THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, October 28, 1994 TAG: 9410280622
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY ALEX MARSHALL, STAFF WRITER
LENGTH: Medium: 91 lines
Three restaurants at Waterside - Legends, Il Porto and Schooners - could lose their liquor licenses because their former operator, Daniel R. Morgan, is a convicted cocaine dealer.
The state Alcoholic Beverage Control Board, which held a hearing on the subject Thursday afternoon in Chesapeake, did not find out about Morgan's conviction until April, despite his involvement in the local restaurant scene for three years.
The ABC contended that Morgan had misled it in a number of areas, including failing to report his 1982 drug conviction in Prince William County.
The ABC could issue fines as well as revoke the liquor licenses for the restaurants. The hearing officer, Susan R. Stevick, said she would issue her ruling in a few weeks.
ABC agents, Morgan and his business associates testified at the agency's regional headquarters on South Military Highway.
Morgan has publicly portrayed himself as owner of this group of Waterside restaurants, including in letters to this newspaper and City Magazine. But Akbar Shah Zadran, a businessman from Alexandria, Va., testified Thursday that he owned 100 percent of MZ Inc., the company that owns Il Porto and Schooners.
When asked by Stevick why he had misrepresented himself to the public, Morgan replied: ``It was always my ambition it would happen.''
Morgan said he received a bi-weekly salary and no percentage of the profits, but believed he would eventually become a part owner of the restaurants.
A new company, Waterside Live, owns the recently opened Legends. Morgan was a 25 percent partner in this venture, which shares offices at Waterside with MZ Inc. The company bought Morgan's shares after the ABC board learned of Morgan's felony conviction.
Morgan would not comment after the hearing. But his attorney, state Sen. Kenneth W. Stolle, said Morgan believed that he had told the state about his cocaine conviction.
Stolle suggested that the ABC may have misplaced the information.
``He's been good for downtown Norfolk,'' Stolle said of Morgan. ``He's one of those guys who has turned himself around and become a useful member of society.''
Morgan pleaded guilty in 1982 in Prince William County of a felony: sale of cocaine. He served about one year of a five-year prison sentence, Stolle said. Morgan was also convicted of driving while intoxicated in 1989; his license was suspended for six months.
Stolle noted that in 1993, Morgan became sole owner of Chick's Beach Cafe in Virginia Beach. He presented a copy of Morgan's ABC application for that restaurant, which he has since sold.
On the application, Morgan had answered ``yes'' to a question asking whether he had ever been convicted of a traffic violation or felony.
A state ABC agent, however, claimed Morgan did not submit the required additional paperwork explaining that answer. The agent said he thought the ``yes'' meant only a traffic violation, so he ran only a traffic check.
Morgan said he had sent the ABC the additional information on his drug conviction. When he received the license, he said, he believed the ABC had granted it knowing about the conviction.
The ABC said it learned of Morgan's criminal record only after he applied for a liquor license for Legends through the new corporation, Waterside Live.
When the city performed a standard background check, an attorney there discovered Morgan's felony conviction and notified the ABC.
Waterside Live wants to open a fourth nightclub at the marketplace called the Bait Shack. Its fate will depend on the ABC ruling, the company told the agency.
Norfolk Mayor Paul Fraim, Councilman Mason C. Andrews and City Manager James B. Oliver were subpoenaed by Stolle to testify Thursday on Morgan's behalf.
Shortly before the hearing, however, Stolle withdrew his request for their appearances. He and the ABC officer instead agreed that the Norfolk officials would have testified that the restaurants were important to downtown.
Fraim said Thursday night that he was not prepared to take a position on Morgan's request for a waiver to continue with the restaurants despite his felony conviction.
``I just recently learned in the last few days that Dan had any type of prior record,'' Fraim said. ``What I know about Dan Morgan is that he seems to have run a very professional, efficient operation at Waterside.'' ILLUSTRATION: [Color Photo]
L. TODD SPENCER
Il Porter and Schooners - with Legends, three Waterside mainstays -
should know the ABC's ruling within a few weeks.
KEYWORDS: ALCOHOL BEVERAGE CONTROL BOARD LIQUOR LICENSE COCAINE
by CNB