The Justice Department has convened a federal grand jury as part of a criminal investigation into Sherry-Lehman Wines & Spirits, the venerable New York City liquor merchant, according to former employees contacted by authorities.
Sherry-Lehman, founded in 1934 in Manhattan, has long been one of the elite sellers of fine wines in the United States. Last month, however, The New York Times reported that the store did not dispense large amounts of pricey wine to customers who paid in advance. The Times also cited former employees who believed Sherry-Lehman was improperly selling customers’ rare bottles from the storage facility to other customers.
The criminal investigation is being conducted by agencies including the US Attorney’s Office in Manhattan, the Postal Service and the New York Police Department. It focuses at least partially on Sherry-Lehman owners Sheyda Gilmour and Chris Green, according to former employees who said they were questioned about their dealings with the bosses.
The witnesses have been asked to appear before a federal grand jury in Manhattan later this month, the former employees said.
A spokeswoman for the US attorney’s office declined to comment. representatives of the FBI, who are involved in the investigation; Postal Service; And the New York Police Department did not immediately respond to requests for comment.
Eric Andrus, a spokesman for Sherry-Lehman, did not respond to requests for comment about the investigation. Mr. Gilmour and Mr. Green also did not respond to requests for comment.
Mr. Gilmour and Mr. Andrus previously said that deliveries of some wines had been delayed by COVID-19 and tariffs on French wines, and that the store would deliver any missing wines by the end of the year. He denied that Sherry-Lehmann misrepresented bottles from Wine Caves, a storage facility that Mr. Gilmour and Mr. Green owned.
The New York State Liquor Authority suspended Sherry-Lehman’s liquor license this year because the store failed to pay renewal fees. Before the license was reinstated weeks later, Sherry-Lehman sold $358,000 of wine to a real estate investor, according to invoices and other records reviewed by The Times.
Mr. Gilmour previously denied that Sherry-Lehman sold wine while its license was suspended, saying that real estate investors simply wanted to move their wine from Wine Caves to another storage facility. Mr. Gilmour did not explain why the Sherry-Lehman invoice listed the transaction as a sale.
Three Sherry-Lehman customers have filed a lawsuit against the store, claiming they never received more than $1 million worth of wine they paid for. Sherry-Lehman has denied wrongdoing and has sought to have the lawsuits dismissed. (The Times revealed in its May 25 article that this reporter paid nearly $6,300 for wine she never received from Sherry-Lehman.)
After The Times published the article, the state liquor authority launched an investigation, according to William Crowley, a spokesman for the authority. The authority is cooperating with the criminal investigation.
Mr. Gilmour started at Sherry-Lehman as a temporary employee before becoming a full-time salesman and eventually a co-owner. Mr. Green is a former hedge fund executive and Sherry-Lehman client who became co-owner in 2013.
The Times reported last month that a wine owned by Mercedes Bass, the ex-wife of oil billionaire Sid Bass, had been removed from wine caves without her permission and given to another customer. Mr. Gilmour said at the time that the transfer was a mistake and would be returned to the Bass family within a few days, along with all the other wine that Bass was storing in the wine caves.
Mr Andrus said the Bass family picked up their liquor on June 1. A spokeswoman for the family responded that this was not true.
Sherry-Lehman’s Park Avenue store has been closed since March. Mr Andrus said it would be reopening soon. Wine Spectator magazine recently informed of that Sherry-Lehman’s landlord planned to vacate the store by June 16 if back rent of $3.6 million was not paid.
Sherry-Lehman also owed $2.7 million in unpaid sales tax and owed millions of dollars more to lenders.
People familiar with the criminal investigation said the Justice Department was participating, as the alcohol was shipped across state lines.
The investigation is being partially handled by the FBI’s Art Crimes Team, whose mission includes the investigation of rare antiques and other valuable collectibles. Some wines sold by Sherry-Lehman sell for thousands of dollars per bottle.