December 02, 2016
Dominic Verdi, who took the stand today in his own defense, admitted that he had a conflict of interest when he bought Chappy's Beer, Butts & Bets in 2006, and tried to keep it a secret.
"It was the stupidest thing that I ever did in my life," Verdi said.
The 61-year-old former deputy commissioner of the city's Department of Licenses and Inspections, is on trial for corruption in federal court. On the witness stand, Verdi admitted he lied when the city's Inspector General asked him about whether he had an interest in the South Philly beer distributor.
"I should have told the truth," Verdi said.
But, Verdi said, he never took cash-filled envelopes from anybody, and he never extorted anybody. He also repeatedly denied that he gave favorable treatment to bars and night clubs that bought their beer and liquor from Chappy's.
Verdi is charged in a seven-count indictment with extortion, conspiracy, and honest services fraud.
Verdi told the jury he didn't want anybody to know about his interest in Chappy's because they might ask for preferential treatment.
"I just didn't want people to get the wrong idea," he said. But he tried to draw a distinction between a conflict of interest and breaking the law.
"It may be unethical, but in my mind it was not against the law," he said about his ownership interest in Chappy's.
On the witness stand, Verdi insisted he never made any money off of Chappy's, and that's why he never reported any income to the IRS.
"I would never let anybody buy me dinner, or buy me a drink," Dominic Verdi told the jury
"You don't have to report a loss," he repeatedly said.
In the beginning, Chappy's lost money, Verdi testified. And in the end, Chappy's lost money before it went out of business.
In the beer distributorship's final days, Verdi said, he was loaning Chappy’s money so they could buy beer to sell. The only reason he didn't walk away from his $20,000 investment, he said, was that he didn't want the employees at Chappy's, which included his wife, to lose their jobs.
"I have a sense of family," he said. But instead of walking away from Chappy's, Verdi told the jury, "I should have run away."
When his court-appointed defense lawyer, Susan Lin, asked if he ever took bribes, Verdi replied, "It's not in my nature to do that."
Did he ever threaten anybody that if they didn't buy beer from Chappy's, there would be repercussions from L&I, his lawyer asked.
"Absolutely not," Verdi said.
On cross-examination, Assistant U.S. Attorney Denise Wolf pointed out that TLA, a business that wasn't buying beer and liquor from Chappy's, needed 23 days to get a special assembly occupancy permit.
Meanwhile, several businesses that were buying their beer from Chappy's, and dealing directly with Verdi, got that same permit within a day, city records showed.
Verdi countered that the city's new computer system was notorious for spewing out wrong dates. Indeed, the lawyer for TLA was heard on a government wiretap complaining to Verdi about that very same issue involving an application that TLA filed for a special assembly permit.
On that same tape, Verdi was heard offering to work with the police department to help TLA get that permit.
The prosecutor repeatedly asked Verdi about the Oasis Gentlemen's Club, a strip joint that in 2009 was the scene of a shooting one night, and the very next night, the beating death of a drunken patron by the club's manager.
Why, the prosecutor wanted to know, after two violent incidents, didn't you shut the place down.
"It's not my job," Verdi replied. "My job was compliance."
Verdi explained that as soon as the Oasis became a crime scene, the police took over and L&I wasn't even allowed on site.
Judge Berle M. Schiller must have agreed, because he yelled at the prosecutor, "Come on, stop it now."
It was one of many times today that the judge upbraided the prosecutor. Earlier, when she was arguing with the judge, he told her, "Stop talking, ask questions."
When the prosecutor asked Verdi what he did for the bars and night clubs that bought their beer and liquor from Chappy's, Verdi responded that he did the same thing that he did for everybody.
"I helped them with their questions and their licenses," he said.
The prosecutor repeatedly quizzed Verdi about whether Chappy's was actually losing money, and why he didn't report it to the IRS.
"I don't agree I have to report a loss," he said. "Chappy's was losing money from the beginning . . . I didn't make any money from Chappy's."
Verdi told the jury that he didn’t make any money from bar or night club owners seeking permits. And when he became deputy L&I commissioner, he said, he and his wife started eating out in New Jersey, rather than in Philadelphia.
"I would never let anybody buy me dinner, or buy me a drink," Verdi told the jury.
At 4 p.m., after Verdi had been on the witness stand for two hours, the judge seemed to be tiring of the cross-examination. He asked the prosecutor how much time she needed to continue the questioning of Verdi.
She said she needed 20 minutes. The judge said, take 15.
When Wolf protested, the judge gave her 20 minutes. But at 4:20 p.m., when she still wasn't done, the judge asked how much more time she needed.
When she said 25 more minutes, the judge yelled, "That's it, we're done." And he abruptly ended court, and sent the jury home for the weekend.
After the jury filed out of the courtroom, the judge admonished the prosecutor by saying, "You don't know how to control your time."
"I don't want to aggravate the court," Wolf apologized.
Earlier in the week, the judge criticized the prosecutor, saying she hadn’t presented any evidence to back up the government’s conspiracy charge against Verdi. In a sidebar conference, when the prosecutor brought up the alleged conspiracy again, the judge was overheard saying loudly, "Ah baloney," before he told Wolf to "sit down and do your re-direct."
Before Verdi took the stand Friday, the jury heard from eight character witnesses that vouched for Verdi's integrity.
They included a police captain, a retired police lieutenant, a real estate broker who hired Verdi after he left L&I, and a Roman Catholic priest who was also Verdi's cousin.
The trial resumes at 9:30 a.m. Monday. After cross-examination is through, the lawyers will make closing statements, and the judge will charge the jury.