Multiple people have been charged in connection to a prostitution probe at Electric Blue Café in Tolland, and a new indictment is shedding light on what happened.
An indictment returned by a federal grand jury states that Electric Blue strip club employed dancers who performed nude dances and lap dances for customers.
The establishment's owner, Kenneth Denning, 67, of Holland, Massachusetts, was arrested along with two employees - Joshua Baker, 41, of Willimantic, and William Mayo, 41, of Manchester.
Denning owned and oversaw operations at Electric Blue, Baker was the club manager and bookkeeper, and Mayo was employed as a bouncer. He was primarily responsible for hiring dancers, many of whom weren't legally authorized to live or work in the country, according to the indictment.
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State police and federal agents searched the club at 62 Merrow Road in March of 2023 after suspecting prostitution and sexual activity at the establishment. Days after being shut down, Electric Blue reopened.
The indictment says that Electric Blue had a "semi-private lap dance room" and "VIP rooms" where dancers would perform commercial sex acts for customers. An entry fee would be paid to use the room, and another fee was given to the dancers, authorities said.
The club collected cash through cover fees paid at the door and fees paid by dancers to perform there, the indictment reads. The cash, referred to as "Kenny's money," was then placed in a safe in Denning's office. He allegedly used part of the money for personal expenses including costly casino trips.
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The document states that Denning and his bookkeeper provided false information while filing taxes by excluding nearly $6 million in income obtained through commercial sex acts. Because of this, Electric Blue underpaid more than $2 million in taxes, the indictment states.
Authorities said the owner also fraudulently received a loan of $150,000 with 2020 pandemic relief funds.
State police and the Tolland resident state trooper have been conducting a months-long criminal investigation into the strip club. The resident trooper notified the town that investigators believe that prostitution and sexual activity have occurred on the premises for several years, up until present time.
The club's director of operations previously denied prostitution and human trafficking allegations, claiming that all dancers go through a verification process and sign a contract prohibiting them from performing any sexual activity.
After being notified of the investigation, Tolland suspended the club's license to operate for 30 days, but that was quickly put on hold after an appeal was filed.
Denning, Baker and Mayo were all arrested on Tuesday. They face charges including conspiracy to file false tax returns and unlawful employment of aliens.
The club's owner faces several other charges including aiding and abetting the filing of a false tax return, wire fraud and more.
Any employee or dancer at Electric Blue that has been a victim of unlawful acts is asked to contact the U.S. Attorney’s Office Victim Advocate at usact.vns@usdoj.gov or 203-696-3039.
After the arrests, the town is looking to see if any code or ordinance was violated and if so, Electric Blue would be shut down.
“The crimes are alleged. But if, if we can if they have violated ordinance or code and we can shut them down, we will," Tolland Town Manager Brian Foley said.
NBC Connecticut has reached out to Electric Blue for comment but has not yet heard back.
Homeland Security, IRS Criminal Investigation Division, Connecticut State Police, CT Department of Consumer Protection – Liquor Control Division, Mass. State Police and several other agencies were involved in the investigation.
