The issue is not only whether the clubs were unfairly targeted, but also whether law enforcement and political actions can effectively sideline a business without a criminal conviction.
A recently filed federal lawsuit out of Arizona is drawing attention well beyond Scottsdale, raising pointed questions about regulatory overreach, due process and the potential consequences when enforcement efforts intersect with politics and public perception.
Todd Borowsky, owner of the Scottsdale-based adult entertainment venues Skin Cabaret and Bones Cabaret, filed suit on March 31, 2026, in the U.S. District Court for the District of Arizona. His complaint alleges that the City of Scottsdale and its police department conducted what he describes as a “sham” investigation into claims that patrons at his clubs had been drugged — claims that ultimately failed to produce criminal charges or alleged victims.
According to the lawsuit, the investigation evolved into what Borowsky characterizes as a “fixated campaign” against his adult businesses. The alleged consequences were not limited to reputational harm.
The suit claims Scottsdale police also contacted financial institutions during the course of the investigation, triggering a cascade of financial repercussions. Among the most damaging was the loss of credit card processing and alleged bank account closures.
The police investigation concluded in May 2025 after a review by the Arizona Attorney General’s Office, which determined there was “no reasonable likelihood of conviction.” Despite that finding, Borowsky argues that the damage was done — economically and publicly.
A pattern of ‘tension’ with the city?
While Scottsdale officials have not conceded wrongdoing, the lawsuit taps into a broader conversation about how municipalities regulate adult entertainment businesses — and whether those efforts sometimes cross legal lines.
Comparable tensions have surfaced elsewhere. In Atlantic Beach, SC, for example, Thee Dollhouse became the center of an unusual legal battle after challenging local enforcement actions. In that case, allegations emerged that the police chief had been pressured to fabricate so-called “negative secondary effects” often used to justify restrictions on adult businesses. The chief reportedly refused and was later terminated, a sequence of events that became central to the club’s ongoing legal pushback.
The stakes moving forward
The Scottsdale lawsuit is still in its early stages, but its implications are already significant. The issue is not only whether Borowsky’s businesses were unfairly targeted, but also whether law enforcement and political actions — particularly those that ripple into financial systems — can effectively sideline a business without a criminal conviction.
For municipalities, the case may serve as a cautionary signal. Aggressive enforcement strategies, especially those tied to reputational claims rather than prosecutable evidence, risk legal exposure, according to attorneys, if they are shown to cause material harm without due process.
For business owners, particularly in heavily regulated industries such as adult entertainment, the case underscores a different reality: reputational damage and financial disruption can and often does occur long before a courtroom determines the facts.
As the case proceeds, it will likely test the boundaries between legitimate public safety enforcement and unlawful interference. The outcome may shape not only Scottsdale’s legal landscape, but also how cities nationwide approach oversight of legally operating business sectors.
This story comes courtesy of ACE Executive Angelina Spencer-Crisp and the ACE National Newsletter.
