4 vendors to Pennsylvania Liquor Control Board agree to pay $9 million in penalties for gifts to agency officials
Four alcohol vendors reached a deal to pay stiff fines instead of facing prosecution for plying Pennsylvania Liquor Control Board officials with cash, trips and other kickbacks, the U.S. Attorney’s Office in Harrisburg announced Thursday.
The companies will pay more than $9 million in penalties as part of non-prosecution agreements reached with the government.
According to U.S. Attorney Bruce D. Brandler of Pennsylvania’s Middle District, the four companies are:
• Southern Glazer’s Wine and Spirits of Pennsylvania, LLC, which is successor company to Southern Wine and Spirits of Pennsylvania, LLC, and wholly owned by Southern Glazer’s Wine and Spirits of Miami, Fla.
• Breakthru Beverage Pennsylvania, LLC, the successor company to Capital Wine and Spirits, LLC, and wholly owned by Breakthru Beverage Group, Inc. of New York, N.Y.
• White Rock Distilleries, Inc., which formerly was headquartered in Lewiston, Maine
• Pio Imports, LLC, headquartered in North Wales, Pa.
Brandler said each company agreed to pay substantial penalties, implement compliance measures and refrain from engaging in similar activities in the future. In return, the government agreed not to prosecute the companies or any of their employees who gave things of value to LCB officials.
Brandler said in a news release several factors that resulted in the settlements included the cooperation of the businesses in the government’s investigation, the merits of the individual cases, as well as the historic nature of the conduct, which stopped in 2012 when the state Ethics Commission initiated an investigation.
A federal grand jury had begun an investigation by 2014.
“Although the history between these organizations and the Pennsylvania Liquor Control Board is clearly disturbing, it is in the interests of justice to expose this history and hold the organizations responsible,” Brandler said. “The monetary penalties imposed on these successor organizations more than disgorges the financial benefits received and discourages future misconduct by those in the industry.”
In September 2015, James H. Short , 52, the LCB’s former marketing director, pleaded guilty to honest services fraud for receiving numerous benefits from White Rock and Capital Wine and Spirits over a 10-year period.
For example, he was flown by private jet to Bonita Springs, Fla., for a golf vacation with representatives for Pinnacle Vodka, which received approval to be sold in state stores six weeks after the trip, documents show.
The investigation also snared five former LCB officials for taking lavish dinners, golf outings, trips and other gifts from alcohol vendors seeking favorable treatment for their products.
According to the agreement:
• Southern Glazer’s Wine and Spirits will pay $5 million for their employees’ role in providing cash, all-expenses-paid trips, tickets to shows and sporting events, entertainment and other things of value to LCB officials from 2000-2012.
• White Rock Distilleries will pay $2 million for their employees’ role in providing cash, all-expenses-paid trips, and other things of value to LCB officials 2000-2011.
• Breakthru Beverage Pennsylvania, which until recently operated as Capital Wine & Spirits, will pay $2 million for their employees’ role in providing gift cards, tickets, meals, and entertainment to LCB officials from 2007-2012.
• Pio Imports will pay $200,000 for their employee’s role in providing gift cards to LCB officials from 2007-2012.
Alan N. Greenspan, executive vice president and general counsel of Southern Glazer’s Wine & Spirits, maintained the company cooperated with the investigation and ceased the activity in 2012. The Dallas attorney said the activities of the largest wholesale distributor of wine, spirits and beer in North America were “isolated to Pennsylvania.”
“We take very seriously our responsibility to operate our business in compliance with the law; and, accordingly, we require all employees to complete ongoing trade practice compliance training,” Greenspan said. “ We are continually evaluating and strengthening our compliance programs and policies. Our expectation is that every employee will adhere to the highest ethical standards.”
Paul Peirce is a Tribune-Review staff writer. Reach him at [email protected]