This article was last modified on December 31, 2018.

Silk, Milwaukee’s Mobbed Up Strip Club?

Michael Rose said he met Jon Ferraro through a mutual friend in 2006 or earlier. Already experienced in the strip club business, Rose agreed to act as a consultant to Ferraro, who was planning to open the first Silk on West Silver Spring Drive, on Milwaukee’s northwest side. Rose attended the opening of the first Silk and helped Ferraro on Silk locations that later opened in Juneau in Dodge County and Middleton outside of Madison.

Ferol LLC was created May 16, 2009. On May 29, 2010, a second business, Six Star Holdings was created.

In February 2012, Six Star and Ferol filed an amended and supplemental complaint that challenged the theater and public entertainment club ordinances, as well as continued to challenge the tavern and tavern-amusement ordinances. However, in March 2012, the City repealed the theater, public entertainment club, and tavern-amusement ordinances and at the same time enacted a new ordinance governing “public entertainment premises.”

In August 2013, U.S. District Judge Lynn Adelman ruled that Milwaukee’s 1920s-era ordinances governing theaters were unconstitutional. If Ferraro could prove he was serious about opening a club, he could be entitled to damages, Adelman ruled. In the trial, Silk’s attorney Jeff Scott Olson asked the jury to award up to $1.3 million, based on lost revenue. The city asked the jury to provide no award.

In September 2013, Rose proposed laundering money in a new club, “investing $200,000 into a new club that Rose was developing in Las Vegas.” After the agent told Rose his client couldn’t openly invest in Rose’s new club, Rose assured him that the “client’s investment would be secret and that he would pay the client 12% of any profits as false expenses for services that we not actually performed.” The cash was provided by an undercover FBI agent posing as a businessman trying to launder cash, according to federal court documents. A cellphone warrant filed in Milwaukee says Ferraro began talking to the undercover FBI agent in September 2013, the same month Rose was proposing to launder money through the new club in Vegas. Ferraro exchanged three dozen text messages and phone calls over the next 18 months with the FBI agent, according to the warrant.

Ferraro and Rose were named in a tavern and liquor license application for a Gold Club in Las Vegas, which was approved in May 2014 by officials in Nevada’s Clark County. The club was at 6370 Windy Road, between the airport and Interstate 15. Ferraro chronicled plans to open the Las Vegas club on his Instagram and Twitter accounts. Rose said he and Ferraro had agreed to open a club geared toward locals and tourists and not try to compete with the bigger, high-end clubs in Vegas. But as the opening neared, Ferraro wanted to change the business plan and to try to compete with the bigger clubs, Rose said. Rose declined to give details, but he said they involved pricing and it was a significant dispute. “It was like you set up a business to sell pizza and then you change and want to sell tacos,” Rose said. The club closed in summer 2014, about six months after it opened, “due to a lack of capital,” Rose said. When the business closed, Rose said Ferraro owed him money and the relationship between them soured.

A federal jury on February 19, 2015 awarded Silk Exotic owner Jon Ferraro (through his company, Ferol) $435,500 but did not clear the way for Silk to open a club downtown.

Ferraro was indicted along with Rose and others by a federal grand jury in San Francisco on February 24, 2015, but Ferraro’s name was not listed in court documents in California. His indictment would not become public for over a year.

A federal appeals court on April 13, 2016 upheld a $435,500 jury award in favor of a nude dance club owner who claimed the city of Milwaukee violated their rights during efforts to open a club downtown. “This case requires us to visit the world of strip clubs —establishments that no one seems to want, officially, but that are somehow quite lucrative,” wrote Judge Diane Wood in the opening line of a decision by the 7th U.S. Circuit Court of Appeals. “The City is fighting a losing battle over a regime whose time has passed,” Wood wrote for a three-judge panel.

City officials approved a nearly $1 million payment to a strip club owner who has been fighting for years to open a new club downtown. Milwaukee Mayor Tom Barrett signed off on the deal Thursday, July 14, 2016, just over a week after the city’s Common Council voted unanimously to approve the settlement. The nearly $970,000 payout to Silk Exotic comes about a month after Milwaukee’s city attorney urged aldermen to authorize the deal to avoid further legal fees.

“Should the city continue to litigate the attorney’s fee award, attorney’s fees will simply grow,” City Attorney Grant Langley wrote last month in a letter to aldermen. “There is not a reasonable likelihood of success for continued appeal of the fee award.” Langley’s June 8 letter also noted that his office had defended the case for more than five years.

Ferraro pleaded guilty on October 4, 2016 to felony charges of “conspiring to conduct and to participate in the conduct of the affairs of the racketeering enterprise” and “conspiring to conduct money laundering.” “The defendant admits that these facts are true and correct and establish his guilt beyond a reasonable doubt,” his plea agreement reads. As part of his plea agreement, Ferraro agreed to “fully and completely cooperate with the government in its investigation of this and related matters, and to testify truthfully and completely before the grand jury and at any subsequent trials or proceedings, if asked to do so.”

April 1, 2019: The co-owner of a downtown Milwaukee strip club is a key figure in a federal investigation into sex trafficking, money laundering and torture involving a club he owned in Dodge County, newly released court documents show.

Radomir Buzdum was the owner of TNT Gentleman’s Club in Lebanon, which he said has closed and is for sale. He co-owns Silk Exotic strip clubs on Old World Third Street and in Middleton. Silk is trying to open a second downtown Milwaukee location, “Silk on Water,” at 144 E. Juneau Ave.

Two people have been indicted in the case. Christopher Childs, 46, of Hartford, faces federal charges in Milwaukee of sex trafficking involving force, fraud and coercion and conspiracy to engage in sex trafficking. Jennifer Campbell has also been charged with conspiracy to engage in sex trafficking.

Buzdum has not been charged, but he acknowledged in an interview with the Journal Sentinel that he is under investigation. Court documents make it clear that investigation is ongoing.

Search warrant applications targeting both TNT and another Dodge County strip club became public in March after being filed in federal court.

Affidavits by an FBI agent filed to support the warrants show the investigation involves Childs — who is accused of being a pimp — as well as Buzdum. They show it also involves Donald Raffaelli and Michael Siegel, owners of the Hardware Store in Clyman. Siegel was also president of the Village of Clyman but resigned from his post in April 2018 after Childs was indicted.

“According to Victim 1, the owners and managers of the clubs preferred to hire dancers with pimps because they would work any shifts required of them, show up on time, and bring in additional high-spending clientele who wanted to buy sex in the champagne rooms,” FBI Special Agent Heather Wright wrote in one affidavit.

“Dancers with pimps generally had a greater motivation to earn as much money as they could because of their pimps’ demands, and the club profited from this arrangement because they took a cut from each champagne room service,” Wright wrote.

An affidavit says that “the owners, managers, and employees of TNT and the Hardware Store knew of, facilitated, and profited from Childs’ sex trafficking offenses.”

The affidavit adds: “The investigation is continuing into specific conduct by the clubs, their owners, and their employees, related to their interaction with and assistance to Childs and other pimps engaged in sex trafficking at the clubs.”

Investigators are also looking into “possible money laundering and other financial crimes related to the proceeds of sex trafficking generated at the clubs.”

Timothy Miller, a former manager for TNT, told investigators that Buzdum paid dancers at TNT to have sex with him, according to an affidavit.

“Miller stated that Buzdum was fully aware that TNT’s dancers were performing acts of prostitution in the champagne rooms because Buzdum himself would pay for sex with the dancers,” it says. “Buzdum had Miller give the dancers money for sex acts out of TNT’s income at the end of the night, and disputes would arise between dancers who were compensated disparately.”

Another witness — identified as Cooperating Witness #3 — told investigators that Buzdum “would get drunk and have sex with the dancers” at TNT and “would tell these women that he was going to pay them and then either pay them less than what he promised or not pay them at all.”

That witness said TNT got a cut of all champagne room fees and would regularly charge customers’ credit cards amounts like $500 — even though the regular price was $200 — and provide customers the difference in cash “so that they could negotiate and pay for sexual services directly with the dancers.”

Court documents say there is probable cause to believe that “TNT, its owners, and its managers benefited financially from participation in a venture that involved sex trafficking” and that they “laundered the proceeds of that unlawful activity.”

At least two women who accused Childs of forcing them to work as prostitutes for him said the owners and managers of the Hardware Store, including Siegel’s brother William, employed a ‘”don’t ask, don’t tell” policy regarding violent behavior by Childs and other pimps.

“Victim 1 also saw a pimp give money to William Siegel to ignore him as he beat one of the dancers on the dance floor,” an affidavit reads. “Victim 1 stated that if a pimp paid Mike or Bill Siegel $150 to $200, they would turn a blind eye to any violence.”

The phone number for the Hardware Store has been disconnected, and the Watertown Daily Times reported that the club closed down in January. Seigel could not be reached for an interview.

Court documents in the case portray Childs as a pimp who was frequently threatening, abusive and violent.

The investigation started after a woman told law enforcement officers she was a victim of human trafficking and that Childs had forced and coerced her into working as a prostitute, “most often in the ‘champagne rooms’ at TNT or the Hardware Store,” Wright wrote in one affidavit.

That woman told detectives “Childs demanded that all proceeds from the prostitution dates as well as any proceeds made from dancing at the strip clubs be provided to him,” Wright wrote.

She also said that Childs would beat and sexually abuse her and his other “girls,” even as he told her he was “less violent” with her than he had been in the past.

“Childs told Victim 1 that he would make his girls sit in bathtubs filled with ice for hours, and that he made one victim sleep outside in the snow,” Wright’s affidavit reads. “Childs also explained that on the first night of recruitment, Childs would beat a new girl particularly violently to determine whether she could withstand future beatings and be ‘worth keeping.’ ”

She also told investigators that he controlled all aspects of her life — including forbidding her from eating fast food, the documents say.

“Victim 1 described physical punishments that Childs inflicted or threatened for violating these rules, including beating her, making her sleep on the bathroom floor … and forcing her to insert painful objects into her vagina,” one affidavit says.

The same victim said it was common for dancers who had a pimp to show up with bruises, according to affidavits.

A second woman who said Childs was her pimp echoed those descriptions and told investigators he had beaten and urinated on her for violating his rules, the documents say.

A third woman who said Childs was her pimp told investigators she would cover the bruises Childs gave her with makeup, adding that she had once gone to the hospital after being beaten by him.

And a fourth woman who identified Childs as her pimp said he made her work 15-hour days at the Hardware Store, records show.

Childs is also accused of trafficking at least one of those women at the Geisha House in Madison, and had wanted to send her to Las Vegas where he believed he could make more money off of her, according to the documents.

The owner of the Geisha House did not immediately respond to a request for an interview.

One affidavit includes a Facebook exchange in which Childs spelled out his rules.

“Following my rules, working hard, dedicating your self to me and this life, doing everything your told with no question,” Childs wrote. “Rules: gotta call me daddy, no arguing or back talking, do what I tell you no matter what, no talking to or looking at any other pimps.”

Women who tried to leave faced threats of violence, according to the records.

“You are mine,” he wrote one woman, according to affidavits. “You gave yourself to me and I’m not getting rid of you.”

When told there was nothing he could do, he reportedly wrote back, “There’s a lot I can do and if you’d like me to show you I will.”

Childs’ attorney, Daniel Sanders, declined to comment. Campbell’s attorney, Ronnie Murray, did not respond to a request for an interview.

This case involves the Federal Bureau of Investigation, U.S. Department of Labor’s Office of Inspector General, the Internal Revenue Service, Dodge County Sheriff’s Office, Hartford Police Department, Racine Police Department, Department of Homeland Security, Milwaukee Police Department and the Wisconsin Department of Justice’s Division of Criminal Investigation.

Buzdum distanced himself from Childs in an interview with the Journal Sentinel.

“I didn’t even know the goofball,” Buzdum said. “I just knew of him. I owned the club. I never ran the club, I never went there. So I knew of him, but I never talked to him.”

Buzdum insisted he “had nothing to do with any of this,” but confirmed that he is under investigation. On Jan. 24 “about 100 agents” raided three locations linked to him, including his Watertown home, TNT and the Dew Drop Inn, a bar he owns in Watertown, Buzdum said.

“The feds came through with search warrants at 6 o’clock in the morning, pounding my door down with 12 armed guys with women, dogs, and helmets,” Buzdum said. “They came to my house at 6 a.m. and busted my side door, threw one of those bombs in there — flash bombs.”

Buzdum said he would have never knowingly allowed pimps to operate out of his club and was “shocked” when he read the allegations against Childs.

He blamed Miller, the former TNT manager, saying he should have never trusted him to run the club.

“It’s just horrible what went on,” Buzdum said. “I had nothing to do with any of this.”

After years of legal battles with the city, Silk Exotic opened its downtown Milwaukee location on North Old World Third Street in May 2018. The owners include Joseph Modl, Scott Krahn and Buzdum.

When Buzdum and the other Silk Exotic owners applied for their Old World Third Street liquor license with the City of Milwaukee, they vowed to combat sex trafficking.

“As responsible club owners, it’s our intent to join the vigilant ‘eyes and ears’ of the community against human sex trafficking,” they wrote.

Silk is trying to open a second downtown Milwaukee location, “Silk on Water,” at 144 E. Juneau Ave. The location currently is known as Desire by the Art’s Performing Center. The Milwaukee Common Council is expected to review the change of agent application at an upcoming meeting.

May 8, 2019: Former Milwaukee Ald. Willie Wade has been charged with wire fraud in a case linked to strip clubs, alleged bribery and public corruption. Wade, 56, collected $30,000 in cash by claiming that he was negotiating on behalf of a current Milwaukee alderman to accept a bribe in exchange for a vote in favor of approving licenses for a downtown strip club, the U.S. Attorney’s Office said. Milwaukee Mayor Tom Barrett said that he was “shocked to hear of the allegations” against Wade. “I want to be clear: I will not tolerate corruption in government at any level,” Barrett said in a statement. “Mr. Wade is no longer leading the agency (Employ Milwaukee) and is not being paid pending resolution of his case.” Further, “Alderman B (Khalif Rainey) was not aware of Wade’s representations and had never offered or agreed to accept any bribe,” the indictment says. Wade served as the Milwaukee alderman representing the 7th District from 2003 through early 2016. That seat is now held by Rainey.

“We strongly disagree with the government’s decision to bring this indictment,” attorney Patrick Knight said in a statement. “Mr. Wade and I intend to defend against these charges and look forward to the opportunity to present our response to these allegations.” Knight said they have been “in communication with the government about this investigation” for the past year.

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