Over a (beer) barrel: Feds say former L&I official shook down bars, clubs

Bar owners and others say they got special treatment for buying from Chappy's in South Philadelphia, where Dominic Verdi was part-owner.
Bar owners and others say they got special treatment for buying from Chappy's in South Philadelphia, where Dominic Verdi was part-owner. (APRIL SAUL / Staff Photographer)
Posted: April 03, 2014

For bar owners facing heat from the Philadelphia Department of Licenses and Inspections, no problem was too large to handle with Deputy Commissioner Dominic Verdi on your side, federal prosecutors say.

Failed an inspection? Not a problem. Running a gambling operation or a strip club? Don't sweat it. Implicated in the beating death of one of your patrons? No reason to shut your doors.

As long as you bought your beer in the right place.

A federal indictment unsealed Tuesday pulled back the curtain on an alleged long-standing arrangement between the former L&I official and dozens of bar and restaurant owners, all of whom say they received special treatment for buying their alcohol from Chappy's Beer, Butts and Bets, a South Philadelphia beer distributor in which Verdi held an ownership stake.

Until his resignation in 2011, prosecutors said, Verdi used his L&I post to extort nearly $1 million in beer sales from those seeking help clearing up city regulatory and enforcement problems.

Verdi, 58, of South Philadelphia, did not return calls Tuesday. He is expected to turn himself in to authorities Wednesday.

His lawyer, Frank DeSimone, declined to comment on the charges, saying he had not had a chance to review the indictment. He maintained, however, that his client had done nothing wrong.

The picture painted by prosecutors is one of a clear  quid pro quo.

As L&I's deputy commissioner, Verdi oversaw department employees assigned to the city's Public Nuisance Task Force, a joint law enforcement-regulatory operation designed to target nuisance bars, brothels, and other problem businesses.

But prosecutors say Verdi took to shaking down those very establishments, from one end of the city to the other.

When task force investigators uncovered an unlicensed gentleman's club in 2006 at the Catholic War Veterans' Northeast Philadelphia watering hole, Verdi allegedly lifted an order closing the establishment after one day. The bar quickly resumed its purchase orders from Chappy's, the indictment said.

When Robert Laflar, owner of Oasis Gentlemen's Club in the 6800 block of Essington Avenue near Philadelphia International Airport, was charged along with two employees in 2009 in a patron's parking-lot beating death, Verdi purportedly drove to the club to control the fallout and ensure the strip joint stayed open. Though Laflar died of a drug overdose before he could stand trial, the charges against Verdi say the club spent more than $7,000 at Chappy's in the months before and after the crime.

And when, months after becoming Chappy's customers, the owners of another night spot caught the task force's attention in early 2009, they received a welcome tip-off from South Philadelphia lawyer Gregory Quigley, a close business associate of Verdi's, the indictment says.

The task force planned a surprise raid - but, according to the indictment, the lawyer texted the club owners to give them a heads-up, suggesting they close their doors early and blame a broken pipe.

Quigley, who often represented clients before L&I, lost his law license later that year after pleading guilty to unrelated perjury charges stemming from a mob gambling investigation in Delaware County.

He, too, held an ownership stake in Chappy's. His father is listed as the company's president in state Liquor Control Board records. Verdi's wife is listed as the manager.

But when pressed about his own ties to the business during a 2007 interview with the city Inspector General's Office, Verdi denied any relationship. Calls to the Quigleys and Chappy's went unanswered Tuesday.

The charges against Verdi are the first to emerge from a series of FBI raids in 2010-11 that hit Chappy's as well as automobile towing and salvage companies, two strip clubs, and the computers of two Philadelphia police officers.

The FBI declined to say Tuesday whether other shoes were yet to drop in the long-running investigation. At the time of the earlier raids, federal authorities said they were searching for "evidence of payments to public officials." Verdi's name surfaced as part of the investigation soon thereafter.

L&I threatened to transfer him from enforcement to administrative duties and cut his salary, about $95,000, more than 40 percent. Verdi quit instead, ending a 35-year career with the city.

Despite the circumstances of his exit, Verdi's early days at the department were promising, one of his former bosses said Tuesday in an interview.

"I believe he was clean when he worked for me," said Bennett Levin, who headed L&I in the early '90s.

In fact, three months into Levin's tenure, Verdi, then a young building inspector, asked to meet over lunch to share his concerns about corruption within L&I.

Now, Verdi faces sentences totaling up to 140 years in prison and $1.75 million in fines if convicted on charges of conspiracy, extortion, and fraud.


jroebuck@phillynews.com

215-925-2649

@jeremyrroebuck

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