Convicted Killer Testifies That Verdi Protected Strip Club

By Ralph Cipriano
for BigTrial.net

The government's latest star witness in the Dominic Verdi corruption trial showed up in court today wearing a prison jump suit.

Other featured cooperating witnesses in the Verdi trial this week included a husband-and-wife team of former night club owners who have pleaded guilty to fraud and tax evasion, owing the feds as much as $1 million in back taxes, fines, and penalties.

But John Pettit had them beat. The former strip club manager was convicted this past June of third-degree murder after he punched a drunk patron in the head during a 2009 fight outside the Oasis Gentlemen's Club.  John Koons, 31, suffered a depressed skull fracture from the punch, and when he fell backward, he fractured his skull. He died two weeks after the brawl, without ever regaining consciousness.

Pettit, now serving a 7 1/2 - 15 year sentence at the State Correctional Institution at Camp Hill, PA, showed up in court today to talk about the protection he claimed that Verdi, the former deputy commissioner of the city's Department of Licenses and Inspections, used to provide for the Oasis.

"We would never be shut down" no matter how rowdy the place got, Pettit told the jury. And, thanks to Verdi, the club would always "pass inspection," Pettit said.

The night before Pettit got into the brawl that resulted in the death of a patron, an angry member of a motorcycle gang fired six shots through the front door of the Oasis, Pettit told the jury.

Usually, it only takes only one such disruption to result in L&I shutting down a bar or strip club, Pettit said. But after the shooting and the murder, the Oasis stayed open, without missing a beat.

When Assistant U.S. Attorney Denise Wolf asked why, Pettit replied, "cause we were protected by L&I."

"I was shocked" that the Oasis stayed open, Pettit said.

Pettit, who said he is hoping for a reduced sentence, talked about the problems of running the club that included drug dealers frequenting the joint, and pill-happy strippers who turned into prostitutes in the Champagne room.

Pettit bought liquor for the club. He said that everybody at the Oasis knew the only place the club bought booze from was Chappy's Beer, Butts, and Bets, the distributorship that Verdi had a part-ownership in. The club also employed Verdi's son, Pettit said.

"I like Chris," Pettit said, but he was a substandard employee.

While Pettit was talking about glory days at the Oasis in court today, Judge Berle M. Schiller was repeatedly dressing down the prosecutor. Especially when she called another co-owner of Chappy's a "co-conspirator" of Verdi's.

"Don't give him a label," the judge admonished Wolf. "You haven't proven a conspiracy yet."

"I think I have, Your Honor," Wolf replied.

"Oh, you do," the judge replied sarcastically, before adding, "There's no evidence . . . I'm not sure there is a conspiracy."

Verdi is charged in a seven-count federal indictment with extortion, conspiracy, and honest services fraud. But the judge has repeatedly voiced doubts about whether there was a conspiracy.

In a sidebar conference, when the prosecutor brought up the alleged conspiracy again, the judge was overheard saying loudly, "Ah baloney," before he told the prosecutor to "sit down and do your re-direct."

"I think this this important," the prosecutor protested.

But at the end of the day, when the defense made a motion to toss the conspiracy charge, the judge denied it.

The last government witness to testify today was FBI Agent Jason Blake, a certified public accountant who has tailed Verdi for years.

Blake explained to the jury that when he went over Verdi's tax returns from 2006, 2007, and 2009, the only mention of Chappy's was income paid to Verdi's wife, who was also an employee at the distributorship.

There was no income reported from Chappy's, Blake said, even though bars and nightclubs that were friendly with Verdi were buying hundreds of thousands of dollars worth of liquor from Chappy's.

The Oasis alone, purchased some $489,000 worth of booze from Chappy's, according to Blake. Another bar, Benny the Bum's, spent $570,000 at Chappy's.

Verdi also filed statements of financial interest for the years 2007 through 2010, but none of those forms mentioned that Verdi had an interest in Chappy's, Blake testified.

While Blake was on the witness stand, the government played tapes of wiretapped phone conversations between Verdi and other co-owners of Chappy's.

In one wiretapped conversation, a co-owner warned Verdi that a legal battle between the partners might spill over into court.

"If this goes to court, they're gonna find out about all the other partners," the other partner told Verdi.

"I don't care what comes out," Verdi replied on the tape. "My names's not on nothing."

But then Verdi added, "I don't want to be in the middle of this fucking shit."

Despite the money rolling in, Chappy's seemed to be having financial problems.

In another taped call with his daughter, Verdi seemed in despair about Chappy's, saying, "I personally think I'm going to lose a lot of money."

Verdi's investment in Chappy's, prosecutors said, was $20,000.

When FBI agents interviewed Verdi, Blake told the jury, Verdi admitted he had a part ownership in Chappy's.

Verdi told the agents, "He made a foolish mistake," Blake said. "He acknowledged what he did was against the law."

On cross-examination, Blake agreed with Susan Lin, Verdi's lawyer, that Verdi met voluntarily with the FBI five times.

"He never asked for an attorney," Lin asked.

That's right, Blake said.

Lin questioned Blake repeatedly on Verdi's reputation for helping out business owners, whether or not they bought beer from Chappy's.

"He said he helped everybody," Blake said.

After Blake left the witness stand, the government rested its case, after just three days of testimony.

The judge asked Verdi if he was going to testify in his own defense.

Verdi stood up and talked about all of the false facts he had heard in the courtroom this week while the prosecution presented its case.

"I'm the only one who's gong to be able to explain" what really happened, Verdi told the judge.

The trial resumes tomorrow at 9:30 a.m. with the defendant taking the stand.