Exclusive: Empire Merchants, New York’s biggest spirits and wine distributor, has fired CEO Lloyd Sobel and filed suit against co-owner Charlie Merinoff, claiming in federal court that the two men -- and others, including Breakthru Beverage CEO Greg Baird -- defrauded the company through their involvement in an interstate smuggling scheme.
The Brooklyn-based Empire is co-owned by the Merinoff/Drucker family and the Magliocco family. According to the complaint Empire filed in U.S. District Court in New York earlier today, Charlie Merinoff took part in an illegal scheme to smuggle spirits products from Maryland to New York, where they were sold by local retailers.
With excise taxes on liquor nearly five times higher in New York than Maryland, the complaint contends that Reliable Churchill, the Maryland division of the Charmer-Sunbelt Group that the Merinoff family controlled, and retailers in both New York and Maryland deprived New York of millions of dollars of tax revenue through this illicit activity, which supposedly started in 2008 and continued until recently.
Earlier this year, Republic National Distributing Co. (RNDC), the country’s second-largest spirits and wine distributor, was indicted in federal court in Maryland for what the U.S. attorney there alleges were similar activities. RNDC is frequently mentioned in Empire’s complaint, but not named as a defendant.