Farmington Hills Man Sentenced to 1 Year for Fraud

A Farmington Hills man who owns strip clubs in Dearborn and Detroit has been sentenced to one year and one day in prison for fraud, the U.S. Department of Justice and IRS announced Thursday.

Nicholas J. Faranso was sentenced by U.S. District Court Judge John Corbett O’Meara in the Eastern District of Michigan.

Faranso was indicted on April 7, 2010, on one count of conspiracy and three counts of filing false corporate and personal tax returns. He pleaded guilty to the conspiracy charge on Jan. 12.

Faranso was the owner of BT's Executive Club in Dearborn and Tycoon's in Detroit–both long-standing strip clubs in metro Detroit.

According to the court, from 2001 to 2004, Faranso used a computer software program called Journal Sales Remover to remove a portion of actual sales from his businesses' computerized point-of-sale systems. The system was sold to him by self-employed computer software salesman Theodore Kramer.

The program made it appear as though Faranso’s clubs received less income than they actually did.

During those three years, at Faranso’s request, Kramer made periodic visits to Faranso’s clubs to run the Journal Sales Remover program to remove a substantial amount of the actual sales from the computerized sales systems. Faranso then provided the reduced sales figures to his accountant. As a result, Faranso falsified the clubs’ tax returns by understating their gross receipts by more than $500,000.

Kramer previously pleaded guilty to one count of conspiracy on Nov. 17, 2010.

According to the Detroit News, 53-year-old Faranso used the skimmed funds to pay for grooming and veterinary care for his dog, Pebbles, as well as his four daughters' private school tuition–and a $1,492 photo of his daughters.

In addition to the prison term, Faranso was sentenced to two years of supervised release and ordered to pay $6,000 in restitution.