Husband-And-Wife Owners Of Closed Roxbury Strip Club Indicted

ROXBURY, NJ — A retired dentist in Livingston who owned a strip club in Roxbury has been indicted along with eight alleged associates – including his wife – for carrying out an "elaborate" credit card scheme that netted more than $12 million, prosecutors said.

The police operation, dubbed "Operation Smiles," resulted in the arrest of Kevin Lipka, 63, and Shelly Lipka, 62, both of Livingston.

The Lipkas co-owned the company She-Kev Inc., which did business as Smiles II, a strip-club/bar on Route 46 West near Route 10 in Roxbury, according to the New Jersey Office of the Attorney General.

The husband-and-wife duo allegedly conspired in an elaborate scheme in which they used stolen credit card information – and illegally acquired gift cards – to steal more than $12 million, prosecutors said.
On Thursday, the Division of Criminal Justice Gangs & Organized Crime Bureau obtained a 19-count state grand jury indictment charging the Lipkas and their alleged associates with racketeering, conspiracy and three counts of money laundering.

Charged were:

• Kevin Lipka, 63, of Livingston, N.J., a retired dentist, was co-owner with his wife of the company She-Kev Inc., which did business as Smiles II, a strip-club bar on Route 46 West near Route 10 in Roxbury. He allegedly led the criminal enterprise with the help of key associates.
• Shelly Lipka, 62, of Livingston, N.J., Kevin Lipka's wife and co-owner of She-Kev Inc.
• Kevin Bae, 30, of Edgewater, N.J., allegedly partnered with Kevin Lipka in the scheme involving stolen credit cards and illegally acquired gift cards. He shared a bank account with Kevin Lipka, into which millions of dollars were transferred.
• Eric Olsen, 49, Roxbury, N.J., was daytime manager of Smiles II and handled finances for the business. He allegedly participated in the criminal enterprise, spending hours at a time processing transactions with stolen gift cards and credit cards at the bar.
• Peter Vasilipous, 73, of Elizabeth, N.J., was nighttime manager of Smiles II. It is alleged that he also spent hours at a time processing transactions with stolen gift and credit cards at the bar.
• Kevin Rodriguez, 25, of Whitehall, Pa., allegedly brought stolen credit cards and illegally acquired gift cards to Lipka and his associates and shared in the profits.
• Jordan Turner, 25, of Jamaica, N.Y., allegedly brought stolen credit cards and illegally acquired gift cards to Lipka and his associates and shared in the profits.
• Chintan Patel, 34, of Edison, N.J., allegedly brought stolen credit cards and illegally acquired gift cards to Lipka and his associates and shared in the profits.
• Adam Ferguson, 26, of Bronx, N.Y., allegedly brought stolen credit cards and illegally acquired gift cards to Lipka and his associates and shared in the profits.

Prosecutors said that in addition to the racketeering, money laundering and conspiracy charges, all of the defendants with the exception of Ferguson face one or two counts of receiving stolen property (2nd degree). Kevin Lipka, Bae, Rodriguez and Turner are each charged with one or two counts of theft by deception (2nd degree). Kevin Lipka faces an additional count of first-degree money laundering, and he and Shelly Lipka are charged with misconduct by a corporate official (2nd degree), two counts of filing a fraudulent tax return (3rd degree), and two counts of failure to file a tax return (3rd degree). Bae also is charged with failure to file a tax return (3rd degree). Turner faces additional counts of receiving stolen property (3rd degree) and credit card theft (4th degree), while Olsen faces a charge of hindering prosecution (3rd degree).

The Roxbury Police Department initiated the investigation in 2015 and subsequently enlisted the Attorney General's Office. Most of the defendants were arrested in July 2016, when search warrants were executed for Smiles II, Kevin Lipka's home, his vehicle, and other locations. Thousands of gift cards were seized as well as documents related to the alleged schemes. The Livingston Police assisted in the arrests and searches, prosecutors said.

"These ring members allegedly were prolific in purchasing stolen credit card information on the dark web, turning it into plastic, and ultimately converting the plastic into millions of dollars in cash," Attorney General Gurbir Grewal charged.

Between April 2014 and July 2016, those charged allegedly conspired to steal over $12 million by using stolen credit card information purchased on the dark web. They then allegedly made fake credit cards using that information, and used the fake cards to buy real gift cards in retail stores. Once gift cards were purchased, they sold those for cash.

In connection with the racketeering case, the Division of Criminal Justice has placed liens on the bar in Roxbury, two homes owned by the Lipkas in Livingston worth a total of about $4 million, two homes owned by Kevin Lipka in Essex Fells and Belvedere, a vehicle, and multiple bank accounts, prosecutors said.

According to prosecutors, the first-degree charges carry a sentence of 10 to 20 years in prison and a fine of up to $200,000. The racketeering charge includes a mandatory period of parole ineligibility equal to 85% of the sentence imposed. The money laundering charges include parole ineligibility equal to one-third to one-half of the sentence imposed. They carry a fine of up to $500,000 and an added money laundering penalty of up to $500,000. Second-degree charges carry a sentence of five to 10 years in prison and a fine of up to $150,000, while third-degree charges carry a sentence of three to five years in prison and a $15,000 fine.

With reporting by Eric Keifer

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