An Anchorage strip club is in danger of losing its liquor license amid accusations by state regulators and former employees of deceptive ownership and underpaid dancers.
Since last fall, Fantasies on 5th Avenue has been the target of an Alaska Department of Labor and Workforce Development investigation into minimum wage violations for dancers and other employees. In a February sworn statement, state labor investigator Donna Nass said 30 or more workers were underpaid between December 2013 and November 2015.
Nass also said the person listed as the sole owner of Fantasies, Travis Gravelle, had no control over the finances and operations of the business. State law says no one other than the owner of the liquor license can have a financial interest in the business.
Through an attorney, the club denied the state's charges.
"Fantasies expects that when the Alcoholic Beverage Control Board reviews the evidence concerning the Department of Labor's objections to the renewal of Fantasies' liquor license, the ABC Board will find that the DOL's claims are unfounded," Anchorage attorney Brian Stibitz, who represents Fantasies, wrote in an email.
The allegations are complicating Fantasies' efforts to renew its liquor license, which it won in 2008, though not without controversy. The Anchorage Assembly approved the license, but then-Mayor Mark Begich vetoed the Assembly's decision, citing the high number of police calls to the business. The Assembly then overrode his veto.
The Anchorage Assembly is set to make a decision on whether to protest the license at its meeting next Tuesday. Assemblyman Patrick Flynn, whose district includes Fantasies on 5th, called that decision "procedural," hinging on whether Fantasies had resolved the issues flagged by labor investigators.
If the Assembly protests the license, the ABC Board will automatically block the renewal, said Cynthia Franklin, director of the Alaska Alcohol and Marijuana Control Office. If not, she said, the board will weigh the labor department's opposition before deciding what to do.
She said that while state agencies often protest licenses on a conditional basis, this case is unusual because there's no expectation the labor department will lift its objection. Joe Dunham, statewide supervising investigator with the Wage and Hour Administration, said Tuesday the state's investigation is still open, and it's not clear if the matter will go to court.
Among the documents provided to the ABC Board are letters from four former employees who claim the business was breaking wage and hour laws. One former employee, Elizabeth Wilson, worked as a dancer there for three months in early 2015.
"Basically, they weren't paying us paychecks," Wilson said in a phone interview. But at the same time, she said, she was being charged a fee to work there, called a "house fee."
In a letter to regulators in December, Eugene Greaves, who is listed as the registered agent for the business and called himself the general manager, said the business wasn't violating minimum wage laws.
"Please understand that our dancers are neither employees nor outside contractors," Greaves wrote in the letter. "The dancers are tenants/entertainers, and sign a lease agreement to this effect."
In her sworn statement, Nass, the labor investigator, said her department "did not find that defense persuasive." She pointed to a 1987 Alaska Supreme Court decision and a 2012 Alaska District Court case that recognized dancers as employees entitled to minimum wage.
Kathleen Hartman, Gravelle's mother and the former owner of the club, was a defendant in the 2012 case. She was ordered to pay back wages of nearly $28,000 to one of the dancers.
The former employees also said Gravelle was a "figurehead" who was only nominally the business owner. They said the finances and business operations are controlled by Greaves and Hartman.
Hartman transferred ownership of the business to Gravelle in 2013. Gravelle has 100 percent ownership, according to state corporation records.
During a November meeting, state labor investigators pressed Gravelle for details on how taxes were reported and on the internal day-to-day workings of the business. Those questions included the shifts the dancers worked and rules and policies for employees, according to a sworn statement from one of the investigators, Charlotte Hughes.
Gravelle "fidgeted, looked uncomfortable and was apparently unable to answer any of these questions, particularly those that dealt with the routine operation of Fantasies," Hughes wrote in her statement. He also couldn't answer questions about how the businesses' taxes were filed, and said his mother handled his taxes.
By contrast, Greaves, the registered agent, appeared to be "extremely well-versed" in the business operations and frequently interrupted or stepped in to rescue Gravelle.
Greaves had told Nass, with the state labor department, that there was no point in Gravelle attending the meeting. He said Gravelle didn't know anything about the business, and further, had "no lick of business sense," Nass wrote in her sworn statement. He told her Gravelle was a "nominal owner only," and Greaves managed the club as a favor to Hartman, according to Nass' statement.
On a tour of Fantasies, Gravelle told the labor investigators he hadn't been in the bar for more than a year. He became far more animated when talking about his carpentry work, Hughes said in her statement.
In April 2015, in a court appearance unrelated to the state investigation, Gravelle said he'd worked exclusively in construction the past 10 years. He said he didn't have any business responsibilities for Fantasies, and his only involvement was repairs and refurbishing the bar and the building.
Franklin said it's unusual for a registered agent to be used when there's only one owner.
"The open question is, who's really running this place, who's really profiting?" Franklin said.
From the documents, that isn't clear. In December, Greaves told an Alcoholic Beverage Control Board investigator that he wasn't making any money.
"Greaves does not receive any money and only (is) helping out Kathy's son because of their friendship. He comes up every so often and inspects the place," the investigator, Joe Hamilton, wrote in an email to Franklin.
But Gravelle, in his court deposition last year, said he also made no money from Fantasies. An attorney asked him why his mother gave him 100 percent ownership of Fantasies, and Gravelle said he wasn't sure.
"Have you been paid anything out of there yet?" the lawyer asked. Gravelle said no.
"Not made a dime?"
No, Gravelle said. "I do my part and that's it." He said "his part" involved repairs and renovations.
According to Nass' affidavit and documents, Gravelle was not listed on the checking and merchant accounts for Fantasies, meaning he has no access to the business' money. Hartman, Greaves and an attorney, Lawrence Trotter, were listed as having access.
In a phone interview from California, however, Hartman said she had no involvement with Fantasies.
"Not at all ... I've not been (involved) for a very long time," Hartman said. Asked why the license was transferred to her son, Hartman declined to talk about it, citing "family matters."