IRS raids landmark Annapolis taverns

O'Brien's Oyster Bar, Middleton closed as agents seize files

February 24, 1999|By Cheryl Lu-Lien Tan and Laura Sullivan | Cheryl Lu-Lien Tan and Laura Sullivan,SUN STAFF

Federal agents shut down two landmark Annapolis restaurants for much of yesterday while they seized files and computers from their offices, an Internal Revenue Service spokesman said.

The searches at O'Brien's Oyster Bar and Restaurant and Middleton Tavern were "of a financial nature," said Domenic J. LaPonzina, the spokesman.

Businessman Jerome Hardesty owns both restaurants in the historic district near the City Dock. He could not be reached to comment yesterday.

LaPonzina said agents also searched two homes in Anne Arundel County and a business office in downtown Annapolis affiliated with the restaurants. He would not comment on specifics of the case. Stephen Schenning, first assistant U.S. attorney, also would not comment.

Matthew Dumbroski, the manager of O'Brien's, and Douglas Brutger, the Middleton manager, said their restaurants, closed until 5 p.m. yesterday, would be open today. They said they did not foresee any more closings.

Middleton Tavern, built before 1700, is a city landmark. O'Brien's has long been known as a General Assembly watering hole.

"They're big-time, well-known restaurants," said Mike Riordan, owner of Riordan's Saloon, which is equidistant from both restaurants. "Everybody's talking about it."

Yesterday afternoon, armed IRS agents milled inside O'Brien's, turning away customers who dropped by during the search. The agents would not comment on the raid.

At Middleton Tavern, managers propped up a chalkboard outside the restaurant's locked front door announcing that it was closed and would reopen at 4 p.m.

The raid surprised city officials and would-be diners. Chief Joseph S. Johnson of the Annapolis Police Department said he first learned about the raid when an IRS official called him about 10 a.m. yesterday.

"They said, `We may need some assistance,' so we had some officers stand by," Johnson said. "They didn't tell me what it was all about."

Johnson said the IRS agents did not call on his officers. IRS officials instructed Johnson, Mayor Dean L. Johnson and Thomas W. Roskelly, Annapolis city spokesman, to refer all queries about the search to the U.S. attorney's office in Baltimore.

Riordan said the raid stunned downtown business owners. He said he first heard about it late in the morning when people delivering liquor and food to restaurants downtown told him IRS agents had barred them from entering O'Brien's and Middleton.

"We've been here 22 years and this is the first time I've seen anything like this," Riordan said. "At first I thought it was just an audit, but the nature of this is a little mystifying."

Hardesty bought Middleton Tavern in 1968 and O'Brien's from its founder Sike Sharigan in July 1993. He handed over management of O'Brien's to his nephew, 32-year-old Thomas A. Hardesty, but remains a consultant for the restaurant. The Hardesty family also owns funeral homes and real estate in the Annapolis area.

Jerome Hardesty founded the Maryland Wine Festival in 1987 to showcase regional vineyards. In 1992, Maryland winery owners boycotted the event, complaining that they didn't get a fair cut of the profits.

In 1997, owners of 10 Maryland wineries unsuccessfully tried to seize control of the event from Hardesty in a battle that left bad feeling between both parties.

Pub Date: 2/24/99

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