s going to run it,” says Ald. Mark Borkowski, who took office after both lawsuits were filed and adds that he would’ve voted in favor of allowing a Downtown club run by Ferraro. “Jon and his team clearly had the inside track because of a lot of legwork that they all have done and they have Silk … but things have changed.”

THOSE “THINGS” THAT ALD. BORKOWSKI IS referring to are last year’s news reports that Ferraro was allegedly connected to – and even possibly indicted in – a money laundering case in California.

According to stories in the Milwaukee Journal Sentinel in August 2016, Ferraro’s cell phone messages were tracked and he was indicted in an FBI investigat­ion that convicted a number of strip club owners, including a man Ferraro once partnered with to open a now-closed club in Las Vegas. The investigat­ion’s larger target, the Journal Sentinel and other media reported, was the Russian mob.

Among other things, the Journal Sentinel articles speculated that Ferraro may be a defendant listed not by name but only as “under seal” in court documents related to the investigat­ion, which was called “Russian Laundry.” “The Journal Sentinel could not verify the defendant listed as ‘under seal’ is Ferraro or determine why his name does not appear on the docket in the California case,” one article states. It goes on to say that “it’s unclear from the records if Ferraro was arrested with the others.”

Milwaukee Magazine could not independen­tly verify any of the claims made in the Journal Sentinel reports, as the court documents the newspaper cited have now been re-sealed. Further, no one involved in the case would discuss it.

When asked if Ferraro was indicted or was the defendant listed as “under seal,” public informatio­n officer Abraham Simmons of the Northern California district U.S. Attorney’s office, which prosecuted this case, replied, “I don’t know, and I couldn’t say even if I did.”

Simmons sent Milwaukee Magazine the case’s court docket, a document tracking the timeline of the case through court proceeding­s, which showed that all of the defendants in the case, except the under-seal “Defendant (6),” had been sentenced. When asked if or when the case would be concluded, Simmons replied, “[It] looks like it’s almost done.” Later calls to Simmons to inquire further about the case were not returned.

Ferraro denies any involvemen­t and wishes the whole thing would disappear. “I really don’t want to talk about that at all. I don’t want to revisit that,” he says. “It’s caused a lot of headaches and problems and calls from people – banks calling me – and look, I’m not indicted.”

“Pretty much, I had a club in Vegas with a partner and the partner got in trouble and they kind of played some games and dragged my name through a bunch of shit,” he continues. “They mentioned my name but it’s my [former] partner [who] is the one who got indicted and is the one who’s in prison right now.”

When pressed for more details, Ferraro ends the conversati­on, citing possible forthcomin­g litigation involving the case or newspaper articles. “My attorney is working on it,” he says, refusing to explain further.

As far as the money-laundering case affecting Ferraro’s future Downtown club applicatio­ns, deputy city attorney Stephens says only a conviction could affect licenses and renewals. “An arrest or a charge is not sufficient to deny a license,” he says.

FERRARO OFTEN FINDS THE NEED to blow off a little steam, and tries to hit the gym for kickboxing practice almost every day.

“It gets your mind off things for awhile to get in the ring,” he says. “I’ll do some sparring [and] boxing to clear my head.”

Away from the flesh and noise of his business life, he shares a $760,000 house in the Taylor Woods subdivisio­n of Menomonee Falls with his pit bull terrier, Alice. In the garage, he’s got a Cadillac Escalade and a Maserati.

Las Vegas is his favorite getaway. “It’s the city that no matter what you want at any time of the day, you can have it,” he says. “There is no time there.”

On some of his out-of-state trips, Ferraro meets up with Phil Hellmuth, a world poker champion he met at the card tables more than a decade ago. Hellmuth describes himself as “famous for never cheating on my wife.” And Ferraro? He’s “very single,” Hellmuth says. Neverthele­ss, the two have a close bond built on friendly competitio­n. Recently, Hellmuth invited Ferraro to join him on the set of the high-stakes crime drama Billions as an extra. “Being on the set for 17-hour days is not that glamorous, and for what we got paid, you’re better off working at Taco Bell,” jokes Ferraro.

Whether it’s swimming races in the pool, betting on golf or playing cards, Hellmuth says Ferraro is a man of his word who pays his debts: “He does what he says he’s going to do. If he says, ‘I’m going to meet you in Chicago next week,’ he’s there.”

AS SATURDAY NIGHT BECOMES Sunday morning, a countdown clock appears on the stage’s main screen alerting the few customers left that closing time draws near. The staff moves around quickly tidying up, pushing in chairs and wiping down tables.

Having spent hours balancing in high heels, the dancers are spent. Many of them make the rounds one more time, asking the remaining men for tips. Some of the dancers carry clutches or small bags bulging with cash.

“You tired, honey?” one of the dancers asks me. I nod. “Me too, but I’ve still got to drive home to Illinois,” she says. Of course, I ask if her long drive is worth it. “Usually,” she answers, adjusting her tight-fitting, bright pink bra and matching underwear. She’s clearly ready to change into something more comfortabl­e. “It wasn’t too busy tonight, but other nights will make up for it.”

As I close up my notebook and take one more glance around, she gives me a wink. “Make sure you come back soon,” she says. “And bring your friends.”

 ??  ?? Jon Ferraro in Silk Exotic, the business he knows best, taking a brief break
Jon Ferraro in Silk Exotic, the business he knows best, taking a brief break

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