ABC LICENSES IN DANGER AT CLUB

Hearing Officer Cites Drug Sales

A hearing officer for the Virginia Department of Alcoholic Beverage
Control recommended yesterday the suspension of a Shockoe Bottom
nightclub's licenses to sell alcohol because of drug transactions at
the club. The enforcement division of the agency contended that the
licenses of Fahrenheit Restaurant and Club should be revoked because
the club was a meeting place for the use and sale of drugs and because
its owners allowed drug use on the premises. The hearing officer,
Michael J. Oglesby, struck the second allegation after a hearing last
month because he heard no evidence that the owners of the club at 119
N. 18th St. were aware of the drug dealing. On the other hand,
participation in or knowledge of illegal drug activity by the
management or staff of a club is not necessary to show that the club
is a meeting place for drug dealing, Oglesby said. He found that two
drug dealers sold Ecstasy or cocaine to informers on at least four
occasions.

The dealers also testified that they had sold drugs in or arranged
transactions at the restaurant on other occasions, Oglesby noted. "The
seriousness of a violation involving illegal drug activity on the
licensed premises, even without the knowledge or encouragement of the
licensee, calls for a definite and substantial suspen-sion of the ABC
licenses," he concluded. He recommended suspending the licenses for 60
days but said the club could reduce the suspensions to 45 days by
paying $2,000 in civil penalties. Paul T. Buckwalter II, an attorney
for Fahrenheit, said Oglesby's decision "is a complete vindication of
my client" in that he found no knowledge of the drug dealing by club's
management or staff. "He just adopted a very strict interpretation of
the statute" in essentially finding that any drug dealing at the club
was a violation, Buckwalter said. If that is the law, "every single
restaurant is in jeopardy in Virginia." Buckwalter said he expects to
appeal the recommendation to the ABC board to get a different
interpretation of the law. Fahrenheit was one of three clubs targeted
by ABC agents and Richmond and state police for allegedly allowing
drug dealing. Cafine's at Fourth and Grace streets was the first to
come under scrutiny, largely for the rave nights it promoted for
patrons in their late teens and early 20s. Oglesby recommended the
revocation of its alcohol licenses because he concluded that the use
of Ecstasy occurred with the knowledge and encouragement of its
owners. The owners have appealed the revocation to the ABC board, and
a hearing is set for Aug. 14. Despite the appeal, Cafine's is out of
business because the landlord evicted the owners. The third club,
Casablanca at 6 E. Grace St., was before another ABC hearing officer
yesterday.

The hearing began last month but was continued so that the club's
attorney, Michael P. Lafayette, could offer to settle the case with
the board.

But the board rejected Lafayette's offer of a 10-day license
suspension and a $3,000 fine, and the hearing resumed. The club's
owner, Michael Pace, denied any knowledge of drug dealing at the
restaurant, and Assistant Attorney General Emily Wingfield presented
no testimony that Pace was aware of it. John Cecil Whitehead, who is
serving four years in prison for selling Ecstasy and cocaine at the
clubs, testified that he sold the drugs at Casablanca. Another witness
said he had bought drugs there two or three times, and a bartender
said he had bought cocaine from Whitehead but not at the club. The
hearing officer, Clara Williamson, said she would issue a
recommendation within the next few weeks.