How a City Closed a Nightclub and Destroyed Its Owners' Lives

At around 11PM Tom got a message through on his radio telling him a police officer had arrived at the club. He was directed to the front of the building, where he was introduced to a man in a suit who took him to one side, showed him his badge and informed him that 140 officers were about to perform a raid on the building. Tom was instructed to stop the DJ playing music – by this point, lines of officers in reflective yellow jackets were bursting through the doors – but, before he had a chance to reach the booth, an officer had already taken to the microphone and begun instructing the bewildered clubbers to stay where they were. Bins were placed around the club for guests to deposit any illegal substances, before being instructed to give their names and personal details to the police. Dealers already known to the police were apprehended and searched.

By 1AM the police had separated the clubbers (downstairs) and the staff (upstairs). Tom was asked to unlock the safe so police could seize its contents. Officers spoke to the club's owner, Manoucehr Bahmanzadeh, who was at his home in Hove, near Brighton, some 250 miles away from the club, and informed him he would need to return to Plymouth as soon as possible. Tom was then asked to put his hands out. An officer clipped a pair of handcuffs around his wrists and told him he was under arrest.

In 2006, the Dance Academy in Plymouth – then the biggest nightclub south of Bristol – closed its doors for good. Within two years, Manoucehr Bahmanzadeh and Tom Costelloe would be in prison. Despite the club's full compliance with licensing laws, and no evidence that linked either of them to the supply of drugs, the pair were sentenced to nine and five years respectively for permitting the sale of a class A substance. This is the only case in British legal history where a nightclub manager has been prosecuted for this offence – barring cases where the manager was a dealer, or rampant dealing had led to the death of a clubber.

What makes this story remarkable is the building. The Dance Academy was a nightclub opened in the hollowed auditorium of a 120-year-old theatre; a listed building and contested space that the local council had long-held designs of regenerating. The dilapidated venue remains a fierce obsession for the two men who ended up in prison and have been searching for justice ever since. Their conviction – plagued by questions and inconsistencies – marks the demise of Dance Academy out as a low watermark in relations between club culture and the British establishment.

Tom was released from prison on New Year's Eve, 2010. That night, he greeted the new year, and his freedom, by playing a DJ set at a friend's nightclub. Following his release he tried his hand at a few "normal" jobs, but was soon back to running clubs. He now lives alone, separated from his partner but still regularly seeing his daughter, who was born a couple of years before his arrest. As we cross slowing traffic and empty car-parks, he points out local landmarks – mostly other spots in Plymouth where clubs used to stand, but are now boarded up with plywood – before leading me to the towering building on the corner of Union Street.

The Dance Academy – or the Palace Theatre, depending on which chapter in its history you prefer to remember – first opened in 1898. It was forced to close after three months due to a fire, before reopening; became a bingo hall in 1961; reverted back to being a theatre in 1983; and then fell into disuse until the late-1990s. In its heyday as a theatre it played host to the likes of Frankie Howard and Laurel and Hardy. It is now considered an "at risk" listed building. Tom apologises, telling me we can't get inside today, so instead I search for a window that isn’t smashed or boarded up, and press my face against it.

It's clearly in a bad way – sun-rays enter through holes in the ceiling, filtering arms of dusty light between low hanging wires and dry beams – yet, even in its current state, it's easy to see what a singular clubbing environment it must have been. There's a gaping central staircase, the bannister of which is bordered by globular lamps. The paint peels purple into red, the walls disappearing around corners into alcoves and cubby-holes. Under strobe lights and lasers, the shape of the theatre must have been bewildering, the nights endless.

Tom suggests we make for a nearby pub. He's grateful – surprised, even – that I've come all this way, that somebody is taking an interest. The events of the past 12 years have written creases into his eyes, which rise when he smiles.

Manoucehr immediately set to work. He moved to Brighton, where he started out running the door at the legendary Zap club – a venue that was hugely influential in the acid house revolution – before eventually becoming its de-facto manager. During this time he also paid an elderly local woman £100 for her phone number – 204060 – and used it to establish a taxi service which is still the biggest operating in the area. Manoucehr was granted entry to America some nine months later, but by then it was too late: he had three businesses, and the UK was home.

Manoucehr first met Tom at the Camden Palace in 1997, and the pair took an instant liking to each other. Manoucehr liked the music Tom played, and found the Bromley-born DJ uncharacteristically trustworthy for someone who worked in nightlife. So it was no surprise when he asked him to visit Plymouth to have a look at a venue he'd just bought.

"I remember driving down," Tom tells me. "It wasn't much more than an empty shell with a roof, but still a really beautiful building." The empty shell was the Palace Theatre, an abandoned Victorian music hall that had been largely out of use for 15 years. The venue promised greatness – intricate marble facades and a colossal auditorium. Tom assured Manoucehr that whatever he wanted from him, he could have. By the end of the year, Tom had moved to Plymouth to work full time as the club's manager and booker, with Manoucehr's then-girlfriend managing the club's office. The Dance Academy opened that year.

It took about eight months to start getting people through the door. When the Dance Academy first opened, Plymouth's Union Street was a run of chart-music bars with £1 drink deals, and the occasional strip-joint. The struggle for prominence was made even more difficult by Manoucehr's initial decision to attach a £15 membership fee for entry. As he remembers it, though, quality won out: "People realised it was worth it."

Within a few fruitful years, the Dance Academy became the most important club in the Southwest. Minibuses curled up and down the coasts of England, carrying crews of club kids and rural ravers. Greg Zizique, a former regular and occasional resident DJ, explains to me over the phone how excited he was when he first started getting booked to play there. "If you wanted to make it, this far down, you had to play Dance Academy," he explains. "I remember around Christmas and Boxing Day they'd be queueing all the way down Union Street, past the takeaways, before the club had even opened."

The club experienced a significance venues rarely have since the turn of the millennium: for a short while, for those in the know, it became the centre of the universe. Protesters, campaigning against the club's closure in 2006, complained that they were losing more than a nightclub: they were losing a community. One remarked: "It's unique… it was so huge… you remember that feeling, being sat in a theatre as a kid? That's the Dance Academy.”

Manoucehr and Fred knew each other fairly well, having dealt with various license applications over the years, and Manoucehr remembers nothing different in tone about this meeting. In fact, he even alleges that Prout told him not to worry; that the extra provisions were just for "the people upstairs", while gesturing to the ceiling with his pen. Manoucehr worked with the police to agree new ratios of door-staff, and the licence was issued.

What Manoucehr didn't know at the time was that, following this meeting with Prout, an undercover police operation focused on the Dance Academy had been set in motion. Operation Jonamac – a 25 person-strong investigation – was established to investigate drug consumption in the club. Evidence that surfaced during Manoucehr’s later appeal showed that the undercover officers were specifically briefed to look for links between management and the sale of drugs.

The first phase of undercover officers began infiltrating the club and collecting observations in January of 2006. In total, 24 anonymous police officers recorded observations in the club. Tom recalls a woman, much older than the club's average clientele, repeatedly asking him if he could sort her with pills on a weekly basis. "In the end," he tells me, "I just told her to fuck off."

After six weeks, a break in the undercover observation was scheduled, at which point the licensing police sent Manoucehr another warning. The letter, dated 6th March 2006, claimed that Fred Prout had highlighted concerns around the widespread consumption of drugs and the standard of searches on entry during their earlier meeting. It demanded a review of the current door policy, more female security staff and more training to enable staff to deal with violence and narcotics. This letter was Manoucehr’s final formal chance to salvage his now rapidly worsening situation before the police raided the building.

Manoucehr sent a lengthy written reply the following day. He explained in detail that the Dance Academy was compliant with security staff ratios, and described how he had personally dealt with drug dealers and excluded them from the premises. He even offered to pay for two police officers to stand outside the club at peak times. His letter concluded by thanking the police for their cooperation, but highlighted several occasions when he'd been left without their support. He raised a variety of incidents when known criminals, who had damaged the building or endangered clubbers, had been released without being charged. He also referenced an occasion when he’d sought to meet with the police for a ten-minute conversation, and had been sent a complaint form instead. The police replied on the 3rd of April, 2006, just under a month after Manoucehr sent his letter, informing him that posting police officers outside the club wasn’t the appropriate way to tackle the present problems.

It's important to note that Plymouth police were facing a significant problem with class A drugs at this time. Throughout the 2000s, a gang from Manchester were instrumental in the supply of cocaine and ecstasy to the Southwest. The Dance Academy, as the region’s premier nightclub, was an obvious target. Manoucehr maintains that the gang was intent on infiltrating the club and dominating the supply chain, and that he was left to fight them with no practical support from the police, even enduring threats against his life. He was even praised by a licensing officer for successfully barring a known dealer called Blake Donnellan (who, in 2011, was jailed for 15 years for conspiracy to supply class A drugs, and understood by the police to be the "linchpin" of a wide-reaching network of dealers in the area).

Despite that, his letter made no difference. The second phase of undercover officers had begun visiting the club on the 25th of March, before the police had replied to Manoucehr’s letter. By the 22nd of April it was judged that no improvements had been made, and the decision was made to raid the club. Some time just past 11PM on Saturday the 6th of May, 2006, Manoucehr received a phone-call at his flat – where he'd been recovering from an operation – to tell him his club had been raided and he should return to Plymouth first thing Monday morning.

In response to VICE's requests for comment, with regards to many questions about this case, Devon and Cornwall police stated that: "In 2008 Mr Bahmanzadeh was convicted and jailed for allowing his premises to be used for the supply of class A drugs. He has served a seven-and-a-half year sentence for that offence. An appeal against that sentence was rejected by the Court of Appeal in 2012. We support the decision of the courts in this case."

Tom remembers the interview as lacking in depth, as though the officers were trying to scare him rather than question him. "They were trying to put some really weird claims on us," Tom recalls. "For example, our lost property box had passports and driving licences in it, but only because people would come back for them. They were trying to say that we had some kind of passport scam going on – it was bizarre." Tom was advised by a duty solicitor to respond no comment to every question.

Manoucehr arrived back in Plymouth on Monday the 8th of May, at which point he was arrested and held in a cell. He maintains that it was during this time that a closure order for the Dance Academy was being heard in Plymouth Crown Court. Being behind bars, there was nothing Manoucehr could do to challenge the closure, so it went ahead. He lost the nightclub he and Tom had worked so hard to create. "They cheated us," he barks at me, replaying every moment.

In response to this accusation, a representative of Plymouth Crown Court said that, "If the owner of the premises/those with an interest in it were prevented from attending the first hearing but wanted to attend, they or their legal representation could apply to the court to adjourn the hearing for one period not exceeding 14 days." They added that they could "also choose to have their legal representative attend on their behalf", or "apply to the court to cancel the closure order after it had been made by the court".

Similarly to Tom, Manoucehr remembers initially being accused of money laundering – a charge Devon and Cornwall police seemed so intent on charging him with they flew officers to Cyprus to raid his small apartment there, as well as his home in Brighton. The police even took a small box of cigars to check the duty had been paid on them. "They were trying to pin all sorts of shit on us," he recalls to me.

On the 6th of August, he and Tom were eventually charged with permitting premises to be used for the sale of a class A drug. The case went to trial on Monday the 19th of May, 2008 and lasted 12 weeks.

The bulk of the case against the pair was built on the accounts of the undercover officers – all of them shielded from Manoucehr and Tom's view during the hearing – who testified to the "rampant", "blatant" and "overt" sale and consumption of drugs within the venue (all of their observations used these exact words). The prosecution also stressed how often ambulances had been called to the club and the surrounding area, and referred to the 300 pills that were seized on the night of the raid. Other damning evidence came in the form of a bar worker who was found with pills in her pockets (Tom claims they were handed to her by a panicked friend when the lights came up).

Tom had some questions to answer himself. He had the phone number of one of the dealers saved on his mobile (he maintains he had only been buying hash from him), and it was revealed that he had, on one occasion, put the dealer on the guest list to the club. Three ecstasy tablets were also found in his home (he also maintains they were years old, as he’d been sober for some time since moving to Plymouth).

Yet, in other areas, the prosecution seemed more tenuous. The defendants were asked why there were so many bottles of water in the VIP area, the implication being that stocking water was an acknowledgement of drug taking. At one point, the judge even challenged their choice in music, suggesting something more like "Strictly Come Dancing" could have curbed the culture of drug-taking.

When Manoucehr suggested the jury should see the inside of the club, so they could fully appreciate how labyrinthine and difficult to fully monitor the space was, his request was granted, but only on the condition that he remain at least 12 yards away from them at all times. The tour of the space was instead conducted by one of the prosecuting police officers, something Manoucehr protested at the time as completely unfair.

Importantly, almost everybody, from Manoucehr's nephew – who was working part-time in the club – to the bar-staff and bouncers, agreed that the club had a clear no tolerance policy to drugs. There was no suggestion from any member of staff that Manoucehr or Tom engaged with or wilfully encouraged the sale of drugs. That is, except for Gareth Grimes.

Some years previously, Gareth Grimes had moved to Plymouth from Liverpool, where he started working as a doorman in some of the local clubs. When Manoucehr fired a group of door-staff for colluding with drug dealers, Grimes expressed an interest in working for the Dance Academy. He was hired in late 2004 and was made head doorman. He had over a year’s worth of experience in the club, and had also served as a Royal Marine.

During the trial he was the only member of staff who referred to occasions when Manoucehr and Tom had explicitly turned a blind eye to the sale of drugs – claiming both of them had asked him to allow known-dealers into the club multiple times. In effect, Grimes was the prosecution: the only person on the ground who backed up the claim that Manoucehr and Tom were enabling the sale of class A substances. His statements were referenced specifically in the judge’s closing comments.

Only while building the case for Manoucehr’s appeal did allegations surface regarding Gareth Grimes that had not featured during the trial. It was suggested by the defence that, prior to the trial, while working at another Plymouth club, he had tried to sell drugs to some off-duty police officers, as well as boasting that he made as much as £5,000 from selling drugs a night (although he was never investigated or prosecuted, and the Supreme Court would later dismiss this evidence). When reviewing these claims ahead of Manoucehr's first appeal, the Criminal Cases Review Commission described them as severely damaging to Grimes' credibility as a witness.

It was also understood, and referenced during the trial, that he had been present for the murder of Fernando Lopez – a Plymouth drug dealer – at the hands of another dealer in September of 2004. He had been briefly brought into police custody following this, but was released without charge. Grimes defended this during the trial, pointing out that he only witnessed the murder and that he had been "assisting police".

On top of that, according to the defence lawyers, Grimes had never been a Royal Marine. It was a complete fabrication, they said, but just the sort to impress a Plymouth jury where the marines have a national base.

There were other questionable elements of the prosecution's case. The police relied on Manoucehr's statements, made during his lengthy interview, specifically regarding how much money the club made. He had answered that, on a good weekend, he sometimes made as much as £30,000 to £40,000 a week, turnover. Not only did the prosecution tell the jury this was profit – an amount it would be hard to achieve running a nightclub legitimately – it has since been revealed that the police missed the word "sometimes" out of his statement when providing an abbreviated version, despite recording it during Manoucehr's original interview, thus exaggerating the club's takings. This proved to be influential when these unrepresentative takings were used against Manoucehr as a motivation to commit crime.

As for the minutes from Manoucehr's first meeting with Fred Prout – the meeting at which Manoucehr alleges he was told the Dance Academy had nothing to worry about, and that the extra provisions were for the people upstairs – Prout was unable to refer to his notes when he came to give evidence in court. They had disappeared entirely. Neither Fred Prout nor the Plymouth Licensing Office responded to VICE's repeated emailed requests for comment.

Reading about the Dance Academy trial and speaking to the people involved is alarming. In a moment when police and prosecutors are having cases thrown out and challenged for failing to share evidence with defence lawyers ahead of trial, it is staggering how many lines of investigation were simply not pursued. At no point during the trial was the Home Office's own guide to "safer clubbing" ever referenced. If it had been, the jury would have heard that the UK government at the time recommended club owners have a supply of drinking water and a chill-out room, as well as warning against keeping clubbers standing outside by searching every single one of them. The guide also openly acknowledged: "There is no guaranteed, comprehensive approach to ensuring the end of drug-related casualties at dance events."

The evidence in Dance Academy’s favour has always been strong. The Harbour, a drugs rehab centre based in the Southwest, described drug-taking at Dance Academy as no worse than in other clubs. Police reports at the time indicated that the Dance Academy apprehended and turned 53 drug dealers and users over to the police in 15 months, compared with other Plymouth clubs who managed none.

Despite this – and disregarding the questions raised about witnesses, the submissions regarding the club's profits and the lost notes – there was also no evidence that linked either Manoucehr or Tom to the sale of drugs. They had complied with the police and the licensing board at every turn. At one point during the trial, Tom turned to the Crown Prosecutor in frustration and asked, "What were we expected to do? Get everyone to strip naked at the front door? I'm just being honest with you – you can't stop people taking drugs." The prosecutor, Geoffrey Mercer QC, responded: "No one is saying you can."

Judge Francis Gilbert advised the jury at the time that "a person permits or suffers something to happen if he, at one end of the spectrum, encourages it to happen, if he allows it to happen, or if he is unwilling to prevent it". The case against Tom and Manoucehr argued that in knowing ecstasy consumption was taking place in the club, but not eliminating it entirely, they were in effect encouraging it.

The pair were found guilty of permitting the sale of a class A drug. Manoucehr received nine years on the grounds he knowingly allowed the selling of drugs to make profit, and Tom five, for the "prestige" he enjoyed as the resident DJ. The judge concluded "…there was large scale, blatant supply of and use of ecstasy in the Dance Academy, of which you were both well aware and to which, at the very least, both of you turned a blind eye in order to maximise the profits and reputation of the premises and the business". The pair both received longer sentences than any of the dealers apprehended in the club the night of the raid.

Since his initial sentencing in 2008, Manoucehr has endured two failed appeals. The first, in 2010, shortened his sentence but didn’t overturn the conviction, based on the evidence of Gareth Grimes. The second – emboldened by new evidence about Gareth Grimes' true identity – was thrown out on account of Grimes not constituting a deciding factor in the case, completely contradicting the ruling of the first. This was followed by an attempt to have the case read by the European Court of Human Rights in 2012, which eventually fell through when the prosecution were able to refer the proceedings back to the UK Supreme Court, during which time the case’s window with ECHR had expired.

When I talk to Manoucehr it's a struggle to keep his focus – unanswered questions about ineffectual lawyers or evidence barge into his head, derailing his train of thought. "Motherfuckers," he seethes, both at volume and to himself. The word dips and curls around his still-strong Iranian accent. Throughout the trials of the past decade he has managed to hold onto the Palace Theatre, but is now embroiled in an endless back and forth with a special interest group who are rallying to save the building from decay. He's angry, just like the court transcripts indicate, yet he doesn’t seem tough anymore. His eyes blaze when he talks, the end of a rollie balanced on his lips.

Jane Hickman, the criminal lawyer who took on Manoucehr’s case after the failure of his first appeal, considers his case one of the most extreme miscarriages of justice she's come across in her career. She was introduced to the case by a journalist in early 2009, at which point she visited Manoucehr in prison. She describes being taken aback by his rage. "I've seen people who've suffered these miscarriages of justice; he had all the symptoms of it," she tells me, over the phone. "It's recognisable. It's a special kind of distress. You can't fabricate it."

Hickman has always believed that Devon and Cornwall Police understood Manoucehr to be a far wealthier man than he actually was; that they had a misguided financial motive to prosecute him. Beyond their initial attempts to charge him for money laundering, they also sought a huge amount of money when it came to confiscation proceedings after the trial. (Ironically, after a battle to procure the money from the State of Jersey, where it was being held, the Home Office barely received 5 percent of his £1 million proceeds of crime payment. If anyone in Plymouth was hoping to profit from his prosecution, they failed. "I was dancing in the prison when I read that in the papers," Manoucehr remembers.)

Manoucehr is also convinced the council targeted him – in part, perhaps, motivated by a desire for his building. Plymouth City Council's designs on the Palace Theatre are historic. Just shy of two years before the undercover investigation into the Dance Academy began, King Sturge – a property consultancy firm – was employed by the now-defunct South West Regional Development Agency to carry out a valuation of the building and the Dance Academy's business. At the time, Manoucehr told the Plymouth Herald, the local paper, that he would consider selling the building, but only if the price was right, insisting that the sale of the building must not be built on destroying his business.

Plymouth Council also told the paper there were "lots of exciting ideas for the building". The report valued the Dance Academy at £1 million – the exact amount the court would fine Manoucehr for, following his conviction four years later.

Since the closure of the Dance Academy, the council have kept their interest in the building relatively vague, going as far as to tell the Plymouth Herald they had "no plans" to buy the building if it was for sale, in 2008. Yet a PDF unearthed by VICE, which is still online, suggests that the council had aspirations to regenerate the Palace Theatre as late as 2007 – a year after the raid on the club. The "Millbay and Stonehouse Area Action Plan, 2006 – 2021", authored by Plymouth City Council Department of Development, states under its visions and objectives: "The Palace Theatre will be regenerated and be a key landmark on Union Street, which will have regained its prominent position as one of the most vibrant arteries in the City."

It goes on to list: "Seek to contain the nightclub uses in the area between the Palace Theatre and the Western Approach junction" as another aim. Plymouth City Council didn't respond to any of VICE's emails requesting a comment. In a recent interview with the Plymouth Herald, the leader of the council said their position on the Palace Theatre hadn't changed since 2008.

As Jane Hickman sees it, the relationship is clear. "It's a matter of record that during this period the Plymouth City Council was coordinating closely with the police and other public bodies on the future of Union Street, the nighttime economy and the harbour development, and that it was the council’s wish to obtain the freehold of the Palace Theatre as part of their plan."

VICE has also learnt that Judge Francis Gilbert, who presided over the case and handed out the verdicts, worked as a Devon County Councillor between 1977 and 1985. There is no suggestion that this prior affiliation impacted his decision or judicial integrity, but it points to how close the networks between Plymouth's establishments were, and are.

He remains utterly convinced that the city of Plymouth – the council, the police, the licensing officers – conspired against him. In the space of a few short years he went from being a celebrated new businessman, bringing prosperity into the city and running a nightclub that was a model of safety, to a convicted criminal. As it currently stands, Manoucehr says he is open to renovating the building in the right way, but not if it ruins him. This Christmas he opened its doors to the city's homeless, in order to give them a roof over their heads. Yet, beyond that, its future is unclear. "These people talk about their heritage," he tells me. "What about my life?"

As I'm packing my rucksack after our second afternoon of interviews, Manoucehr tells me he’d been back to Plymouth earlier that week for a court hearing, to settle the £60,000 he still owes the courts; the Crown Prosecution Service wanted to increase the amount he was paying back each month. "I cried that day, when I came out of court," he tells me, quiet and distant. "Why should I be humiliated like this? I’ve already paid you £1.3 million and done four-and-a-half years in prison. If I actually did it, then that's something, but this… it hurts."

Tom is broadly philosophical about his time away, describing it as "productive". He drove for the prison, learnt to sew, worked his way up to grade six on piano. He still sees his daughter, and is enjoying modest successes with his new nightclub. Yet the Dance Academy follows him wherever he goes. As I'm finishing work on this piece, he calls to bring my attention to a recent incident at another nightclub in Plymouth. Two 19-year-olds had died after being found unconscious in Pryzm – the Plymouth branch of a UK-wide nightclub chain. He expresses his sympathies, but also his frustrations that the club was reopened the next evening with the approval of Plymouth police. The same police who closed the Dance Academy over issues far less serious.

Manoucehr Bahmanzadeh had complied with his license terms. He had a zero-tolerance drugs policy. His club was praised as being the safest and most effective in the area. He dealt with additional requests like CCTV. He offered to pay for additional police. As for Tom, it’s hard to see what he was punished for beyond a few decade-old pills in his bathroom cupboard.

Nightlife on the coastal stretches of Southwest England has never really recovered since the Dance Academy's closure. "When it went, a lot of people overnight decided they weren’t going out anymore," former resident Greg Zizque tells me. "It killed the scene. It's like a whole generation of people stopped clubbing."

After 120 years, the Palace Theatre is now still. The doorways barricaded, chunks of ceiling cluttering the floor and weeds gently forcing their way through the window frames. It remains on a sorely neglected high street, an abandoned final testament to the British establishment’s destructive relationship with nightlife. As grey light falls on so much damage, it’s hard to see how some things will ever be rebuilt.

@a_n_g_u_s / @CBethell_photo