Making a Racket?

Please note: This article is published as an archive copy from Philadelphia City Paper. My City Paper is not affiliated with Philadelphia City Paper. Philadelphia City Paper was an alternative weekly newspaper in Philadelphia, Pennsylvania. The last edition was published on October 8, 2015.
Making a Racket?
Making a Racket?
Making a Racket?

[ investigations ]

                                                                                                                 Photo | Mark Stehle
FROM THE BAR: Attorney Leon King is representing Fiso Lounge owner Frank
Funaro in his suit against the city.

A few weeks ago, news broke that the FBI is investigating a possible extortion racket that may extend to the Philadelphia Police Department, the Department of Licenses & Inspection, tow truck companies, strip clubs and a beer distributor believed to be tied to a longtime city employee.

So far, the only solid details that have emerged center around an alleged scheme in which bar and restaurant owners were told to purchase beer from Chappy's Beer Butts and Bets, a South Philly distributor, to "curry favor" with L&I.

No charges have been filed; but on Feb. 17, Dominic Verdi, an L&I deputy commissioner on the city's Nuisance Task Force — and, according to a Fox 29 report, a part-owner of Chappy's — was demoted and then abruptly resigned after more than 35 years with the department, adding to the speculation that this investigation is far-reaching. A lawsuit expected to be filed this week, which City Paper has obtained an advanced copy of, will likely fuel that speculation.

In the complaint, Frank Funaro, owner of South Street club Fiso Lounge, claims to have been the victim of harassment by police officers, state police and L&I workers, including Verdi himself, in retaliation for reporting bad police behavior and because he failed to purchase beer from Chappy's. The suit, filed by attorney and former Prison Commissioner Leon King (now running for Common Pleas judge), names more than 40 public officials.

It also reveals that city officials had been told about the alleged activities of Verdi and others more than a year ago. Funaro's allegations are, of course, only allegations, but they raise questions about how many people are involved in whatever it is, exactly, that the feds are investigating — and who knew about it.

Funaro's troubles began, he alleges, in 2008, after he hired a few police officers to work a private security detail at his bar. When some of them began acting rude to customers, he complained to their district captain as well as to City Council President Anna Verna's office. That, alleges Funaro, is when the retribution began.

On May 10, 2009, the lawsuit says, Fiso Lounge was visited by a group of "numerous heavily-armed police officers and other officials" from the city's multi-agency Nuisance Task Force — including Verdi.

Funaro said the officials "used loud profanity" and "banged their nightsticks on tables ... and otherwise terrified and scared customers" before ordering the club closed for fire safety and electrical issues. Funaro says he quickly fixed the problems. A few weeks later, he was nonetheless served with a cease-operations order by L&I. Funaro appealed, and the L&I Review Board sustained his appeal in June 2009, overturning the order.

Shortly thereafter, on July 11, 2009, Funaro says, Nuisance Task Force members came back with Kenneth Gassman, an L&I employee later indicted for an extortion scheme. This time, police and other city officials allegedly pepper-sprayed customers, broke the DJ's equipment and confiscated the cell phone of a customer filming the raid. CP could find no record of violations or citations issued against Fiso Lounge in July. Calls to Verdi and a police officer allegedly involved were not returned.

Sometime in the middle of all this, Funaro says a fellow bar owner advised him to buy beer from Chappy's. Funaro says he was even given a phone number for Greg Quigley — according to The Philadelphia Inquirer, a partner at Chappy's who pled guilty to a perjury charge related to an organized-crime gambling scheme — in order to "set this fix."

At this point, he says, Funaro hired attorney King, who proceeded to alert public officials of the alleged extortion racket. On Feb. 3, 2010 King detailed the alleged scheme in a letter to the heads of the Police, L&I, the Managing Director, the Inspector General, Deputy Mayor for Safety and Law departments.

"The Nuisance Task Force has been abusing [their] authority," he wrote. "From what I can tell, the abuse is long-standing and widespread." King named names, including Verdi's. City Paper contacted those city agencies and asked if they took any action. Inspector General Amy Kurland says she was aware of a related federal investigation at the time and referred the letter to the FBI and the U.S. Attorney's Office. Mayoral spokesman Mark McDonald, commenting on behalf of all the other city agencies King contacted, says the city referred King's letter to the "appropriate authorities" but declined to specify which. Police spokesman Lt. Ray Evers will not comment on open investigations.

The story gets more convoluted. In 2010, Funaro's bar was raided again, this time by state police, and Funaro was charged with three counts of serving alcohol to minors. Funaro says this, too, was part of a conspiracy: He claims to have been apprised of the raid, and asked for a bribe by state police. State Police Sgt. William LaTorre calls assertions of wrongdoing by state police "incorrect." King says his client's case shows the city failing to take action: "The only reason Dominic Verdi was demoted is because the feds stepped in."

(holly.otterbein@citypaper.net)

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