Downtown Babylon

by Jordan Green

The marquee above Rocco Scarfone’s N Club, the only electronic billboard on Elm Street, displays a visual sequence showing sharks nosing around the depths of the sea, then an infantry line of orange taxis in an urban scene that evokes New York City’s 8th Avenue, before announcing, “Welcome to Greensboro’s Times Square.”

When Joey Medaloni owned the building and the business, which houses both the N Club and the Red Room, the aforementioned venue was advertised as “often imitated, never duplicated,” while the latter entity was tagged “the Studio 54 of Greensboro,” alluding to the New York City nightclub infamous for a celebrity clientele, heavily sexualized atmosphere and rampant drug use. A former stripper from Reidsville who used charm, business savvy and hard work to transform himself from an entertainer to a nightlife impresario and business owner, Medaloni is widely credited with making downtown Greensboro a regional entertainment destination. He opened the N Club in 1998, and Much and Heaven later. By 2006, he owned both buildings. He also acquired Babylon, a pioneering nightclub also on South Elm Street, and turned it into the Sky Bar. “From 2000 to 2003, the N Club was the place to be,” said one bartender who requested anonymity to avoid offending the once and perhaps future prince of downtown nightlife. “Everybody wanted to work there.” To this day, many of Medaloni’s former employees remain loyal to the man, citing his doting attention to staff and scrupulous management of crowds at his businesses. “Joey caught a lot of flak with people on Elm Street calling him racist, biased and unfair,” said Michael Umphenour, a former employee. “He had strict guidelines for making sure it was a safe environment. He enforced a dress code. He kept traffic controlled. Joey controlled Elm Street. If city planning or the police department had a gripe about too many cars being in the street in front of his clubs, Joey would do his best to make sure it was addressed.” And though he sold the last of his two downtown properties almost two years ago, Medaloni established a formula in the downtown nightlife industry that has been altered little since his departure: personal mystique and an escapist image evoking an urban sophistication out of proportion to the city’s provincialism and modest size — ultimately a fa’ade concealing hard-nosed business acumen, raw competition and sometimes caddish personal behavior. “The downtown bar district has and remains fiercely competitive, as it draws its customer base from only a limited pool of customers,” contended two nightclub investors from Charlotte and Raleigh in a civil lawsuit last year. Deron Justin Allen and Dorsey Milburn III had hoped to get in on the action when they bought the Sky Bar business from Medaloni. They leased the building at 221 S. Elm St. from Medaloni and hired him as a temporary consultant. It didn’t end well for the two out-of-town prospectors: Medaloni’s four nightlife entities up the street — the N Club and the Red Room at 117 S. Elm St. and Much and Heaven at 113 S. Elm St. — flourished, but the Sky Bar would close within four years, amid a flurry of reports of drug use and violence. Medaloni sued Allen Brown Investments, the company formed by the two investors, last year for unpaid rent and compensation for damages to the premises. Allen and Brown, in turn, argued that Medaloni had embarked on a deliberate campaign to destroy their business to benefit his own clubs and grab a larger share of the market. The three settled out of court last month. The property was later leased to a Mexican restaurant, which has since closed. Medaloni, who is now 37, appeared to have accomplished his goal by 2006. Rumors abounded that he was contemplating a run for mayor. He sold the N Club for $1.8 million that summer to Rocco Scarfone, a Brooklynborn entrepreneur with experience in nightclubs, sports franchises and limousines. Then, in early 2007, Medaloni sold Much and Heaven for $950,000 to a partnership that included Scarfone and two businessmen who are significantly less well known. Scarfone, with a 25 percent stake in the property and business, was hired to run day-to-day operations. Dr. Lenin Peters, a High Point doctor originally from India who was said in 2005 to be worth $26 million, is another partner. A founding member of Thomasville-based Bank of North Carolina, Peters holds a seat on the bank’s board of directors. Among his fellow directors is Charles T. Hagan III, the husband of US Sen. Kay Hagan. Peters entered the partnership after separating from his wife. Peters declined to comment for this story. The third partner is Greg Harrison, a Sedgefield resident with investments in the temporary staffing business. Scarfone succeeded Medaloni as the public face of downtown nightlife, but Medaloni’s departure from Greensboro would only add to his mystique. A website copyrighted 2007 describes Medaloni as a master captain who has traveled between the East Coast, the Bahamas and Mexicofor the past 10 years. A lawsuit filed by Medaloni in December statesthat he is currently a resident of Miami Beach, Fla. and resides on aboat he owns that is primarily berthed in Miami Beach and the US VirginIslands. “At the time of the sale, I said, ‘I’m going to takesome time off after ten years of working with no vacation,’” Medalonisaid recently. “I will return to Greensboro someday, and Idon’t know which way the wind will blow, if I’ll get into politics orwhat.” The sale of the two businesses came with the stipulation thatfor five years Medaloni would not open a membership nightclub within100 miles of the N Club, and that for 10 years he would not so much aspublicize any bar, restaurant, nightclub or livemusic venue within 100miles of Much and Heaven. Interviews with two former Medaloniemployees and court documents suggest that staff loyalties did noteasily transfer to Scarfone once he assumed control of operations atthe N Club and Much. Joey Medaloni’s younger brother, Matthew, has longperformed as DJ Spinny at the N Club and Heaven but has evidentlyharbored ambitions to follow his brother into the management side ofthe business. Scarfone alleged in an affidavit that Joey approached himabout joining him in a new venture at Childress Vineyards in DavidsonCounty, but Scarfone rebuffed the overture. So when Matthew opened anew venue near Guilford College called the Mixx Martini Bar andRestaurant last October, it touched off acrimony and litigation. “Inbusinesses like Mixx and the Elm Street Entertainment Businesses,novelty and the existence or lack of existence of similar competitorsmeans a lot,” Scarfone said in a Dec. 9 affidavit. “Moreover, to agreat extent these businesses are subject to irreparable harm from new,similar venues, especially in a city the size of Greensboro. This is why the non-compete agreements refer, among other things to the ‘unique talents’ of Joey Medaloni.” Itmight have seemed a personal slight to Scarfone that some of the formerstaff from Much were now working at the Mixx. “Many of the peopleemployed or utilized by the Mixx are those previously employed orutilized by Much,” Scarfone said in the affidavit. “Indeed, themanager, greeter, valet, barback and bartender for the Mixx are allpersons with long-term relationships with Joey, who also worked atMuch.” Joey Medaloni’s lawyer, Kenneth Gumbiner, seemed to scoff at theargument in a riposte by formal letter: “I will repeat what I havealready said: ‘Joey’s brother worked with Joey for over 10 years andknows the same people that Joey knows.’” The tone ofScarfone’s affidavit comes across as belittling in its characterizationof the younger Medaloni brother. “I have known Matthew Medaloni since2006,” he says. “Prior to his involvement with the Mixx, Matthew hadnever operated a restaurant, bar or nightclub. MatthewMedaloni used to clean the N Club and Heaven, and he worked as a DJ atthe N Club and Heaven. He has never managed or owned an entity like theMixx or any of the Elm Street Entertainment Businesses. I also knowfrom having spoken with Matthew as recently as this summer that he doesnot have the financial capability to furnish even a small portion ofthe necessary capital to operate a restaurant, bar or nightclub, or tosecure a loan for the same.” Scarfone reported that Much, Heaven andCarmine’s, the restaurant he operated at 113 S. Elm St., together lost$50,000 in business from mid-October through mid-December as a resultof the Mixx’s opening, and that if Matthew Medaloni’s martini barcontinued to operate, Much and Heaven might go out of business. JoeyMedaloni has steadfastly maintained that he has invested no money inthe Mixx and has done nothing to promote or publicize the bar,notwithstanding a few visits to look the place over at his brother’sinvitation. Scarfone’s lawsuit against Medaloni for allegedviolation of the non-compete agreements was returned in kind with alawsuit alleging that Scarfone had defaulted on payments for the N Cluband Much. Scarfone, in turn, denies the allegations brought byMedaloni. Curiously, the outward squabbling between Scarfone and the Medaloni brothers masks the reality that financing for Muchand the Mixx has come from the same person. Greg Harrison is a partnerin the company that owns the property and businesses at 113 S. Elm St.,and an investor in the Mixx. “I have been told that Mr. Harrisonconfirmed to you that he is the principal investor in the Mixx and thatJoey Medaloni has nothing whatsoever to do with either the financing orownership of the Mixx,” Gumbiner said in a letter to Amiel Rossabi,Scarfone’s lawyer. “I believe he also confirmed that Joey has notoperated, promoted or publicized the Mixx because he is aware of hisnon-compete and has been careful to observe it.” Harrison’s primarybusiness activity is not nightclubs. He has been working inthe temporary staffing industry since at least 1999. Harrison is tiedto a staffing agency that is currently under suspicion of hiringundocumented immigrants and manufacturing fraudulent identificationdocuments in Oregon. In December 2006, The Business Journal reportedthat two of Harrison’s staffing agencies, US Staffing and US Labor,were acquired by StaffCo Management Group, which was re-branded asAmerican Staffing Resources. Harrison confirmed to ***YES! Weekly***that he served on the company’s board as a creditor after theacquisition. In April 2007, Harrison formed Trinity Operationswith Rocco Scarfone and Dr. Lenin Peters. In May, they bought Much andHeaven from Joey Medaloni. Whether coincidentally or not, the followingmonth would prove to be eventful for American Staffing Resources. OnJune 12, federal agents with Immigration and Customs Enforcement, orICE, raided Fresh Del Monte Produce, a fruit and vegetable processingplant

in PortlandOre., and detained more than 160 illegal immigrants that were allegedlyhired by American Staffing Resources. ICE also executed a searchwarrant at the Portland offices of the staffing company, where theyseized employment applications and rosters, Social Security cards andcomputer drives that day, an agency spokeswoman said. Three peoplepeople identified by ICE as American Staffing Resources workers wereindicted. Spokeswoman Lorie Dankers told YES! Weekly: “The investigation is not closed and is considered an ongoing investigation.” ICESpecial Agent Maximillian Trimm, the lead investigator in the case,said in an affidavit in 2007: “I have probable cause to believe thatthe businesses known as American Staffing Resources and Fresh Del MonteProduce are engaged in a continuing criminal conspiracy that includesthe unlawful employment of illegal aliens and the manufacturing,delivering and possession of illegal identification documents.” Harrisonsaid that after the raid, American Staffing Resources’ lendersforeclosed on the company; he bought 60 percent of the assets; and agroup of investors asked Harrison to run the new company, which iscalled Compensation Management, located at 307 S. Swing Road inGreensboro. Harrison said he is the chairman of the board. Harrisonsaid he was unaware of any ongoing criminal investigation of thestaffing company. “From what I understand, they cooperated completely,and there were no issues with the company. There was a rogue employeethat worked at the facility and created some documents.” Aformer maintenance manager at Fresh Del Monte reportedly told Trimmthat “when the hypothetical scenario of immigration agents showing upat FDMP to execute an immigration raid was posed, everyone agreed thatAmerican Staffing Resources would ‘take the hit’ due to the fact thatthey did the actual hiring, and that FDMP managers could just claimignorance of their knowledge of the production workers’ illegalstatus.” Federal investigators and prosecutors would concludethat up to 90 percent of the employees hired by American StaffingResources to work at Fresh Del Monte were illegal aliens using stolenSocial Security numbers. Trimm’s affidavit states that aconfidential informant wearing surveillance equipment paid a womannamed Margarita Amezcua-Salvador at American Staffing Resources’Portland office to obtain a fraudulent Social Security card for him sohe could work in the plant. Court documents indicate that Amezcua didnot speak English and ended her formal education after first grade. The investigation found evidence that workers were paid $7 an hour — 80 cents below Oregon minimum wage. Workers, mainly women and mostly from Mexico and Guatemala— including a number of children — reportedly endured three inches ofwater on the production floor, and wore regular sneakers or shoes thatwere soaked with water even though the workers were supposed to havebeen provided with boots. The confidential informant told agents thathe found electrical cords laying beneath standing water and dirtyconditions in the bathroom and cafeteria. A former maintenancemanager said forklift operators were not properly trained andsupervisors constantly berated workers with threats that they would befired if they did not work hard enough. Drug sales werereportedly rampant at the Fresh Del Monte. Jose de Jesus Zarazua-Lopez,a manager at the plant who was hired by American Staffing Resources,had been previously convicted of trafficking heroin, and anothermanager was said to have been actively selling drugs and laundering theproceeds through a store owned by his wife in Portland. One formeremployee said he observed drug transactions between employees and thetaco truck servicing the parking lot during lunchtime. Zarazua pleaded guilty last February to unlawfully residing in the United Statesafter being convicted of an aggravated felony. He received a reducedsentence of 27 months in prison in exchange for providing “substantialassistance” to the government andagreeing to testify in any grand jury or trial, if called by the state.Allegations of criminal suspicion have also dogged Joey Medaloni,although no credible evidence has been brought forward. In hisDec. 9, 2008 affidavit, Rocco Scarfone made an allegation aboutMedaloni that he might wish he could take back. Last summer, when JoeyMedaloni approached him about letting Matthew join a new ventureScarfone was working on at Childress Vineyards, Scarfone said that Joeytold him Joey’s name could not be on the project because he was underinvestigation by the IRS and the “US Attorney General’s Office,” butthat he would provide “consulting services.” Scarfone said he declinedthe overture. Scarfone declined to comment to YES! Weekly aboutthe allegation. Joey Medaloni downplayed that and other allegations,writing in an e-mail on Sunday that “alleged and fact are a bigdifference; alleged normally ends up not correct or one sided.”

Localpublic affairs officers with the IRS and US Attorney’s office saidtheir respective agencies are unable to confirm or deny any ongoinginvestigation as a matter of policy. Known for his ability tocharm civic leaders and his courteous treatment of his nightclub staff,Joey Medaloni could also demonstrate flashes of temper, according tocourt records. In 2006, he completed an anger management class todispose of two separate assault charges from the previous year after heallegedly threw a glass of wine in Caroline Hart’s face in a domesticincident and allegedly bloodied Edward Taliaferra Parks’ nose. Medaloniacknowledged that he completed the anger management class, but said thecharges were going to be dismissed anyway. A legalentanglement with a Brazilian housecleaner and sometime model whoclaimed to be Medaloni’s lover similarly reveals the onetime nightlifebusinessman as someone with little tolerance for personal affront.Medaloni sued Priscilla de Miranda Sylvaof Raleigh that year for causing him “embarrassment, distress andmental anguish” by recording a video of him at a Greensboro sushirestaurant and posting it to the social networking site MySpace underthe heading “Joey Medaloni AKA Joey Angelo Cane AKA Cheater.” In fact, the nightclub owner was originally namedJoey Cain, but a former employee says that he legally adopted his stagename to avoid bringing shame to his family. In 1998, Joey’s youngerbrother followed suit by legally changing his name from Brian MatthewCain to Matthew Angelo Cain. In her counterclaim, Sylva said she

conferred withMedaloni’s other girlfriend at the time, Lindsay Richardson, and thetwo women launched a plan to confront Medaloni. They recruited abartender from Club Rumba named Michelle to film the confrontation atSushi 101. Medaloni’s suit against Sylva also accused the woman ofslandering him by telling an unidentified person that she saw Medalonideliver a controlled substance to someone in a drug deal. Sylva deniedmaking the statement. Sylva tried to prove her relationshipwith Medaloni by seeking his confirmation of more than 50 text messagessent through April 2006. “Work like you don’t need the money and lovelike you’ve never been hurt,” read one from 5:14 a.m. on Jan. 22. “Giveme just one chance. Do we have a date Thursday?” “We are at sea.Thinking of you and do we have a date for Thursday?” read another onefrom 3:18 a.m. the following day. And on April 8 at 12:12 p.m.: “Goodmorning, rock star.” Medaloni retaliated in his own interrogatories byrequesting proof from Sylva that she held legal residency in the United States.Sylva objected to the question on relevancy ground, but responded thatshe held a 10-year visa. The lawsuit ultimately died in mediation, withMedaloni, Sylva and Richardson agreeing to bear their own legal costs. Thesquabble between Joey Medaloni and Rocco Scarfone that erupted lastfall resulted in a restructuring of the intertwined South Elm Streetentertainment concerns. In his own lawsuit, Medaloni claimedthat Scarfone had defaulted on payments for the N Club and thatScarfone, Greg Harrison and Dr. Lenin Peters had defaulted on the notefor Much. Scarfone denied falling behind on payments, but he resignedfrom running day-to-day operations at Much and Heaven. Harrisonsaid that Scarfone was replaced by Peters who, in turn, brought inpublisher Diego Gomez and former Montego Bay nightclub operator ArayaWossen to manage Much and Heaven. Carmine’s, Scarfone’s restaurant inthe Much building, was discontinued and replaced with a new eaterycalled Level 2. A week later, Scarfone opened Zen Sushi & Sake Baracross the street. In return for Scarfone’s resignation atMuch, Medaloni stated in a Dec. 19 pleading that the lawsuit againstHarrison and Peters would be dismissed, but his claim against Scarfonewould be maintained. Medaloni and Scarfone settled out ofcourt last month. Some of the terms are confidential, but Medaloni’slawyer said recently that his client intends to abide by hisnon-compete agreements, and that he had not done anything to supportthe Mixx except to “wish his brother well.” “From my talks with Joey,he is very content in the Virgin Islands running a lucrative charterboat business,” Scarfone said. “Joey has nothing he wants to dodowntown.” Attention from the legal wrangling has put Medaloniin an awkward position. “My image means a lot,” he said. “I loveGreensboro. One day I will return to Greensboro.” Despite avisible decline in club patronage on South Elm Street and at venuesacross the city, Scarfone insisted that the recession has had littleimpact on his businesses. “Our clubs are doing very well,” hesaid. “We just opened up Zen Sushi. There are two other locations thatwill be under construction soon. There’s a third one we’re negotiating.These are nightclubs and restaurants that will employ quite a fewpeople. I care about downtown. I’m on the board of Downtown GreensboroInc.” Scarfone has enjoyed the support of Keith Holliday, the formermayor and former banker who is a vocal downtown proponent. LastOctober, Scarfone announced an alliance with the Carolina Theatre,where Holliday now works as president, to bring major music acts to thehistoric venue. The prog-rock band Yes played in December, and 1980shard rock group Tesla is scheduled to play later this month. “Here’sthe beauty of Rocky and downtown is that [the nightclubs] bring peoplein from Thomasville and Kernersville, everywhere and all around,”Holliday said. “So these are kids who are discovering Much and N Cluband Inferno for the first time. There’s a pipeline of kids who arecoming to Greensboro for the first time, and that helps everybody.”

Reachedon Jan. 27, the day after Joey Medaloni left Greensboro to return tothe Virgin Islands, Rocco Scarfone insisted that all was well withinthe extended family that comprises the city’s nightlife industry. Ina pleading by Medaloni’s lawyer on Dec. 19, Medaloni and Scarfone weredescribed as “extremely adverse parties.” Now the language of legalcompromise holds that the dispute has been “amicably resolved.” “Me and Joey are friends, like before,” Scarfone said. “Me and Matthew are friends, like before.”

Joey Medaloni concurred. “Iam still friends with Rocco Scarfone,” he said. “Me and Greg are greatfriends, obviously. Matthew and Lenny are working together.” Atleast publicly, all the players are on the same team. “Greensboro’sdark shadow is over,” Medaloni said. “The sun is shining again. Everybody gets along. Sometimes people get mad and start talking to lawyers, and before you know it you’re in a lawsuit.”