Beta Battles On in Fight to Keep Liquor License

“Beta’s primary objection is to the Hearing Officer’s significant reliance on certain aggravating circumstances in making his recommendation,” says Aaron Acker, a Springer and Steinberg attorney representing Beta and its owner, Valentes Corleons, aka Hussam Kayali.

On December 8, a hearing officer hired by the City of Denver recommended that Beta lose its liquor license because of law and code violations.

“When [the owner’s] continued operation of the club generated escalated inspections, he resorted to touting that he is an organized crime organization member as an intimidation tactic. The only reason for him to assert this status is to gain improper leverage over the City staff. It was otherwise irrelevant to their interaction. The implicit message to the staff is that they may suffer harm due to his displeasure with their regulatory actions. This tactic is serious and unacceptable, particularly for one with a cabaret license, where character and reputation is a licensing factor,” wrote Federico Alvarez, a former Denver District Court judge who served as the hearing officer for an Excise and Licenses liquor license show-cause case against Beta, filed in August by the city.

Related Stories

I support

Local

Community

Journalism

Support the independent voice of Denver and
help keep the future of Westword free.

In his recently filed objection, Acker argues that Alvarez misapplied the rules in making his recommendation.

“The Hearing Officer gave improper consideration to aggravating circumstances in making his recommendation, specifically his consideration of Mr. Kayali’s ‘character and reputation’ as a basis for recommending a revocation of the license,” Acker argues. “In reaching his decision, the Hearing Officer disregarded the specific legal guidance and incorrectly applied his own standards of relevance.”

Katie Conner, one of the Denver city attorneys who argued the case, filed a response to the objection. “While not specifically charged in the Complaint, the character and reputation of a licensee is always relevant and can and should be considered by a hearing officer in determining the licensee’s fitness.” she says.

With objections and responses now in hand, the executive director of the Department of Excise and Licenses could soon make a final decision on whether Beta loses its cabaret and liquor licenses. Ashley Kilroy, the current head of the department, is leaving as of January 7, and Molly Duplechain will then serve as interim executive director.

“In the event the Director confirms the recommended decision, Beta intends to bring additional challenges through the District Court,” Acker notes.

Alvarez penned his recommended decision after two full days of dramatic testimony at the November hearing from undercover detectives, moonlighting cops and Corleons himself. The former district court judge concluded that the city had proven by a preponderance of the evidence that Beta had violated laws and codes related to disorderly conduct and consumption of alcohol after-hours — specifically by people hanging out with Von Miller, Quavo of Migos and two Denver Nuggets players — as well as employing unlicensed security guards and failing to post occupancy limits, among other violations.

However, Alvarez also determined that the Denver City Attorney’s Office had failed to prove its case against Corleons and Beta related to permitting real and imitation drug-dealing on site, noting that “the drugs or imitation drugs involved were of a small size and easy to conceal. It is therefore difficult for anyone other than those involved to know specifically that it occurred and to stop it.”

But the violations themselves weren’t the deciding factor for Alvarez. There were two “extraordinarily aggravating” factors that “weigh in favor of revocation of Respondent’s Licenses,” he said.

“Mr. Kayali escalated disagreements during inspections into attempted intimidation of the [Denver Police Department] and [Denver Fire Department] staff by declaring he was a member of the La Cosa Nostra,” Alvarez determined, adding that  “Kayali attempted to bribe Officer [Adam] Glasby to influence this legal process, offering payment for assurance that things would come out right, from his point of view.” Glasby, who worked as a moonlighting cop at Beta over the summer, testified during the November hearing that Corleons had tried to offer him $10,000 to help resolve the city’s case against Beta in his favor.

Corleons denies trying to bribe Glasby. As for his claim that he’s a “made man” in the Sicilian Mafia, he explains, “I was introducing myself, and they took it as a threat. I was telling him, ‘Look, man, I’m an important guy. I’m a man of honor.'”

Corleons says that the city has targeted him because his patrons are mostly Black and Latino, an allegation that the city denies.

The former owners of Beta, Brad Roulier and Mike McCray, also filed an objection to Alvarez’s recommended decision, saying that the November hearing should have been postponed, since there were still issues with the transfer of the liquor license from Roulier and McCray to Corleons. Alvarez denied that request for postponement during the hearing.

“Revocation of the Licenses will have devastating consequences to McCray, and Roulier, as the result of a hearing where they were not allowed to participate,” James Beimford, a lawyer for the two former owners, wrote in the objection. A club drops significantly in value if it loses its liquor license.

During the hearing, McCray testified that he and Roulier have still not been paid by Corleons for the club. Corleons, on the other hand, contends that the club had debts that he didn’t know about when he bought it.

The city’s case against Beta relies mainly on evidence gathered through a Denver Police Department investigation in the spring and summer, which even included undercover detectives attending the once-world-renowned club on two weekends in June.

That investigation also provided ammunition for Denver’s second front in its campaign against Beta: The City Attorney’s Office filed a public-nuisance case against the club in mid-September, which could result in it being closed altogether. The next hearing is set for January 13.