Connecticut Strip Club Owner Sentenced to 16 Months in Federal Prison for Prostitution, Tax and Loan Fraud Schemes
Kenneth Denning, 69, of Holland, Massachusetts, was sentenced on October 13 by U.S. District Judge Victor A. Bolden in New Haven to 16 months of imprisonment and three years of supervised release, the U.S. Attorney's Office for the District of Connecticut announced. Denning owned and oversaw the Electric Blue, a strip club in Tolland, Connecticut, where he and his employees promoted and facilitated prostitution. According to court documents, the club — held by "Denning Enterprises," nominally owned by Denning's wife but controlled by Denning — operated from the 1990s until it was sold in January 2025. Dancers paid a "house fee" of up to $50 per shift and were encouraged to engage in commercial sex transactions with customers in private and semi-private rooms, including a "lap dance room," "VIP rooms" and "Champagne rooms"; customers paid a cash cover charge and a typically cash fee to use a room, then negotiated additional fees directly with dancers, often hundreds of dollars, which the dancers kept. Employees collected the club's cash in envelopes marked by source and kept it in a safe in Denning's office — money they called "Kenny's money" — used for business expenses and Denning's personal spending, including casino trips; on February 23, 2023, Denning deposited approximately $21,700 in cash at the Mohegan Sun Casino for gambling. Denning and his bookkeeper gave the club's tax preparer spreadsheets that purposefully omitted "Kenny's money." On March 16, 2023, investigators seized $45,421 in cash from the office safe, of which about $39,751 represented "Kenny's money" collected between March 2 and 15, 2023; by extrapolation, investigators calculated that nearly $3 million in taxable business receipts went unreported to the IRS for the 2020, 2021 and 2022 tax years. Denning also fraudulently obtained a pandemic Economic Injury Disaster Loan (EIDL): he falsely certified that the business did not "present live performances of a prurient sexual nature," characterized the club as "Eating & Drinking Places," and in July 2020 the club received $149,900 in EIDL funding, of which he almost immediately transferred $20,000 to his personal bank account. Denning was arrested on May 15, 2024, and on May 19, 2026, pleaded guilty to conspiracy to use an interstate facility to promote or facilitate prostitution, conspiracy to defraud the IRS, conspiracy to commit money laundering, and two counts of engaging in monetary transactions in property derived from unlawful activity. Judge Bolden ordered restitution of $549,999 to the IRS and $150,000 to the SBA, and Denning agreed to forfeit $1,525,842, including the $45,421 seized from the club and $1,047 seized from his residence. Released on a $250,000 bond, he must report to prison on November 17. The case was investigated by Homeland Security Investigations, IRS Criminal Investigation, the Connecticut State Police, the Connecticut Department of Consumer Protection's Liquor Control Division and the Massachusetts State Police, with assistance from the Willimantic and Manchester police departments, and is being prosecuted by Assistant U.S. Attorneys Robert S. Dearington and Alexis L. Beyerlein.
(Source: U.S. Attorney's Office for the District of Connecticut)
Source: U.S. Attorney's Office for the District of Connecticut
Published by GSM · USA (original Chinese edition)
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