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Abuse probe prompts Stars to give up state Lottery contract

Stars Cabaret in Beaverton has agreed to terminate its contract with the Oregon Lottery as fallout from several mid-December arrests in connection with the sexual abuse of two 13-year-old girls at the business.

Lottery officials said Wednesday, March 26, that all video lottery games would be removed from the Beaverton nightclub, 4570 S.W. Lombard Ave., by March 31. Stars owners voluntarily ended the lottery contract after meeting with state officials early this month.

Three men have been arrested in the case involving the underage girls at the Beaverton business. Beaverton police began a criminal investigation into the sex trafficking in late September. Two men were arrested in mid-December in connection with the abuse. A third man was arrested near the end of December.

Beaverton police said in December that one victim was a runaway who met with three men in Beaverton in 2012. The men were accused of assaulting the victim and forcing her into prostitution. At lease one of the men allegedly provided the victim with methamphetamine "on several occasions," according to Beaverton police.

The men arrested in the case were 27-year-old Victor Moreno-Hernandez of Beaverton, 42-year-old Steven Jason Toth, also of Beaverton, and 30-year-old Yahir Ibidem Muniz of Vancouver, Wash.

Stars owners claimed they did not know about the sexual abuse at the club.

“Even though the criminal investigation is continuing and we are not prejudging its outcome, we concluded that there is a sufficient basis to terminate our contract with the Stars Cabaret and Steak House in Beaverton,” said Oregon Lottery Director Jack Roberts. “This does not preclude a future Lottery contract at that location if management demonstrates that it has implemented policies that will prevent the reoccurrence of the circumstances that led to this termination.”

In a March 17 letter to lottery officials, Randy Kaiser, representing Stars owner Freehoo Inc., wrote that the company "is not admitting to any wrongdoing" and that he believes the company "will be vindicated over time."

The lottery contract termination only affects the Beaverton nightclub, not Stars nightclubs in Tualatin, Salem and Bend.