Hilton Head adult club owner pleads guilty to money laundering

A co-owner of a Hilton Head Island adult entertainment club has pleaded guilty to racketeering and money laundering in connection with a Myrtle Beach criminal enterprise.

Michael Rose, an owner of the Gold Club chain with a location on the south end’s Dunnagans Alley, pleaded guilty Jan. 25 to 108 of 132 counts of racketeering, money laundering, conspiracy to commit money laundering and conspiracy to possess with intent to distribute more than five kilograms of cocaine, according to court documents filed in a California federal court.

The Gold Club has had locations in several cities across the country, including in Myrtle Beach, Greensboro, N.C., San Jose, Calif., and Las Vegas.

Business owner Rose is listed as a co-owner of the Hilton Head club with Bill Thomas, according to business license information provided by Faidra Smith, a spokesperson for the town of Hilton Head.

Adult entertainment businesses have operated at 1 Dunnagans Alley since 1988, though the Gold Club did not open there until 2011, according to town records.

That’s the same year Rose and others began working with an undercover agent, who they believed to be a drug lord, to launder $2.3 million through the Gold Club and various Myrtle Beach area nightclubs and restaurants, according to the FBI.

The laundering continued through early 2015.

Rose sought to have the charge dismissed in September, based on “outrageous government conduct” and lack of evidence that he was considering committing a crime before the agent approached and “pressured” him.

“Quite literally, from start to finish, all of the alleged criminal activities were government creations,” his lawyer argued.

Judge William Alsup denied Rose’s request, and noted that despite any initial reservations of working with the agent, Rose eventually participated in the criminal enterprise, MyHorryNews.com reported.

“(Co-defendant Vladimir) Handl and Rose depict themselves as innocent and naive saps preyed upon by a government bully,” Alsup wrote. “The record, however, shows otherwise.”

Still, Alsup also criticized the multi-year investigation, which created the criminal enterprise based on lies, according to MyHorryNews.com.

“One can rightly ask whether the FBI should be out solving real crimes already committed by real criminals rather than encouraging innocents to commit manufactured crimes,” Alsup said.

Rose, who is out on bail, is scheduled to be sentenced May 31, along with a second Gold Club co-defendant who pleaded guilty to multiple counts of money laundering on Jan. 5, according to court records.

A third defendant is set to be sentenced in May.

Seven 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.

The corporate defendant PML Clubs, Inc. — through which Rose operated Gold Club locations and other enterprises — could face a maximum fine of $250,000 for each racketeering-related counts and $500,000 for each count of money laundering, according to the FBI.

Rose faces up to 10 years in prison for each property offense and a maximum 20-year term for conspiracy to possess cocaine with intent to distribute.

Attempts Thursday to reach Rose, Thomas and Rose’s attorneys Solomon Wisenberg of Nelson Mullins Riley Scarborough LLP. in Washington and Daniel McCoy in Myrtle Beach for comment were unsuccessful.

This story was originally published February 11, 2016 at 3:59 PM with the headline "Hilton Head adult club owner pleads guilty to money laundering."