Ce­cil stores part of huge booze-smug­gling in­dict­ment

Cecil Whig - - FRONT PAGE - By CARL HAMIL­TON

ca­hamil­ton@ce­cil­whig.com

— A fed­eral grand jury has in­dicted three em­ploy­ees of a Mary­land­based liquor dis­trib­u­tor that al­legedly used Ce­cil County liquor stores as go-be­tweens to sell huge or­ders of booze to New York whole­salers — de­fraud­ing the state and city of New York out of ap­prox­i­mately $9 mil­lion in ex­cise taxes, ac­cord­ing to the U.S. At­tor­ney’s Of­fice.

The 23-count in­dict­ment iden­ti­fies Repub­lic Na­tional Dis­tri­bu­tion Com­pany, LLC, of Jes­sup, and its em­ploy­ees

BAL­TI­MORE

Eu­gene Gerzsenyi, 52, of Glen Burnie; Ja­son Lock­er­man, 38, of Bel Air; and Lisa Rob­bins, 55, of Wood­bine, as the de­fen­dants.

It fur­ther iden­ti­fies Gerzsenyi as RNDC’s as­sis­tant di­rec­tor of op­er­a­tions, Lock­er­man as a RNDC sales­man and Rob­bins as an ac­count­ing man­ager at the time that they al­legedly com­mit­ted the of­fenses, ap­prox­i­mately from June 2009 through June 2012.

In the wake of the in­dict­ment, which USAO of­fi­cials an­nounced ear­lier this week, RNDC com­pany of­fi­cials de­nounced fed­eral pros­e­cu­tors for seek­ing the in­dict­ment and main­tained the in­no­cence of the three em­ploy­ees and the busi­ness it­self.

Not­ing that RNDC has a more than 100-year his­tory dat­ing back to 1898 and that it is the na­tion’s sec­ond largest “premium wine and spir­its” dis­trib­u­tor, Tom Cole, the com­pany’s pres­i­dent and CEO, wrote, “RNDC is ex­tremely dis­ap­pointed to learn that the U.S. At­tor­ney for the District of Mary­land has cho­sen to take this

action,” in state­ment leased Tues­day.

Cole also con­tended, “We have worked dili­gently with the U.S. At­tor­ney’s Of­fice since first learn­ing about the in­ves­ti­ga­tion in 2012, and have seen no ev­i­dence to sup­port their ver­sion of the facts. RNDC em­phat­i­cally de­nies th­ese al­le­ga­tions and looks for­ward to our day in court where we will demon­strate that the pros­e­cu­tors’ ac­cu­sa­tions are based on er­ro­neous as­sump­tions, un­sub­stan­ti­ated the­o­ries, and rep­re­sent an un­prece­dented at­tempt at fed­eral gov­ern­ment over­reach.”

In his con­clu­sion, Cole wrote, “In ad­di­tion to not be­ing sup­ported by facts, to­day’s (Tues­day’s) action is a rogue ef­fort by a fed­eral agency to seize con­trol of the state reg­u­la­tion of liquor sales in vi­o­la­tion of long­stand­ing law.”

The in­dict­ment con­tains the names of sev­eral Ce­cil County liquor re­tail­ers that were al­legedly in­volved,

re-

list­ing them as North­side Liquors in Elkton, Happy 40 Liquors in Elkton, North East Liquors in North East and the now-de­funct Ch­e­sa­peake Wine and Spir­its near Ch­e­sa­peake City.

Names in­clude Nilesh Pa­tel and Tushar Pa­tel, who owned North­side Liquors at the time of the pro­tracted liquor smug­gling scheme, which ran from June 2009 through June 2012. The in­dict­ment also names Anil Pa­tel, who, at the time, owned Happy 40 Liquors, and Jatin Pa­tel, who, at the time, owned North East Liquors. In ad­di­tion, the charg­ing doc­u­ment names Dilip Pa­tel, for­mer owner of the closed Ch­e­sa­peake Wine and Spir­its.

Earl Brad­ford, who is Ce­cil County’s chief al­co­hol bev­er­age in­spec­tor, re­ported Thurs­day that those named own­ers are “no longer the li­censees” of those named stores.

More­over, in the case of Nilesh and Tushar Pa­tel, their liquor li­cense for North­side Liquors ex­pired and then it came un­der dif­fer­ent own­er­ship, which now trades un­der Bridge

Street Liquors.

“It has new own­ers and new peo­ple,” Brad­ford noted.

All of those for­mer liquor store own­ers named in the in­dict­ment had been charged for their roles and all had been con­victed, said Mar­cia Murphy, a USAO spokes­woman, adding that she be­lieved some are still await­ing sen­tenc­ing. In­for­ma­tion on their case dis­po­si­tions was un­avail­able, as of Thurs­day af­ter­noon.

In Septem­ber, ac­cord­ing to the most re­cent USAO press re­lease on the mul­ti­de­fen­dant, liquor smug­gling case, Dilip Pa­tel — a 49-year-old Wilm­ing­ton, Del., res­i­dent who owned Ch­e­sa­peake Wine and Spir­its in the 2700 block of Au­gus­tine Her­man High­way at the time of his crime — was fac­ing up to 20 years in prison af­ter plead­ing guilty to wire fraud for his role.

Pa­tel also owed New York City $673,992 in resti­tu­tion to cover the city’s lost ex­cise tax rev­enue, ac­cord­ing to fed­eral pros­e­cu­tors, who also re­ported that the fed­eral gov­ern­ment seized $11,000 from the liquor store’s op­er­at­ing ac­count.

Pros­e­cu­tors said sev­eral smug­glers from New York City or­dered bulk liquor from Pa­tel’s store by phone from Jan­uary 2011 through June 2012. Then the smug­glers drove to the store, paid cash for the bulk liquor, loaded the liquor into their ve­hi­cles and drove back to New York City, where it was sold, pros­e­cu­tors added.

In do­ing so, ac­cord­ing to pros­e­cu­tors, the smug­glers evaded the pay­ment of ex­cise taxes by fail­ing to file re­ports with the state of New York de­scrib­ing the trans­porta­tion of the liquor into the state. The ex­cise tax on dis­tilled spir­its is a $1.50 per gal­lon in Mary­land, while it is $7.44 per gal­lon of liquor in New York City. So, pur­chas­ing liquor in Mary­land for sale in New York City de­frauds the city of the tax due on that booze.

RNDC and its three em­ploy­ees are ac­cused of al­low­ing New York whole­salers to cir­cum­vent that New York ex­cise tax by al­low­ing them to buy tens of thou­sands of dol­lars worth of booze per or­der “out the back door” of the Ce­cil County liquor re­tail­ers, be­fore smug­gling the booze up to New York — sav­ing al­most $6 in ex­cise tax per gal­lon.

The in­dict­ment, which in­cludes charges of wire fraud, money laun­der­ing, wire fraud con­spir­acy and aid­ing and abet­ting, al­leges that Gerzsenyi, Lock­er­man and Rob­bins “fa­cil­i­tated the pay­ment to RNDC for liquor that was moved from RNDC, through the Ce­cil County re­tail­ers to the New York re­tail­ers and their agents.”

Specif­i­cally, ac­cord­ing to the fed­eral court doc­u­ment, RNDC sub­mit­ted in­voices to the Ce­cil County re­tail­ers that in­cluded the amounts owed to RNDC for the liquor that had been de­liv­ered to the New York re­tail­ers and their agents.

The New York re­tail­ers paid the Ce­cil County re­tail­ers in cash, which the Ce­cil County re­tail­ers de­posited into their busi­ness ac­counts, pros­e­cu­tors said. The Ce­cil County re­tail­ers then paid RNDC by check, pros­e­cu­tors added.

The in­dict­ment

al­leges that “Lock­er­man and the other RNDC sales­men knew that the liquor was in­tended for re­tail sale in New York, and they trans­mit­ted those or­ders to RNDC to be filled.”

It also al­leges that RNDC, the New York re­tail­ers and the Mary­land re­tail­ers did not reg­is­ter as liquor whole­salers or dis­trib­u­tors in New York; did not pro­vide monthly re­ports of the quan­ti­ties of liquor shipped into New York for re­tail sale; and did not pay New York ex­cise taxes.

In ad­di­tion, RNDC al­legedly filed false re­ports to the Mary­land State Comptroller’s Of­fice, in­di­cat­ing that all liquor sold to the Ce­cil County re­tail­ers was in­tended for re­sale in Mary­land.

The in­dict­ment seeks for­fei­ture of all pro­ceeds trace­able to the scheme, in­clud­ing a money judg­ment of at least $9 mil­lion.

If con­victed, the com­pany and the in­di­vid­ual de­fen­dants face a $250,000 fine, and the in­di­vid­ual de­fen­dants also face a max­i­mum sen­tence of 20 years in prison.

CE­CIL WHIG PHOTO BY JA­COB OWENS

The for­mer owner of Ch­e­sa­peake Wine and Spir­its re­cently pleaded guilty to wire fraud in fed­eral court, ad­mit­ting to de­fraud­ing New York City of more than $670,000 in taxes.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.