By Nick McKenzie and Cameron Houston
AMAD "Jay" Malkoun is no ordinary punter at the Spearmint Rhino strip club. By his own admission, the convicted heroin trafficker watches over the business for its overseas owners. "I have a close relationship with the owners and, in their absence, if they need me to go into the venue and keep an eye on the staff, I am happy to go there and and say g'day."
Under the state's licensing laws, a convicted criminal can't be linked to the operations of a strip club. But Malkoun says keeping tabs on the staff is no more than a friendly favour.
"I have nothing to do with its operations at all," he says.
Still, he's often there, amid the bumping and grinding, talking business with associates and chatting to strippers. They, too, have noticed his unusual status at the club in King Street in Melbourne's CBD.
"He's always there and pretty much runs the business," a former stripper says.
"Everybody knew him and anyone associated with him could do whatever they wanted in the club."
It is hardly a revelation that a known crime figure — Malkoun has been of interest to several law enforcement agencies since his jailing in 1988 for large-scale heroin trafficking — hangs out at a strip club. But the claim that Malkoun pulls at least some strings inside the venue adds to concerns, raised after the city shooting incident this week, that criminals have infiltrated several city strip venues.
The alleged actions of Hells Angels member Christopher Hudson, charged over the shooting, have no direct connection to the strip club industry, with police describing the incident as a domestic dispute that spiralled out of control.
Undoubtedly, the majority of strip club patrons are law-abiding citizens; sporting teams on a night out after a win, interstate businessmen finishing off a long lunch and bucks parties.
But some police and industry insiders say this week's shooting reflects a lesser-known element of the industry that is conducive to violence and flourishes in several venues. Hudson had been in Melbourne only a fortnight but was seen several times at Spearmint Rhino and is alleged to have assaulted one of its strippers at a venue next door before pulling out his gun on a city street.
Just three weeks ago, a group of Bandidos motorcycle gang members bashed three patrons at Showgirls Bar 20 in King Street.
In late 2005, a notorious armed robber allegedly threatened two strippers at Spearmint Rhino and left a bullet on the bar as a warning not to report the incident to police.
"Crime groups and bikies get a foothold in licensed premises and use it to distribute drugs," says one veteran investigator.
Security company owner and former police officer Naomi Oakley says some King Street clubs are favourite haunts for bikies. "That's always been the case with bikie gangs — amphetamines and strippers," Ms Oakley says. Several law enforcement officials who spoke to The Age say that certain criminals attach themselves to strip clubs, often to do business. But there is a disagreement as to whether it follows that better policing or regulation is needed.
According to a senior police source, "there is always a bit of sleaze, but it is not one of our priorities".
The owner of strip club the Mens Gallery and former president of the Nightclub Association, Peter Iwaniuk, dismisses as a media beat-up the suggestion of a link between criminal activity or violence and strip clubs.
"I am not aware of any gangs of bikies running around, standing over people. I am not aware of any heavy criminals standing over people; it is just not on. We are working very closely with the police. There is no criminal element in King Street to my knowledge," says Iwaniuk.
He insists the industry is well regulated by licensing authorities, who ban people with criminal backgrounds or who are deemed not "fit and proper" from running clubs. And there is nothing illegal about spending hours at a strip club.
A stripper can earn as much as $3000 in a night, depending on how many patrons pay for private dances, although "Jane" says her average earnings were about $500. "It's fantastic money, you don't make this kind of money doing anything else. The guys are generally pretty good and don't overstep the mark," says Jane, who worked for more than a year at Spearmint Rhino before moving to a new venue.
But she says drug use, or falling into the wrong crowd, is an occupational hazard many find hard to avoid.
"They don't do it (take drugs) for the physical requirement, it's more for the mental, because it helps to make you more confident. A lot of girls aren't comfortable and have to put up a wall and drugs help with that. The drugs are at every club, but it's pretty full-on at Spearmints and I'd guess that more than half (the strippers) are doing something," she says.
Not so, says the Men's Gallery's Peter Iwaniuk: "I find that totally false and she has led you astray … It is a joke, really, the way it has been portrayed."
Yet crime figures do maintain a presence at some clubs, often with a quiet nod from security. A former strip club owner told The Age that Malkoun helps keep the peace at Spearmint Rhino due to his ability to talk the language of unsavoury patrons who turn nasty. "Jay is pretty tough. He did 10 years in jail, trains in the gym all day. He is not scared to front people," the source says.
The owners of Spearmint Rhino could not be contacted and there is no suggestion they are involved in criminal activity or have any link to Malkoun, who denies having a security role at the club. In general, police and regulators view dimly the practice of keeping some crime figures in a club in order to keep others at bay.
Last November, the operator of Adelaide's Heaven nightclub, John Pike, was castigated in the South Australian Licensing Court for hiring a Hells Angels motorcycle club member, Angelo Pandeli, to "provide security against outlaw motorcycle club members".
The court heard a shareholder in Pike's company, albeit through his wife, was Anthony Sobey, the former head of the Gypsy Jokers bikie club.
Also named in court as shareholders were two Melbourne businessmen, strip club industry veteran Dominic Tenuta, who has no criminal record, and Paul Pavlovski, who received a suspended sentence in 1998 for cocaine possession.
Tenuta and Pavlovski, have previously shared interests in several Melbourne pubs and nightclubs, including the Metro Nightclub, which has since been sold.
Tenuta also owns the building that houses Spearmint Rhino, although he says he has no involvement in its operations. The club's licence is held by two US-born businessman who bought the rights to run a Spearmint Rhino franchise from the its American-based parent company.
The US company claims to market and control the Spearmint brand like an international clothing label. Its website states all Spearmint venues combine "the ambience of a five-star hotel with the world's most beautiful entertainers", while its chief executive officer, John Grey, boasts that gross sales per square foot in a venue "exceed any retail unit of a comparable size, anywhere on the face of the planet".
The corporatisation of the industry has also occurred locally. In January, the ASX-listed company Planet Platinum unveiled plans to franchise around Australia its Showgirls Bar 20 club on King Street.
Yet corporate gloss does not always mitigate the realities of the industry. The resignation of Planet Platinum's CEO, Andrew Harris, last year was partly due to his frustration at the demands of keeping undesirables away from Showgirls.
"I found the pressure of doing it non-sustainable. The pressure on the security company just became too intense," he told The Age this week.
"I naively stepped into an industry which is different to what I thought it was. And I have never been able to work out why there is such an interest of some people to passionately get into a strip club, whether they are allowed to or not."
Nick McKenzie is an Age investigative reporter. Cameron Houston is city reporter.