Former licensee David Lakepa was hit with $8500 in penalties on Tuesday after liquor and gaming inspectors uncovered a makeshift bar on the premises of the adult entertainment establishment.

In December, nearly 100 officers, including some wearing balaclavas and bullet-proof vests, were involved in late-night raids on the premises and the nearby Bada Bing strip club.

Police allege they were sold cocaine by venue staff but that matter was not considered by liquor authorities.

The nightclub raids led to three charges of cocaine supply and forced DreamGirls to shut its doors and surrender its licence.

It was put up for sale earlier this year.

At DreamGirls, inspectors found extensive evidence that the club was selling patrons alcohol in upstairs areas of the club, for which it did not have a liquor licence.

Mr Lakepa, who was in the basement bar at the time of the raid, at first denied any knowledge of the illegal bar.

But he later confessed and confirmed he had directed employees to sell liquor in prohibited areas.

​Authorities shut both premises for six months following the raids and Mr Lakepa voluntarily surrendered his licence.

A previous attempt to strip Mr Lakepa of his right to hold a liquor licence in future did not proceed, despite questions being raised about whether the club was checking patrons' identification.

Mr Lakepa pleaded guilty to two offences including conducting an unlicensed premises.