Lord of the Fly

Investors in the Dragonfly Bar & Restaurant say they were fleeced by partner Steve Kahn, but he claims his accusers had him framed

Steve Kahn thought the raid was routine. After all, agents from the Texas Alcoholic Beverage Commission had paid him a fistful of visits at the Dragonfly over the past few months, checking out the kinds of problems every nightclub encounters--liquor-law violations, intoxicated customers. He suspected he had raised the ire of the Lower Greenville Neighborhood Association or someone else complaining that things had gotten too rowdy. But it was New Year's Eve. Kahn had just reopened the Arcadia on Greenville, converting it from a Tejano bar to a concert venue and dance club. Next door was his Dragonfly Bar & Restaurant, and both were packed with partiers and poseurs reveling in the scene. His scene.

Yet this would be no ordinary raid. Five agents descended on the Dragonfly, but their search turned up nothing. Then two agents escorted Kahn to the Arcadia and muscled their way through the crowd. Kahn played it cool, stopping to chat with a cashier before the trio approached the Arcadia's office. Kahn unlocked the office door and an adjacent liquor storage area. The agents moved in, and again found nothing.

But they weren't through. Agents searched his black 1998 Explorer valet-parked in the driveway in front of the Arcadia's entrance. Only this time they found what they were looking for. In a nylon organizer attached to the driver's-side visor was a Ziplock baggy containing cocaine--1.6 grams of it.

"No, no, no!" Kahn yelled repeatedly after the discovery. But his protests weren't enough to dissuade TABC Sgt. Brent Roberts from hauling him off to Lew Sterrett Justice Center for felony possession of a controlled substance. Roberts' arrest warrant not only recounted Kahn's reaction, but also detailed how the raid on the Dragonfly followed two anonymous calls to the Dallas TABC office, how the callers said cocaine was being used at the Dragonfly and stored by Kahn in his Explorer. The informants were all the fodder Kahn needed to claim that the drugs were somehow planted on him--by the valet attendant, by the Dragonfly's manager, by an ousted partner. The blame would shift over time.

Kahn finally decided that Charlott Norman, one of his Dragonfly investors, and Santiago Pena, a disgruntled construction contractor, were the real culprits who had framed him. He claims the move was the decisive strike in a vicious, months-long legal struggle to gain control of the lucrative nightspot, named for a flying predator with an insatiable appetite for mosquitoes and sex. Within a week of Kahn's arrest, the Dragonfly had lost its liquor license; once deprived of its lifeblood, it immediately closed. No more libidinous singles waiting to see and be seen; no more dancing into the night with lovers and strangers; no more drinking on a rooftop patio with a commanding view of Lower Greenville nightlife.

The shuttering spurred a torrent of court accusations fired from both sides: Kahn was accused of fraud, greed, graft, and being utterly reprehensible. Not to be outdone, Kahn countered with allegations of a grand conspiracy to deprive him of what was rightly his; he also claimed he'd been slandered and threatened with violence. The Dragonfly seemed to elicit in everyone brushed by its wingspan a lust to possess it. And why not? It appeared predestined for raging success. The concept, a hybrid upscale restaurant-bar-dance club, was unlike anything along Greenville Avenue, unlike anything in Dallas.

"We knew it was going to be a moneymaker," says Norman. "We were all going to be a bunch of rich little shits."

When Charlott Norman got her first peek at the Dragonfly's books shortly after the club opened last August, she discovered a discrepancy: Only $9,500 had been deposited the same day that the business generated close to $24,000 in sales. Nearly $15,000 was missing. "Where did all the money go?" asks the attractive 35-year-old widow.

It's a question that has haunted Norman since she invested in the Dragonfly dream more than a year ago. The venture, she says, has drained more than $155,000, not including legal fees, from her personal finances. When the restaurant's capital seemed to appear and vanish with vexing regularity, it prompted her fierce fight to gain control of the Dragonfly before it ruined her.

And she had plenty to ruin. An accountant by training, Norman kept the books for her husband's business, Designer Gutter Co., a successful Dallas home-improvement venture that he launched in the early 1980s. In 1984, after selling the business, they moved to Florida to be near his family. There, they began a similar business dubbed Florida Aluminum that achieved comparable success. But in the early 1990s, their string of good fortune came abruptly to a halt after her husband succumbed to cancer. He died in 1994, leaving her with two young daughters and a considerable chunk of cash.

She returned to the Dallas area and settled in Arlington, where she began a series of dubious investments with her husband's legacy. In January 1997, she founded Evitts-Norman Entertainment, a concert-promotion company that would quickly fail. But while operating it, she hooked up with Brad Priebe, the onetime manager of the successful Deep Ellum club The Bomb Factory. And it was Priebe who came to Norman in November 1997 with a project he had devised with local entrepreneur Steve Kahn and a plea for cash to see it come true. Priebe had once worked with Kahn running The Bomb Factory, and each claimed exclusive credit for the conceptual development of the Dragonfly.

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