1978 SPECIAL REPORT: "STUDIO 54 COCAINE BUST"

[Music] i [Music] [Music] believing now [Music] is [Music] [Music] [Applause] [Music] this is [Music] conventionality belongs to yesterday there is a chance [Music] is [Music] this is [Music] belongs to yesterday [Music] [Music] is [Music] racism [Music] this is [Music] this morning we found 23 internal revenue agents who came into the studio at about 9 30 this morning ian schrager one of the partners came into the office i'm sorry uh they they followed him he was 23 agents came through the premises ian had with him a couple of books an appointment book a list of affairs that are booked in studio 54 no financial records the only thing the internal revenue agents will authorize to look for were financial records that claim has been dropped and no warrant and no complaint has been filed with reference to any internal revenue violation whatsoever instead they say that located someplace and then on some place in the business premises not in studio 54 itself was an envelope that contained five packets of cocaine this is by which the internal revenue agents think is cocaine but since they are irs agents not drug agents they're not sure as cocaine the magistrate before whom the case came released mr schrager on his own personal recognizance he was in and out of there in a matter of minutes it has absolutely no effect on studio 54 from a legal standpoint as far as mr schrage is concerned who is the only one against whom any complaint has been filed we are fully confident that that complaint is going to be dismissed at the moment we are struggling with the proposition of trying to restore the premises to the owners and to the public and to get more internal revenue agents and i know existence out of here [Music] which is the same thing that happens to 10 million american taxpayers except it's a little bit unusual when you send 23 agents up and come tearing into a place at 9 30 in the morning uh the financial books and records have been available their accountants and their lawyers have been available to the government at all times but drug enforcement people are now inside we know that why are they there thanks for telling me i know that so they're there because in the business office i think i just told you before it was found this envelope containing what they say were five small packets of cocaine is it a building neighborhood it's not happy at all but you realize when you're in the public eye sometimes that you know that these things happen it happened similar one thing once before with the liquor license and you realize that i'm not happy this happened i'm really upset that it happened but you realize these things happen and are you saying you're being picked on steve uh well i think that i'm being picked on certainly a lot more than i wasn't written any letter about any investigation 23 agents just came in we gave them everything we wanted when they came in they said well should we break open the safe we said we'll open the safe for you they said should we where that you will break open the doors let us open the doors for you uh uh you know i certainly don't think that this is a normal operating system why do you think they would be coming in here with a federal search warrant to look at your financial records uh why they would be coming because because we're in a public we're in a public spotlight and and everybody's saying how much money the place makes and things like that and and i think that it's you know and there's going to be a lot of publicity for you what about the president are you going to be open tonight we're definitely going to be open yes well there are no formal charges against studio in any way only one charge has been filed that's been against ian on something occurring in the business premises not on the premises again that's just what i told you about because they say that he was on the premises when they found this envelope with these five little packets of it was not in his briefcase they do not allege it was in his briefcase i've read the complaint and i was important what do you guys do it's it's just they're taking the boxes and upon the boxes up the place is in order i mean they're being a little tail at some point at the building but the place is in order it's no different than you so do you have anything do you have any drugs will be found on the premises or anything like that let me say that from a legal standpoint i'm sure that drugs are not going to be found on the premises but let me say this to you when you have uh over 100 employees when you have 2 000 people in and out every night and talking about any disco in the united states it would have to be the height of naivete to say that we can police what everybody has in his pocket or anything along those lines we've got a big security force we do the best we can we cooperate fully with the authorities but if you want a bond post that no one ever smoked a joint in a disco deck in the united states you're talking to the wrong guy because i think it's perfectly possible that could happen does this place distribute drugs or are they going to find heroin or quantities of this or that no of course same is this the first time yes jay please get in what about the liquor license or a federal judge getting involved to get these people out of here i mean it's still america it's not russia it's not nazi germany you don't take over premises in the course of an investigation by internal revenue 23 people with microphones pull them in by the truckload followed by television cameras and uh shut down the place in the middle of a tax investigation without one specific job we have a lawyer down there right now to get these people out of this place are you suggesting this is really a publicity stunt well you tell me one other instance in american history when 23 internal revenue agents at the beginning of an investigation before they even go to a company's accountants or lawyers come in and raid a place tear it to pieces open up everything in sight uh if that's ever happened before in america i've never seen it what do they tear to faces they don't have to show me the warrant i believe they have 500 warrants they got a warrant based on well you know what all the wires say the warrants say we've received the tip for an information and belief the place is making a lot of money well sure they're making a lot of money and they're reporting a lot of taxes period we're very confident with the internal revenue audit is finished that they're going to be fine and if they get assessed anything extra they pay what they're assessed but it still isn't an america it's not on the america we know when you send 23 internal revenue agents in and when i say wreck i'm saying just go up and down a place force the cancellation of a christmas party a parading up and down there speaking to each other with microphones uh it looks like a circus instead of an operation of the united states government why do you think the organized crimes i don't know that the organized crime task force is involved but let me say this we had this all out before the abc board which unanimously approved the license before the state liquor authority where the appellate courts unanimously ordered the issuance of a license there is no connection direct indirect any shape manner or form between studio 54 and organized unorganized disorganized or any kind of crime it's owned by steve it's owned by ian it's owned by jack there are no hidden incidents now there are no hidden interests there is no organized crime of any kind involved and they can investigate from now to doomsday and their investigation will confirm what i'm telling you there's one ring of money no concern with that at all that no this is something i'd like to say you know there's something about when people ask you a question like that that automates automatically makes your people think that that you know there's guilt implied by asking the question and uh you know just like asking that question there's an invitation to the public that it does exist and it doesn't exist at all what would organize crime what would be a relationship between first of all no responsible person has ever alleged a relationship between this place and organized crime we all know there are plenty of other places in the city where it exists as a matter of fact as far as this place is concerned it was built and financed by stephen ian for money they made in restaurant operations they have had successfully for many years there are no hidden interests in this organized crime thing which i have never heard even the government there's a lot of nonsense you're going to be open to tonight [Music] well i'm not about to fall on my face about something the justice department says but this is the first time anyone tells me that the justice department says organized crime is involved in 54. i don't believe they did say it well they said the organized prime task force was involved i don't know what tax scores are about three quarters of them have been dissolved uh there is no organized crime and we have never been notified of any investigation and we're really being a dead horseman because there's no allegations i'm not concerned about nobody likes an inferno nobody likes an internal revenue service uh nobody like that but i i accept that but i'm not concerned about it have you ever seen have you ever had any indications in the if they were looking at you in any other normal way [Music] no no i mean normal in the sense that when i first started on my restaurants i i you know i i went through all that and that stuff like that having to do with 50s before no i've never been personally ordered or um for the company or the company we have [Music] this is the first time i've ever heard of 23 internal revenue agents before they speak to a man's account lawyers or anything just coming in and walking into a place and staying in there all day long forcing the cancellation of a christmas party it's a little bit silly so it gives you no indication what the focus of your investigation is no we have not focused on anything we have no charges no absolutely not they obtained the warrant on a tax charge and dropped it in court today do you think this could have anything to do with what is said to be a recent wave of buying and acquisitions on the part of studio 54 buying into other businesses i well we're not buying everything we're doing is uh we we bought this building i think what he's asking in plain english is it because we're in a public eye i think of course in the public you know in the public eye you know when we came here there was an anonymous phone call that there was a a uh a shooting on 8th avenue 53rd street when i saw this newscaster this morning and they said there was an anonymous call it just seemed so set up i you know i don't like to think like that steve one other point i think you ought to make them tell them about the goals you've been getting to see it tonight we've been getting a lot of calls from a lot of people just being very supportive it's very nice and you know in in every area of life you know people who come here and uh you know unfortunately these things just something like this happens but i i [Music] some steak places he's negotiating for other restaurant chains but i still don't know that it's a crime in america for a guy who owns a restaurant to buy another restaurant and we'd love to you know we want okay it might be a crime in greece so do you think [Music] no i think that when you're in a public eye these things happen i think i accept them i think we'll be operating i think everything is okay i don't love that it happened but what about the firebox i don't know anything about that i really don't know anything about are there any other drugs on the premises i don't know anything about any other drugs did you know anything about drugs on the premises this time no i didn't absolutely what was your reaction period or did your partner been arrested for five hours i [Music] [Music] [Music] i feel like the president today did you see this primarily as a tax investigation yeah oh yeah it was attacked it was it was a it was from the uh tax uh irs is the only one who ever obtained any kind of a legal process in connection with this drug enforcement never has up to this minute now somebody said something about dea coming up with a warrant we've just one of my law associates just examined the wire and it's not a dda warrant it's another irs thing this thing has been all irs theory and in a highly unusual way but as i say it's uh just one of those things you have to put up with we have to meet and i think steve's concern has been that they've not been inconvenienced to the public so we're trying to let these gentlemen go back to their families or wherever they go back to and let the public have the place back again i think the marshals and some of the agents have grabbed both of their tickets by this night was it close tonight no we'll be open to that you know we're just trying to get the place we couldn't clean it up during the day because there were so many of them in there unfortunately they wouldn't let the regular workers in to clean up i mean some little uh 40 year old girl came in for a mother and they searched the answer is as far as anyone connected with studio 54 is this is not a warehouse for drugs it's a disco day if someone brings in drugs or someone has a joint in his pocket we try to prevent it we have a big security force but we can't give you a written guarantee as any disco tech owner in the united states could give you that that's never happened we say it's a clean well-operated highly successful place and it's going to stay that way anything anybody else wants to ask before i go except you yes it's the same question over and over [Music] no because they're all in there and uh they don't want anybody else in there they're in there yeah you're the owner right yeah i i i'd rather them get it done so i could get the place open tonight and get the people cleaning it up now to get ready for tonight [Music] as far as i'm concerned [Music] we have to fight to get a lawyer into this place i came into the front door to get in the first time yeah [Music] at all at all [Music] i'm not i don't want to go through this guy listen i'll be glad to take up with them the question of letting you call this one [Music]

Channel: Hezakya Newz & Films

Views: 30,614

Keywords: STUDIO 54, 1970S, STUDIO 54 DRUG RAID, 1970S NIGHTCLUBS, NYC NIGHTCLUB, NYC 1970S, ROY COHN, ROY COHN STUDIO 54, ORGANIZED CRIME, HEZAKYA, HEZAKYA NEWZ

Id: VTh3PRMmCp0

Length: 19min 48sec (1188 seconds)

Published: Thu Jun 03 2021