Lawsuit Claims Houston Attorneys Threatened to Out Former Mob Boss Living in Witness Protection During Strip Club Deal

The saga of a Westheimer strip club and the former mob boss who used to run it has taken another strange turn.

First, a little background: Lisa Hansegard bought the now-shuttered Baby Dolls strip club from the estate of Aris Mylonas, the father of her child, after Mylonas died in 2005, and shortly thereafter entered into an agreement with James Cabella to operate the club -- Cabella already owned a strip joint, the Penthouse Club, across the street and was apparently looking to expand his reach in the local strip-club scene. Hansegard claims in court documents that when she later started negotiating with Cabella to sell him Baby Dolls, she discovered through the strip-joint grapevine that Cabella was really Vincent Palermo, aka "Vinny Ocean," former acting boss of the New Jersey-based DeCavalcante crime family. After being indicted in the late 1990s on several federal charges, Palermo admitted to taking part in multiple murders, agreed to help the feds take down the DeCavalcante family, and, after spending two years in prison, entered the federal witness protection program (some have said that Tony Soprano was loosely based on Palermo's life in the DeCavalcante family).

The New York Post and KPRC identified Cabella as Vinny Ocean back in 2009, right around the time the Penthouse Club was suing the City of Houston over its sexually oriented business ordinance. But in 2007, it was still a fairly well-kept secret that a former mob boss was running strip clubs on Westheimer.

According to a lawsuit Hansegard filed in Harris County this week, her then attorneys Howard Steele and Charles Sturm (collectively Steele Sturm PLLC) tried to leverage that bit of information while negotiating the sale of Baby Dolls to Cabella. Unbeknownst to Hansegard, she alleges, Steele Sturm made thinly-veiled threats to publicly out Cabella as Vinny Ocean when he tried to back out of the sale in May 2007.

"In light of this position, we will be filing a lawsuit if our bill is not paid by Friday against Vinnie 'The Ocean' Palermo for fraudulent inducement," Steele wrote in an email to Palmero's then-attorney, Al Van Huff. That seems to have jump-started things, and by summer Cabella, through his wife Debra, agreed to buy the club from Hansegard for $1.3 million paid out over the course of 10 years.

But a couple of months later, when the parties hit a speed bump negotiating the bill of sale, Sturm sent Van Huff another email threatening a lawsuit. "I will send you a courtesy copy of the petition today by courier. It is being filed in 51 minutes, along with a press release, unless I receive a letter from you rescinding the contract before then. (I bet it makes the national news tonight.) Your phone is going to be very busy. Best regards."

"Lisa Hansegard did not authorize the lawsuit or extortion threat," states Hansegard's lawsuit filed against Steele Sturm this week. According to a letter filed as an exhibit to Hansegard's lawsuit, after Cabella again met with Hansegard the summer of 2007 and the two came to a settlement about the sale and how the money would be paid out, Cabella asked Hansegard to agree to this condition: "[I]t is my understanding that Lisa Hansegard and Steele Sturm PLLC ... agree to hold any personal information they may have regarding James Cabella and Debra Cabella confidential without restriction or limitation."

Hansegard's lawsuit accuses Steele Sturm of professional negligence, gross negligence, and breach of fiduciary duty, alleging their handling of her case cost her over $1 million -- once Cabella entered bankruptcy court in 2013, Hansegard only recouped about $350,000 from Cabella for the club, according to her lawsuit. (Steele Sturm didn't respond to multiple requests for comment this week, and Brent Perry, Hansegard's attorney, declined to speak on the record but did confirm and clarify some details raised in Hansegard's petition.)

Hansegard alleges in her lawsuit that Steele Sturm's strong-arming ultimately tanked any settlement with Cabella over payment for the club. Documents she filed with her lawsuit show Cabella's lawyers had in fact sent Steele Sturm an executed bill of sale, a guarantee agreement, and three checks - two for $2,500 for Hansegard and a $10,000 check for Steele Sturm - in June 2007. She alleges she never got those payments or the guarantee agreement.

And, for reasons that still aren't entirely clear, Steele Sturm the following month emailed the former mobster's attorney another ultimatum: Pay $3 million over ten years, or fork over $950,000 in 30 days. According to the lawsuit, negotiations effectively disintegrated after that point.

Hansegard alleges in her suit: "Rather than confirm to Lisa Hansegard that James Cabella agreed to the guarantee and obtain her signature, Steele Sturm deposited the $10,000 check and continued its efforts to extort money from James and Debra Cabella."

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Michael Barajas
Contact: Michael Barajas