Strip Clubs Fight State Agents

September 27, 2013 Updated Apr 22, 2010 at 7:00 AM EDT

September 27, 2013 Updated Apr 22, 2010 at 7:00 AM EDT

Federal agents strip two adult nightclubs of their liquor licenses following recent raids. But the owners of those clubs aren't giving up the drinks without a fight.

24KT Gold, a strip club in Hamburg is fighting to keep their liquor license. The State Liquor Authority held their first hearing in the case yesterday. Last month, state agents suspended the club's liquor license. The move came after federal agents raided both clubs. What they found? Alleged drug trafficking and prostitution.

Witnesses told authorities the owners knew about the illegal activity. The clubs stayed open but were prohibited from serving alcohol.

"If the allegations turn out to be true and I don't want to prejudge the entire case, but if they turn out to be true, this example of an extraordinary degree of illegal activity that's going on at a licensed premise," stated Dennis Rosen the chairman of the State Liquor Authority.

If the owners of 24KT Gold are found guilty of the charges, their liquor license would be revoked for two years. They could apply for a new license after that period. The next hearing in that case is scheduled for May 10th.

The owner of Rick's Tally-Ho has also filed a not guilty plea with the State Liquor Authority. Hearings in that case are pending.