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Minkoff has filed for a Chapter 11 restructuring of its $1.45 million debt. He owes Nations Bank about $2 million and tens of thousands of dollars to the IRS. Larry began his porn career in the early 1970s and became one of the largest sex shop operators in the US. His bankruptcy filing reveals that Minkoff was drawn to porn by its low wholesale costs, which created opportunities for high profits. Starting with a $10,000 loan from his parents, he opened his first location at 39th and Main streets in Kansas City in 1974. He opened his second store in Albuquerque, N.M., one year later and eventually ran as many as 50 adult bookstores across the U.S., according to bankruptcy court documents. Police, in press reports in the late 1980s and early 1990s, said Minkoff owned about 150 bookstores in 12 states. By 1984, Minkoff lived in a $400,000 home in Leawood. He wore expensive jewelry and signed papers with a $6,000 pen. His owned a Mercedes, Jaguar and a $54,000 Cadillac. Around 1985, Nick F. Agrusa, a counterfeiter and associate of Kansas City crime boss Anthony "Ripe" Civella, decided to muscle in on Minkoff’s operation. Agrusa reportedly took Minkoff’s employee Sheila Soptick to a formal Italian dinner at Jasper’s Restaurant in Waldo. Joining them at the table, Soptick later told a Kansas City police detective, were a man identified as Ray Heinz and Nick A. Civella, a son of the reputed mob boss. The men floated a proposal: The Minkoff empire should do business exclusively with Agrusa’s Video Midwest. Soptick refused. Civella and Heinz left the table, Soptick told the detective. Then Agrusa said: Accept the deal, he allegedly threatened, or workers could be hurt. Agrusa would blow up her bookstores. Agrusa reportedly added that his "boss" had met "people from the East Coast" pornography industry while behind bars in Springfield. At the time, records show, Anthony Civella was doing time at the federal prison there. Soptick told the detective she did not take Agrusa's threat seriously. No bombing resulted. Agrusa founded Video Midwest in 1985, a dealer in pirated videos. Over time, investigators believe, the company began to use other names, too: NF Enterprises, MegaMovies, the Small Package Shipping Co. and Essex Midwest. From the 1/1/99 Kansas City Business Journal: The stores' geographic dispersal created "accounting headaches" for Minkoff, according to court documents, which led to run-ins with the IRS. Minkoff also said his numerous real estate partnerships became unprofitable after the Tax Reform Act of 1986 changed how they were treated. Also contributing to Minkoff's downfall were a costly divorce and the buyout of his longtime partner, Richard Wallis, according to Minkoff's filings. In 1992, the Kansas Department of Revenue seized his Kansas stores and closed his Overland Park management office for unpaid taxes. Two years later, a bookstore owned by Minkoff pleaded guilty to a misdemeanor charge of promoting obscenity. The bookstore had been engaged in a battle with Kansas City, Kan., over whether it needed an adult entertainment license. In 1997, Minkoff pleaded guilty to under-reporting his 1992 taxable income to the IRS by $273,000. Prosecutors claimed that Minkoff owed the IRS more than $900,000 in back taxes dating back to the 1980s. Minkoff was ordered to pay $1 million and placed on five years of probation. Minkoff continues to operate about a dozen adult establishments under five different corporate names. The corporations have filed separate Chapter 11 bankruptcy plans. Cruciani said the various bankruptcy proceedings "propose the continued operation of all those entities." The bankruptcy filings list assets, both personal and corporate, of $2.18 million and liabilities of $3.69 million. (Sources: Michael Becker. "Creditors near vote on plan to restructure Minkoff debt." Kansas City Business Journal. 1/1/99. Page 4. Joe Stephens, "Crime Ring Muscles Way Into Pornography, FBI tape file shows Federal Agents Hear KC Men Reveal Details." Kansas City Star. 10/20/91. Page A1.)
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