ABC hearing into strip club charges continues today

A few hours in the Champagne Room didn't come cheap for state Department of Alcoholic Beverage Control agents investigating a strip club in Richmond's Shockoe Bottom.

Two agents testified at a license-revocation hearing yesterday that they bought two bottles of Dom Perignon at $250 each to take two dancers, one of them 19 years old, into the side room on the first floor of Velvet at 3 S. 15th St. early on Feb. 13, 2008. They bought two more bottles to remain there past the 2 a.m. closing time for alcohol sales.

While there, a confidential informant paid by the state gave $100 each to the two dancers to strip -- and took off his own clothes to play pool with the pair.

The evening ended after the two agents -- a man and woman posing as half siblings -- pooled their last $450 to pay the two women to engage in oral sex on a couch out of sight of the club's omnipresent video cameras.

The agents and the former dancers testified yesterday that all of this occurred with the permission of Velvet owner Samuel J.T. Moore III, who had to decide whether to allow the after-hours alcohol sales and paid sex between two "contract entertainers."

A club employee who supervised the dancers said "the sex was OK, as long as it wasn't with a patron," testified Susan R. Day, an ABC agent for whom the performance was arranged as a "bi-curious" observer.

The incident lies at the heart of a state investigation that could cost the club its license to sell alcohol. A two-day hearing is scheduled to resume today at the Virginia Department of Alcoholic Beverage Control in Richmond.

L.A. Diner, the limited liability company controlled by Moore that owns the club, faces 11 charges that it violated Virginia's ABC laws. The state alleges that Velvet allowed underage drinking and drunkenness; violated restrictions on operating hours and removal of alcohol from licensed premises; and fostered public nudity and other criminal activity, such as prostitution and the sale of illegal drugs.

Yesterday's testimony by the two agents, the informant and the two dancers offered a jolting view of how the club operated in the months leading to a raid by law-enforcement agencies early on Feb. 23, 2008. The raid resulted in three misdemeanor convictions against Moore for two counts of having sex with a 17-year-old girl and unlawfully filming sex with an 18-year-old woman who was with her.

Moore, who did not plead guilty but agreed the evidence was sufficient to convict him, served 30 days of a 60-day jail sentence that was reduced for good behavior.

But yesterday's testimony also raised questions about how the ABC department conducted the investigation.

According to testimony, most of the illegal activity, including the purchase of cocaine from one dancer as well as illicit sex, was suggested by the agents or the informant, who said the state paid him based on the results of his undercover work. Both agents paid for lap dances from partially clothed or nude dancers during the investigation between Dec. 1, 2007, and the raid on Feb. 23, 2008.

The lap dances occurred on the third floor of the building that houses Velvet. The dancers testified they were required to perform a minimum of four lap dances a night or be fined. They escorted customers from the first-floor club, often carrying bottles of champagne or glasses of wine, through Moore's office and residence on the second floor, where they said he monitored activities around the building with a video surveillance system.

Only the first floor is licensed by the state to sell alcohol, which is not supposed to be taken off the licensed premises.

Moore's Virginia Beach lawyers, James Neal Insley and Kevin E. Martingayle, argued successfully that Moore had not been convicted of either a felony or a crime of moral turpitude, as one of the charges states.

Hearing Officer Clara A. Williamson agreed that none of Moore's misdemeanor convictions in June 2008 constituted a crime of moral turpitude, defined as lying, cheating or stealing. She blocked testimony about the videotape of Moore engaged in sex with the minor and an 18-year-old.

His attorneys also objected that the state had not shared all evidence with them before the hearing, as required by the rules of discovery. The two dancers who had engaged in sex for the agents had prostitution charges dropped in exchange for guilty pleas on misdemeanor charges of public nudity and cooperation in the ABC investigation.

The plea agreement was not provided to the defense lawyers until they asked about a reference to it in the dancers' conviction record during yesterday's hearing.

Contact Michael Martz at (804) 649-6964 or mmartz@timesdispatch.com.