Strip club owner sues Small Business Administration for lack of coronavirus relief funds

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One business owner is hoping a lawsuit he filed last week against the Small Business Administration will lay “bare” what he says are the disparities in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Jason Mohney -- whose company, Little Darlings, operates more than 200 strip clubs across the country -- argues in his lawsuit that the categorization of his businesses as an operation of “prurient sexual nature” has excluded him from obtaining any relief under the CARES Act passed by Congress last month.

The suit, which also names SBA Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin, contends that the exclusion discriminates against his staff, who perform a legal and legitimate service.

“The purpose of these loans is to give money for payroll from businesses to their employees, so to do something like this is just shortchanging the employees themselves,” Mohney said, according to the Las Vegas Sun.

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It is unclear if the dancers at the exotic dance clubs are actually employees of Mohney, or independent contractors, as they are in most strip clubs.

Small businesses with 500 or fewer employees would have been able to borrow up to $10 million, officials said, adding that the loans would be forgiven if used to keep employees on the payroll for eight weeks, or if they were used for building expenses such as rent or utility payments.

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“As a country, we’re having some really important conversations about work and labor right now and it’s putting workers that perhaps have been marginalized front in center in our conversations,” said Lynn Comella, an associate professor of gender and sexuality studies at UNLV. “(Adult industry workers) also have to pay rent or pay their mortgage or support their families or buy car insurance and food.”

Mohney has previously tried creative approaches to keeping his clubs open, even including offering drive-through strip shows in Las Vegas for people seeking a little adult entertainment during the lockdown. The ploy was quickly ended when Gov. Steve Sisolak ordered Metro Police to enforce the shutdown order.

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The lawsuit comes as the state of Nevada has reported at least 163 deaths related to the coronavirus with almost 3,000 confirmed cases in Las Vegas’ Clark County alone, according to the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University.

Not all companies in the adult entertainment business, however, have been denied funding. Bella's Hacienda Ranch brothel owner Madam Bella Cummins received a notification that her funding application was approved for around $70,000, but the program had run out of money by then.

“It was a huge milestone because it’s the first time I was approved for anything associated with a grant or part of a package,” she said.

The Associated Press contributed to this report.