BACLIFF — A Bacliff strip club facing a lawsuit in the death of 20-year-old Kristen Sanchez had its licenses suspended in 2002 after undercover agents said a club employee sold them Ecstasy.

Family photo

Kristen Sanchez

Tests showed the same illegal drug and twice the legal limit of alcohol in Sanchez' body after she left Lipstick Gentlemen’s Club on April 26, flipped her car into a pond and drowned.

A report by the Texas Alcoholic Beverage Commission agents in the same undercover investigation also said underage employees bought and drank alcohol despite wearing wristbands indicating they were younger than 21.

The club had its licenses suspended for 30 days and paid a $6,750 fine but admitted no wrongdoing. The settlement was reached without a formal hearing before the commission.

Club owner Alan Wheat said in a previous interview that Lipstick has a zero-tolerance policy on underage drinking. Explaining the policy, he cited the wristband system, under which employees are paid $10 if they report co-workers who remove their under-21 wristbands.

Since Wednesday, when Galveston attorney Tony Buzbee filed the lawsuit on behalf of Kristen’s father, Ronnie Sanchez, Wheat has not returned calls and e-mails seeking comment about the lawsuit or the charges that led to the suspended licenses.

Buzbee claims he has assembled numerous witnesses who have knowledge of crimes occurring at Lipstick’s.

“According to the allegations, Lipstick’s appears to be rife with illegal activity and we intend to peel back every layer of that onion,” Buzbee said in an e-mailed statement. “We don’t expect it is going to be comfortable for them. Their best option is to come forward and admit responsibility.”

The commission conducted an undercover investigation Nov. 29, 2001, after receiving a complaint about the sale of alcohol to drunken customers.

According to commission records, a 20-year-old dancer, at her own request, had two undercover agents buy her cocktails twice within about one hour. The agents also reported speaking with a 19-year-old dancer while she drank coffee and liqueur, a cocktail she said was helping her with a hangover from the night before. Both women wore pink armbands indicating they were younger than 21, the report said.

The 19-year-old told the agents she had been hooked on crystal meth — a potent form of methamphetamine — and recently quit. According to the report, she also said she had “X” — a slang term for Ecstasy — for sale for $25.

The agent said he bought a pill from the woman. Later, a police search dog was unable to find drugs inside the club, but police said the dog was not trained to detect Ecstasy.

Both women were cited for possessing alcohol, and the 19-year-old was cited for selling a controlled substance.

The lawsuit says Kristen sat on a club manager’s lap while he had drinks served to her the night she died, although she had told the club she was younger than 21 when she was hired as a dancer. After the club’s 2 a.m. closing, Kristen and the manager stayed there drinking, the lawsuit says.

Judge Lonnie Cox of the 56^th Judicial District Court ordered the club and its employees not to alter or destroy video footage or other records from March 15 to April 26, the day Kristen wrecked about 3:41 a.m.

She failed to negotiate a curve on rain-soaked state Highway 146 near state Highway 3 in Texas City. Her car hydroplaned off the road and flipped over in a pond. For eight frantic minutes, a 911 dispatcher tried to get her to describe her location before the line went dead. Rescuers found her about 30 minutes after she placed the call.