Wednesday, November 30, 2016

Government Witnesses At Verdi Trial Caught At Baggage Check

By Ralph Cipriano
for BigTrial.net

The government's first two witnesses in the corruption trial of former Deputy L&I Commissioner Dominic Verdi came to the witness stand yesterday loaded with baggage.

First up was Susan Callueng, a former nightclub owner who was red-faced and dabbing her eyes with tissues.

Callueng's story was that whenever she needed a permit for her now defunct nightclub, Blurr in Old City, she used to go see Verdi at his office at 9th and Spring Garden.  She'd hand him a check made out to the city of Philadelphia for whatever the permit cost, whether it was $250 or $315. And then she would hand Verdi an envelope stuffed with $1,000 in cash.

Her story left courtroom spectators scratching their heads. If Callueng was indeed bribing Verdi with cash payoffs at $1,000 a clip, why did she also have to write out checks to the city of Philadelphia for much cheaper permit fees?

Callueng explained that she didn't have the time to go down to the Municipal Services Building, at Broad and JFK, like everybody else, and wait in line for a permit, which might take weeks or months to get. When the city shut her down on a Friday night, she testified, she wanted to reopen the next day.

But on the witness stand, Callueng had to admit that she is a cooperating government witness who owes the IRS more than $800,000 in back taxes, fines and penalties. She's also in trouble for fraudulently receiving free health insurance from Medicaid.

Callueng pleaded guilty last year to one count of fraud and four counts of tax evasion. She is scheduled to be sentenced on Dec. 22nd, two days before Christmas. So, as Verdi's lawyer pointed out on cross-examination, in her role as a cooperating witness in the Verdi trial, Callueng has the motive to sing the government's tune.

The next witness was Kenneth Gassman, a former L&I electrical contractor who testified that Verdi often pushed for favorable treatments for bar and nightclub owners that he was friendly with.

But Gassman had to tell the jury that he had already pleaded guilty to one count of extortion. That crime involved the use of Gassman's official position at L&I to file false complaints, in the process of extorting an elderly neighbor, who owned a property that Gassman wanted, but the neighbor wouldn't sell.

Gassman also had to admit that after he pleaded guilty to extortion, he's been waiting six years to be sentenced. And that his sentence will depend on, he admitted on the witness stand, how well he testifies in the Verdi case.

The government got off to a shaky start yesterday in the corruption trial of Verdi, who is charged in a seven-count federal indictment with conspiracy, extortion, and honest services fraud.

The government alleges that while Verdi was deputy L&I Commissioner, and leading Nuisance Task Force raids around town, he was hiding a part-ownership in a beer distributorship, Chappy's Beer, Butts and Bets. And that as part of his crime spree, Verdi was inducing bar and night club owners to buy beer from Chappy's, in exchange for favorable treatment from L&I.

On the witness stand, Callueng had a hard time keeping it together when she talked about her guilty plea and subsequent deal to cooperate with the government.

"Sorry, I get emotional," she said as she wiped away tears.

Her IRS bill, she said, climbed to $1.1 million, before she sold off her liquor license for $155,000, and gave the money to the government. She still owes the feds, she said, more than $800,000.

When she comes back to court three days before Christmas to be sentenced, she testified, she faces guidelines that call for a prison term of between 18 to 24 months.

Callueng said she got in trouble when she opened her night club in 2004, and didn't bother worrying about zoning permits.

"I didn't know that I needed certain licenses, and I didn't care," she said. Her priorities, she said, were making money, taking care of her family, and operating her nightclub. Then, the place was raided by the city's Nuisance Task Force.

Callueng found out she needed a special assembly license, as well as a license for food prep, a certificate of occupancy and a business privilege license. That's when she turned to Verdi for help.

"It was the first time the club was raided," she said. "All the music went off."

 "There was a badge in my face," she said. "It's a very scary experience."

When the task force raided her club, she testified, all the lights were turned on. Her patrons got angry, and started chanting.

What were they chanting, asked Assistant U.S. Attorney Denise Wolf.

Callueng was too shy to say it.

"We're all adults here," the prosecutor told the witness.

"Fuck the police," the bashful witness said.

That's when one of her managers, Mario Fresta, told her that they needed to "meet up with Dominic Verdi," and that he would take care of their problems.

Her story was that instead of waiting in line at the Municipal Services Building, Verdi would get her a permit the same day.

She testified that Verdi got her a health permit, even though her club, she said, was way too filthy to pass inspection. The kitchen, she said, was loaded with crud and mouse droppings.

"Aren't you glad you don't go these clubs," Judge Berle M. Schiller told the jury.

Her testimony was that on three occasions when she needed permits, that she handed Verdi an envelope stuffed with $1,000 in $20 bills. And that after he told her about Chappy's, she bought between $3,000 and $5,000 worth of Chappy's beer.

"I felt that I had to keep getting favors he was doing for us," she said about Verdi.

The next witness was Kevin Gassman, an electrician who became an electrical inspector for L&I from 1997 to 2010.

When quizzed about his extortion rap against his elderly neighbor, Gassman explained, "I really wanted to buy his building."

"I abused my authority," Gassman said.

Gassman said while he was working at L&I, he found out about Verdi's part-ownership interest in Chappy's. And that at one point, he and another L&I official, the late Kevin Daly, discussed Chappy's with Verdi.

"I kind of felt that this was a conflict of interest issue," Gassman said.

And what did Verdi say in response, the prosecutor wanted to know.

Verdi, Gassman said, informed him that Verdi had talked it over with the city's Inspector General's office, and that "everything's OK."

Gassman was a member of the Nuisance Task Force. When the task force raided Cescaphe, a ballroom where they hold weddings in Northern Liberties, the place didn't have fire alarms. But it was scheduled to open soon on Valentine's Day, and hold its first wedding.

Gassman said that when he talked to Verdi about it, Verdi told him, "We needed to see what we could do to work it out."

To Gassman, that was "preferential treatment," he said.

When the Catholic War Veterans, who operated a bar, were planning a "Peek-A-Boo" night, featuring a stripper, angry neighbors contacted L&I.

"It was a very family oriented neighborhood," Gassman explained.

"Maybe I should become Catholic," the judge quipped.

L&I raided the joint, and discovered a "young lady who was wearing a snake," Gassman said.

"Maybe it was a boa," the judge cracked.

The Task Force shut the place down, but the Catholic War Veterans were allowed to reopen their bar soon after.

"I was not surprised," Gassman said.

"Why not," the prosecutor asked.

"Because they were friends with Dominic," Gassman replied.

On cross-examination, Susan Lin, Verdi's defense lawyer, zeroed in on Gassman's cooperation agreement with the government, and how it gave him incentive "to get a lesser sentence."

"Sir, you are looking at 20 years in prison and a $250,000 fine," she said. The witness's sentence, she said, had been "postponed so you could testify in this case."

"Correct," Gassman said.

So, as a cooperating witness, Lin said, isn't it "in your best interests to implicate as many people as possible?"

"It's called cooperation," Gassman replied.

It got worse on re-direct when Wolf decided she had to go over the details of Gassman's extortion crime, which Lin was making plenty of hay on.

And Gassman had to agree with the prosecutor when she said it wasn't just one mistake he made in harassing and extorting his elderly neighbor, but "four years of bad choices."

In her efforts to impeach the credibility of the witness, Lin was also able to drag in a tattoo Gassman had on his arm. Especially after the prosecutor made the mistake of referring to the words on tattoo when she was quizzing the witness.

You just opened the door, the judge told the prosecutor.

To Lin's delight, Gassman had to reveal to the jury that the tattoo says, "It's better to be guilty and wealthy" instead of "proven innocent and broke."

The next witness was Joseph Volpe, a chef who owns the Cescaphe ballroom, where they hold 100 to 120 weddings a year.

"We were having trouble getting through the inspection phase," Volpe testified. Gassman, Volpe said, "was not very nice man."

So Volpe said, he called Bart Blatstein, a prominent developer who used to own the Cescaphe, and Blatstein brought Dominic Verdi into the situation. Verdi was able to obtain a temporary occupancy permit so the Cescaphe could open on Valentine's Day by hosting its first wedding, Volpe said.

Volpe subsequently ran into Verdi at a wedding. That's when Verdi told Volpe that his nephew had opened a beer distributorship named Chappy's.

Volpe explained how, over the next four years, he proceeded to buy more than $200,000 worth of beer from Chappy's.

"Dominic was a friend we had a relationship with, so we switched" beer distributors, Volpe said.

The prosecutor, however, was looking for evidence of extortion, so she kept asking Volpe about why he made the switch.

"He gave you the answer," the judge interrupted. "You don't like the answer."

When the prosecutor persisted in questioning Volpe about the switch in beer distributors, Volpe responded, "It doesn't hurt to have friends in high places."

Assistant U.S. Attorney Wolf, however, was still displeased with Volpe's answers. So she asked the judge for permission to treat Volpe as a "hostile, adverse witness."

"He's your witness," the judge told the prosecutor.

Verdi, Volpe said, was "a friend of Bart's. I wanted to keep the relationship. I wanted to keep him [Verdi] happy."

"If I needed help along the way, he [Verdi] would be there to help me," Volpe said.

On cross-examination, Lin asked Volpe if he "wanted to be here today."

"No," he said.

Volpe was the first government witness in the case who hadn't pleaded guilty to a crime. Lin took advantage of that situation by asking the witness if, "You stand to gain anything from your testimony here today?"

"No," Volpe replied.

Lin asked Volpe about his dealings with Gassman.

"We were trying to do things right," Volpe said, and Gassman "kept finding things wrong."

When Verdi intervened to help, Lin said, did you ever have to hand him an envelope stuffed with cash?

"No," the witness said.

Did you ever feel threatened by Verdi, she asked.

"No," the witness said.

Testimony in the case is scheduled to resume at 9:30 this morning.

3 comments:

  1. Sounds like the government has a bull-shit case against a hard working city employee.

    ReplyDelete
  2. Shiller is having more fun than everyone...boa
    ..

    ReplyDelete
  3. Another case that's all bunch of shit - mr Verdi has a great reputation around town !!!

    ReplyDelete

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