Hilton Head strip club owner selling business after FBI probe

A federal investigation that centered on money laundering and racketeering in Gold Clubs across the country, including on Hilton Head Island, may not shutter the town’s sole strip club.

Gold Club owner Michael Rose, who pleaded guilty Jan. 25 to dozens of counts of money laundering and racketeering using his businesses, said this week he is selling his location on the south end of Hilton Head at the same time he launches a new adult entertainment brand, Millenium Cabaret.

A Stephanie Rose, whose relationship to Michael Rose is unclear, applied for a business license Monday for 1 Dunnagans Alley under the same name, Millenium Cabaret, owned by South Island Restaurants LLC, according to Bruce Seeley, the town’s inspections, collections and audits manager. A phone number for Stephanie Rose could not be found.

The town’s plans for The Gold Club are less optimistic.

Town attorney Brian Hulbert said he is looking into the FBI’s probe, which charged Michael Rose and several other business men in March 2015 with seeking to purchase more than five kilos of cocaine from an undercover agent they believed worked for a drug lord.

On Wednesday, FBI spokesperson Michelle Ernst confirmed money laundering took place at the Hilton Head location.

Hulbert said he was not aware of the investigation or criminal activity at The Gold Club prior to coverage of Michael Rose’s pleadings last week. He declined to comment further Wednesday, saying the FBI investigation would be considered during the review of the Millenium Cabaret business license application.

“We’ll treat this one with kid gloves,” Seeley said. “We want to make sure we’ve touched base with everyone we need to touch base with because of current events.”

According to the town’s municipal code, a license can be revoked or suspended if the holder has been convicted of an offense under a law regulating business, such as money laundering.

However, Michael Rose said earlier this week he would only operate The Gold Club on Hilton Head until the new owner — who he would not name — secured a permit.

The other business owner on the town’s current Gold Club license — Bill Thomas of Charlotte — was not among those charged by the FBI. Michael Rose, who is out of jail on bail and yet to be sentenced, says he has never co-owned the Hilton Head club with Thomas, who primarily owns adult entertainment clubs in North Carolina through his company MAL Entertainment.

While Michael Rose joined the operation on Dunnagans Alley in 2011, Thomas had run a strip club there since 2011, when it was called Thee Diamond Club, according to town records.

Michael Rose and Thomas did not respond to requests for comment Wednesday.

An adult entertainment business has operated at the Dunnagans Alley location since 1988.

Today, Hilton Head only allows adult entertainment businesses to operate in the Sea Pines Circle zoning district, and requires they meet a host of zoning conditions set by the town, such as not operating within 750 feet of a home, school, church or public land.

If The Gold Club closes, and remains closed for more than 18 months, it would be required to meet those conditions — and it would fail the test, says Teri Lewis, the town’s land management ordinance official.

The business is too close to town-owned land around the Dunnagans Alley-Arrow Road traffic circle, according to Lewis. No other new adult entertainment business may open on the spot.

Michael Rose says The Gold Club is not involved in the upcoming Millenium Cabaret partnership, which he announced on Twitter on Dec. 11.

“One of the biggest deals I have ever made in my life,” he wrote under the handle @goldclubmike. That venture launches Thursday, he said in another tweet.

“There was never a point where I had to think about whether to be or not to be in this industry,” he wrote in an email Monday. “I am very proud of the industry and have 2 decades of providing an exceptional business model and brand to the market place. Hilton Head is filled with very loyal residents who support local business and have been extremely supportive of this location for decades.”

Hulbert said he was consulting with the Beaufort County Sheriff’s Office to get more information about the FBI’s investigation.

Reached this week, Capt. Bob Bromage said the Sheriff’s Office was not involved and did not have knowledge of money laundering at the Hilton Head club.

Michael Rose is scheduled to be sentenced May 31, along with another co-defendant who pleaded guilty to multiple counts of money laundering on Jan. 5, according to court records.

Five others were charged in the Gold Club case in March 2015, including a former Myrtle Beach police officer and S.C. Highway Patrol trooper who allegedly promised to protect the drug shipments through their law enforcement connections.

Additional information on the Hilton Head club’s involvement was not available from the San Francisco FBI office, which handled the FBI case.

This story was originally published February 17, 2016 at 4:35 PM with the headline "Hilton Head strip club owner selling business after FBI probe."