Federal courthouse in downtown Lincoln. (Paul Hammel/Nebraska Examiner)
LINCOLN — The former director of the Nebraska Liquor Control Commission and a co-owner of two Lincoln strip clubs both pleaded not guilty this week in a public corruption case alleging the director took money, lap dances and sexual favors at the clubs while working for the state board overseeing liquor licenses.
Former Liquor Commission Executive Director Hobert “Hobie” Rupe faces seven felony charges, three counts of honest services fraud, a charge that a public official or employee deprived the people of their honest work or services, one count of conspiring to commit honest services fraud, two counts of wire fraud and a single count of extortion.
One of his alleged co-conspirators, Brent Zywiec, a part owner of Lincoln strip club The Office and a former co-owner of The Night Before Lounge, faces four felony charges, three counts of honest services fraud and one count of conspiring to commit such fraud. Each of the charges against both men could lead to prison sentences of up to 20 years.
Both men joined their first federal court hearings in Lincoln by video conference from jails in Saunders and Saline Counties, and both successfully fought federal prosecutors’ efforts to detain them through trial.
U.S. Magistrate Judge Jacqueline DeLuca released both after ruling in hearings on Thursday that the federal government had failed to make a compelling argument to hold them.
Prosecutors had argued that Rupe was at risk of harming himself or obstructing the investigation, basing it on comments he had made after search warrants were served and after investigators alleged that he had shared information about police investigations of a competing Omaha strip club with the club co-owner.
In a longer hearing, they argued Zywiec was a risk to influence or intimidate witnesses because of his alleged ties to the motorcycle gang Hell’s Angels, basing it on witness interviews with people who said they worried about speaking out against him.
Assistant U.S. Attorney Julie Mruz based most of her arguments for continued detention on testimony from FBI Special Agent Alex Cross, who said either man might discuss the case with others and put witness statements or other information crucial to proving the case at risk. He pointed to efforts between them to share that they were being investigated and to shift communications from cellphones that could be wiretapped to a more secure encrypted app.
But the attorney for Rupe, Bill McGinn, and the attorney for Zywiec, Carlos Monzón, argued that their clients had already shown they were not risks. Monzón also argued that the government had offered no evidence that his client had attempted to contact, persuade or threaten anyone related to the case.
The judge seemed to agree, letting both men go free Thursday night.
McGinn did not immediately return messages seeking comment about the case. Monzón, reached Friday, said his client is “totally innocent” and called the case an example of “government overreach.”
“I find it almost offensive that here is an individual that is helping law enforcement, and they’re claiming that he is trying to harm a competitor that is 50 or 60 miles away from his business,” Monzón said. “It makes no sense.”
U.S. Attorney Lesley Woods, in a statement Thursday and in a press conference earlier this week, argued that “public corruption undermines” public trust in public officials.
The federal indictment unsealed this week alleges that Rupe, who had served nearly a decade as an assistant Nebraska attorney general, accepted payments and services from the clubs from 2022-2025.
Among the gifts offered and accepted, it said, were free entry into bars that usually charge $20 cover fees, free drinks and cash to cover free lap dances, VIP dances and additional services that included oral sex.
Federal authorities say at least one surveillance video that investigators secured showed Rupe receiving sexual favors. Some videos of people in compromising positions were saved to the owner’s iCloud account, the indictment says. Rupe is also accused of looking the other way when he should have seen or known that potential liquor license violations were occurring.
“The citizens of Nebraska are the primary victims of this case,” Woods said. “The Executive Director of the Liquor Control Commission should be the official who polices establishments like the ones identified in the indictment for the benefit of public safety.”
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