A little while after their first run-in with the law, Rubell and Schrager faced allegations from the IRS that they were hiding unreported money and illicit drugs within Studio 54. When two dozen IRS agents arrived to investigate the claims, they searched the club’s vault and found the illegal cash and substances.
In all, the club owners hid $2.5 million from the IRS, resulting in two prison sentences for fraud. After Rubell and Schrager were caught in 1980, Studio 54 permanently closed its doors. Although the owners were eventually released, the disco itself ended when Studio 54 went under.
Rockstars, Writers, and Picasso's Daughter
No other nightclub in history hosted as many celebrities as Studio 54. But the photo below is just something else. Rock princess Jerry Hall is seen standing next to Andy Warhol, who has Blondie's lead singer, Debbie Harry by his side. And who is that grabbing Harry's hand? None other than Truman Capote, one of the greatest American writers in history.
But maybe the most surprising person in this photo (and the most unrecognizable) is the woman standing at the far right, on the other side of Capote. The woman in the white jacket is none other than Paloma Picasso, Pablo Picasso's daughter! Talk about an elite guest list.
Bianca Jagger Brought Her Own Doves to the Club
Bianca Jagger celebrated plenty of iconic nights at Studio 54. Beyond her mounted entry and her birthday festivities, the star also donned an outrageous outfit for one evening out. Two doves perched on her hands and a gold crown atop her head resulted in a Grecian look other women would be hard-pressed to pull off.
Bianca’s outfit, however, had a motive. When club owner Steve Rubell decided to act as a bouncer, he determined that only the best of the best could make their way inside the doors of Studio 54. Bianca’s outfit ensured her entry into the exclusive club.
Been There, Done That, Wrote the Book About It
No doubt, the walls of Studio 54 could tell stories that would make you blush like an innocent maiden at a debutant ball. But since the walls are pretty quiet, you'd have to settle for the tell-all novel, "The Club." Published in 1980, the book was written by a past employee of the infamous nightclub.
American author Steven Gains and former Studio 54 bartender Robert Jon Cohen didn't go to great lengths to cover the identities of the people involved. In fact, their depiction of the events was so close to reality that they were almost slapped with a $20 million lawsuit. The suit was only dropped because, literally, no one of the people involved would go on record admitting to taking part in the obscene acts.
Rubell and Schrager Didn’t Learn From Their Mistake
Although Rubell and Schrager were arrested for selling alcohol without a license, their incredible legal representation managed to get them out of trouble. To fix their problem, Rubell and Schrager hired Roy Cohn. The ruthless attorney served other big names like Senator McCarthy and Donald Trump, and he had a reputation as a big-shot lawyer with plenty of pull.
Cohn freed Rubell and Schrager from prison, and they immediately returned to the club. However, they didn’t learn from their mistake. After a few more years of success, the owners had the IRS breathing down their necks.