NYS Officials Fine Southern Glazer’s $3.5 Million for Pay-for-Play Scam

Giant wholesaler only has to pay $2.5 million as remainder is suspended.

The New York State Liquor Authority (SLA) accepted Southern Glazer’s Wine and Spirits no contest plea to settle charges that the wholesaler engaged in “pay-for-play” by providing illegal gifts and services to businesses to influence their purchasing decisions.

Southern also faced charges of discriminatory sales–charging some retailers more and others less, or denying them wines all together and saving those bottles for favored clients.

Restaurateurs also complained they had been placed on the SLA’s list of licensees who failed to pay the bills promptly, even though they were certain that all accounts were up to date. A review of Southern’s invoices and books found “incomplete, inaccurate, and inadequate invoicing practices” the SLA said.

The agency suspended $1 million of the fine in exchange for Southern’s consent to participate in a Corporate Compliance Agreement. If Southern upholds its end of the bargain, in which it agrees to report suspicious activity directly to the SLA for investigation and possible prosecution, the $1 million will be forgiven.

“Southern Glazer’s has provided substantial cooperation with the Authority during the investigation and upon learning about the allegations, took swift and immediate action to address any compliance issues,” Alison Herman, one of the company’s lawyers.

She added, “Southern Glazer’s has zero tolerance for any activity that violates trade practice rules and expects every employee to adhere to the highest ethical standard.”

In many cases the pay-for-play deals involved salespeople running up their corporate credit cards at favored retailer establishments, the SLA said. In September, SLA investigators confronted a district manager, who after seeing the evidence against him confessed. The SLA then questioned his supervisor, the director of sales, who admitted to approving the fraudulent transactions as a matter of standard business procedure.

“The multitude of violations found during the course of these investigations is truly staggering,” said State Liquor Authority Chairman Vincent G. Bradley. “The SLA remains committed to rooting out abuse and corruption in the alcoholic beverage control industry to ensure a level playing field for all businesses.

Published on December 27, 2017
Topics: Latest News



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