Source: Reuters
Pubdate: 14 Jan 1998
Author: David Martin 

N.Y. CLUB OWNER GOES ON TRIAL ON DRUG CHARGES 

NEW YORK, Jan 14 (Reuters) - A New York City nightclub owner went on trial
on Wednesday charged with running a drug ring that advertised and openly
sold a wide range of drugs at lavish parties at two of his clubs. 

Canadian national Peter Gatien, 46, the owner of four popular clubs, was
charged in Brooklyn federal court in a five-count indictment with
racketeering and drug distribution. 

Prosecutors said Gatien directly supervised a group of party promoters,
directors and security staff who either promoted drug parties or sold drugs
and provided cash so drugs could be given away during the parties. 

"Thousands of young nightclub patrons would be taking hallucinogenic pills
and snorting cocaine as if it were Halloween candy," said Assistant U.S.
Attorney Michele Adelman in her opening statements. "Drug dealers were
dropping cocaine powder into the hands of patrons like it was sugar." 

"Peter Gatien ran two premier New York City nightclubs as massive drug
supermarkets," Adelman said, referring to the Limelight and the Tunnel. 

She said Gatien made millions of dollars and lured thousands of people into
the Limelight between 1991 and 1996, when the club was closed following
Gatien's arrest. 

The majority of the crimes are alleged to have occurred at the Limelight,
and the Tunnel remains open. Gatien's two other clubs are Club USA and the
Palladium. 

Gatien, who is free on $500,000 bail, faces 20 years if convicted on the
racketeering charge alone. 

Gatien's lawyer, Benjamin Brafman, said in his opening statement: "Peter
Gatien is not a drug dealer and did not operate a drug supermarket. He is a
creative nightclub genius who ran four of the most successful nightclubs in
New York City." 

Brafman said Gatien admitted to having a drug problem and that drugs were
sold at his clubs. But he said that did not mean that Gatien supported drug
dealers. 

Adelman said club managers hired and supported as many as 50 "house
dealers" who operated within the club, while security tossed out rival
dealers. Drugs sold inside the clubs included cocaine, Ecstasy, the
mind-altering Rohypnols, or "roofies," and Ketamine, an animal tranquilizer
known as "Special K." 

Drugs were sometimes distributed in connection with a party's theme, such
as beach parties where "sand dunes" of Special K were laid out for patrons
to sniff, she said. An "Emergency Room" party had one club employee dressed
as a doctor and passing out bogus prescriptions for drugs that were filled
by a dealer. 

The first witness to testify was Michael Caruso, a former club director who
was described as Gatien's right-hand man and is cooperating with
prosecutors. Caruso testified that he made $500,000 from drug deals in five
years of working for Gatien.