They violated the law by charging admission and operating without a license, etc, etc.
They should have just done each other in the privacy of their homes and no one would have cared....
You're right, but I'm sure most bars and restaurants violate some laws regulating their operation. I think the cops came under political pressure to shut this place down, so they came up with every possible violation they could find. If this had been anything other than a swinger-club, I doubt the police response would have been as severe.