By Syma Chowdhry and Tony Hanson

PHILADELPHIA (CBS) — Former Philadelphia Licenses and Inspections Deputy Commissioner Dominic Verdi has made his initial appearance in federal court a day after a federal grand jury charged he used his office to steer beer sales his way (See Previous Story).

KYW’s Tony Hanson reports Verdi allegedly provided favorable treatment to bar and club owners who bought beer from a beer distributor business he owned.

(Hanson:) “Mr. Verdi, you answered the charges in court.”

“Not guilty,” Verdi said.

Verdi pleaded not guilty to conspiracy, extortion, and fraud charges.

Dominic Verdi declined further comment on the advice of counsel, Frank DeSimone.

“We just had a chance to look at the indictment, Mr. Verdi and I. He totally denies the allegations in the indictment. And we are going to go to trial and Mr. Verdi will tell you when the trial comes up his position here. But he totally, totally denies the allegations in the indictment,” Desimone said.

Verdi is accused of using his position at the city’s Licenses and Inspection department to funnel money to a South Philadelphia beer distributor he owns called Chappy’s Beer.

“Many of the places they sold beer to were places overseen by Dominic Verdi in his employment as Deputy Commissioner of L&I,” federal prosecutor David Axelrod said.

The indictment also alleges that Verdi lied to officials about owning the company.

Prosecutors say he gave bars and restaurants special treatment, as long as they purchased beer from Chappy’s.

The grand jury alleges bars and clubs assisted by Verdi bought over a million dollars in beer from Chappy’s Beer Butts and Bets.

“Chappy’s sold over a million dollars of beer in between 2006 and 2010,” Axelrod said.

Verdi held his position as deputy commissioner until 2011.

These charges come as L&I officials have been scrutinized for the building collapse last summer on Market and 22nd Street.