Federal prosecutors say an Atlanta strip club arranged for strippers to offer sexual favors with professional basketball players - reportedly members of the New York Knicks - at a Charleston, S.C., hotel in 1997.

Steven Kaplan, owner of the Gold Club, is one of 16 people named in a federal indictment in Atlanta. He and 11 other defendants pleaded innocent Wednesday before a federal magistrate. He was released on $2 million bond and the others on $50,000 bonds.

The other four defendants are scheduled to be arraigned today.

The indictment states that in April or May 1997, Kaplan and the other defendants "transported female dancers from the Gold Club to the Francis Marion Hotel in Charleston, S.C., so that dancers could perform a lesbian sex show and have sex with members of a professional basketball team."

The indictment does not identify the team, but the New York Knicks were in Charleston in April 1997 for a pre-playoff training camp at College of Charleston. The team has held training camps in Charleston since 1991.

The New York Daily News today quoted unidentified sources close to the case as saying the team in question was the Knicks.

Kevin Eichman, the hotel manager, told The (Charleston) Post and Courier that the Knicks had never been booked in the hotel.

Knicks spokeswoman Lori Hamamoto said she was not aware of the indictment and would have no comment.

The government contends the Gold Club was a virtual brothel that corrupted police, provided dancers as prostitutes for regular clients and skimmed millions from the cash flow to buy protection from the New York-based Gambino organized crime family.

Kaplan declined to comment, but a statement released by his attorneys said they "vigorously deny" the government's allegations and expect a "complete vindication."

"Mr. Kaplan will be exonerated on all charges," said Larry Bronson, one of his lawyers. "We anticipate a lengthy trial and success."

The indictment says Kaplan, who bought the Gold Club in 1994, has had a long-term relationship with the Gambino operation, once reputedly run by John Gotti. Kaplan is accused of obstructing investigations into the family by hiding and paying witnesses - with cash, sexual favors or free club services.

The Gold Club is one of Atlanta's largest nude dancing establishments. In the early 1990s, its liquor sales made it one of the most profitable adult clubs in the country.

According to the indictment, club employees arranged for dancers to have sex with celebrity clients - including unidentified professional basketball players - in the club's private rooms, at local hotels or on trips outside Atlanta. Two Delta Air Lines employees were charged with helping arrange those trips for reduced rates in exchange for club services and other considerations.

The indictment says Lyle Goodman, a accountant for the club, was in charge of disputing customers' attempts to have the false charges removed. Investigators estimate that dozens of people were overcharged. At a news conference announcing the indictments, U.S. Attorney Richard Deane urged anyone who had been overcharged at the club to contact his office.

Deane said millions in cash profits from the club went unreported to evade taxes.