Sting Gone Wrong Takes Down Top Arizona Liquor Cops

An undercover sting led to the resignation of three Arizona Liquor Department employees. 

What was supposed to be a simple undercover sting to figure out if a strip club was following covid protocols in Oct. 2020, led to the resignation of a top detective and two senior administrators at the Arizona Department of Liquor Licenses and Control. 

Liquor detective Miguel Sanchez, who had served in law enforcement for 32 years, resigned in April following an internal report’s finding that he had acted dishonestly. In Sanchez’s original report, he wrote how the dancer “allowed” him to touch her. 

The Liquor Department agreed to work with the state’s Health Department to help investigate violations of covid protocols at strip clubs. The Liquor Department was able to immediately revoke a liquor license, while the Health Department had a longer and slower process to go through. 

According to the internal report, the operation was aimed at “checking out a complaint that the VIP room at Skin Cabaret was being used for ‘massage shows.’ Sanchez was designated the detective who would try to enter the VIP room, while his partner, Chris Allard, would serve as his ‘cover officer’ and remain in the main room.”

However, neither officer had experience conducting covert operations at gentlemen’s clubs, and the Liquor Department offered no real training or policy to follow when it came to such work. 

Liquor Department Director John Cocca supposedly told the two, according to Allard, “don’t get naked.” Allard also said he was told the only other restriction was not to spend all the money given to them. 

Both men observed apparent violations of social distancing guidelines right after entering the club on Oct. 24. They noted dancers sitting close to patrons at tables talking. Dancers were allowing men to approach them on stage and tip them according to the report. 

The immediate observations were enough to order the suspension of the club’s liquor license. The internal affairs investigators wrote in the report, “(it) calls into question why the detectives were directed to go into the VIP room in the first place.”

Sanchez negotiated a $250 price with the club hostess to have a 15-minute VIP session with a dancer whose stage name was Cali. In his own report, Sanchez said the hostess suggested touching was allowed in the private rooms. 

The very next day, the dancer reported her experience to Scottsdale police. She told police Sanchez kept attempting to touch her, “He’s just so touchy, which is so uncomfortable,” Cali said. 

During the private session, Cali repeatedly told Sanchez that touching was not allowed. Towards the end of the 15-minutes, Cali crouched on the ground to try and stop Sanchez from groping her. 

Following the night, both Allard and Sanchez wrote their reports on the club, but both would end up being told by their supervisors to change their details. 

In Allard’s report, he wrote how Cali looked to be in a poor mood after the session, and he guessed, “she was in a bad mood because she realized the two weren’t going to spend any more money on this slow night at the club.” 

In the order to remove the club’s liquor license, Sanchez included details on how the dancer at one point “stood up and allowed the detective to touch her buttocks.” At another point, Sanchez wrote, “Cali allowed the detective to touch her bare breasts and the small of her waist.”

The order was approved by Liquor Department’s deputy director, Michael Rosenberger, and signed by Cocca. It was served to the Skin Cabaret by two different officers. It was when the club received the order that the dancer realized she had been dancing for an undercover officer. She called the Scottsdale police to make a report, telling the officers she wanted to document what she believed to be an improper action by Sanchez. 

After news of the report reached the Liquor Department, Sanchez was placed on administrative leave on Oct. 27. Rosenberger sent an email to him telling him to, “Hang in there! We will get through this.”

The Scottsdale police reviewed the six-page order from the Liquor Department and focused on Sanchez’s use of the word “allowed” when describing his interaction with the dancer. To the detective, it suggested his actions were of his own accord, which the dancer didn’t stop. Since the dancer was being investigated, it was constituted as a crime.  

Sanchez was in violation of Arizona Revised Statute 13-1412A: Unlawful Sexual Conduct by a Peace Officer. 

After Sanchez learned he was being investigated by Scottsdale police, and he would also face an internal affairs investigation, he went back and revised his original report. 

The revised report, dated Oct. 28, did not say the dancer allowed Sanchez to touch her. In this more detailed version, Sanchez said that at one point, he touched the dancer’s buttocks “in an attempt to keep her buttocks away from my face.” In another instance in his report, Sanchez wrote he “put my hands on top of her breasts to prevent her from moving in again …”

The internal affairs investigation would look into Rosenberger’s actions surrounding the production of the report and his actions during the investigation itself. When he was interviewed on Dec. 11, he was told not to discuss the matter with anyone and he agreed. In reality, investigators were told by Sanchez and other members of the team Rosenberger spoke about the investigation. 

The Department of Public Safety internal affairs investigators wrote in their report, “the guidelines surrounding such investigations should be clear to anyone with a rudimentary understanding of law enforcement. For leaders of the department to violate them ‘conveys a blatant and gross disregard for the practices and integrity of an internal law enforcement investigation.” 

The report against Sanchez was completed and sent to him on April 5. It officially accused him of dishonesty. Sanchez resigned on April 14. The report from the Department of Public Safety did recommend Sanchez be fired if he did not resign. 

Cocca and Rosenberger both resigned on April 16. Rosenberger was accused, according to the report, of willful disobedience. Governor Doug Ducey has yet to appoint a new director to the Liquor Department.

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