Hardesty grand jury calls on assistant

Woman's husband says boss told her to tell IRS the truth

`Don't change anything'

July 04, 1999|By Laura Sullivan and Cheryl Lu-Lien Tan | Laura Sullivan and Cheryl Lu-Lien Tan,SUN STAFF

A federal grand jury hearing evidence against Annapolis restaurateur Jerome Hardesty, suspected in a 10-year tax evasion scheme, has called in several people familiar with his record-keeping in recent weeks, including his bookkeeper, who regards herself as almost a daughter to him.

Christina L. Nokes, Hardesty's longtime assistant who has worked at his Middleton Tavern for almost 20 years since graduating from high school, testified Monday before a federal grand jury about the daily operations of the prominent Annapolis restaurant, according to her husband, R. C. Nokes.

Christina Nokes is key to making a case against Hardesty because of her intimate knowledge of his operations, said sources close to the investigation.

She declined to comment, but R. C. Nokes said Hardesty, a man the couple consider a close friend, instructed her to tell the truth.

While Hardesty was not available for comment, his attorney George Petros downplayed the importance of Nokes' information and said her testimony was "not a concern." He would not comment on any specific allegations.

"[Her testimony] was all part of the normal course of the investigation," he said. "It wasn't Doomsday. From the beginning, [Hardesty] has cooperated 100 percent with federal authorities. We are sure that in the end the air will be cleared."

No charges have been filed against Hardesty.

Sources said investigators are looking into reports that while Middleton's brought in almost $4 million from food and liquor sales last year, about $250,000 of that was missing from the books.

Hardesty is suspected of having siphoned more than $1 million over the past 10 years, partly through changing numbers on restaurant computers to over-report money spent on food and by underreporting cash receipts, the sources said.

Hardesty could not have done so without the knowledge of his upper managers, including Nokes, said the sources.

Computer installer called

In addition to Nokes, federal officials have called before the grand jury William S. McKelvy, an Eastern Shore computer system installer, who set up the restaurant's record-keeping software. His family confirmed his grand jury appearance, but he could not be reached for comment.

Internal Revenue Service agents have investigated Hardesty's business operations for two years, culminating in a February raid of his house, his two City Dock restaurants -- Middleton Tavern and O'Brien's Oyster Bar and Restaurant -- and Nokes' house. They seized business and personal computers, files and about $100,000 in cash.

The IRS is looking at whether Hardesty funneled money from his businesses he did not report into property in Costa Rica, sources said.

Husband denies wrongdoing

R. C. Nokes said his wife has never taken any money from Middleton Tavern.

"If your boss does something wrong, is that the employee's fault?" he asked, emphasizing that he does not know whether Hardesty did anything wrong because he and his wife don't discuss Middleton operations. He said Hardesty has been a good friend to both of them for many years.

"Getting her to testify against him is like getting someone to testify against their father," he said. "He was at our wedding, and he was there for us when our kids were born. Whenever my wife needed to take time off to take our daughter to the doctor, he never said anything. Family always came first."

Christina Nokes had taken their 8-year-old daughter to the doctor the morning of the Feb. 23 raid and was surrounded by federal agents with bulletproof vests when they were done with their appointment, R. C. Nokes said. The agents escorted Nokes back to her house, where they barred her from making any phone calls and made her and her sick daughter sit on the couch for almost four hours, he said.

"Jerry apologized repeatedly to my family for what we went through," R. C. Nokes said. "He's been very good to us. Jerry Hardesty hasn't intimidated anybody. He told my wife to cooperate 100 percent. He said, `Don't change anything.' I have respect for him for that."

Hardesty has remained close to the Nokeses even after the IRS raid, paying for his assistant's attorney and taking the couple to dinner the day after her testimony, R. C. Nokes said.

"People make him out to be the Al Capone of the 20th century," Nokes said. "The difference is Al Capone didn't cooperate with the authorities. Jerry has."

Pub Date: 7/04/99

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