Famous wine shop Sherry-Lehmann faces criminal investigation
The Justice Department has convened a federal grand jury as part of a criminal investigation into Sherry-Lehmann Wine & Spirits, the venerable New York City wine merchant, according to former employees contacted by authorities.
Founded in Manhattan in 1934, Sherry-Lehmann has long been one of the elite retailers of fine wines in the United States. Last month, however, The New York Times reported that the store had failed to deliver large quantities of valuable wine to prepaid customers. The Times also quoted former employees as believing Sherry-Lehmann improperly sold customers’ rare bottles from a storage facility to other customers.
The criminal investigation is being conducted by, among others, the US law firm in Manhattan, the Postal Service and the New York Police Department. It is aimed, at least in part, at Shyda Gilmer and Kris Green, the owners of Sherry-Lehmann, according to the former employees, who said they were questioned about their dealings with the owners.
Witnesses have been asked to appear before a federal grand jury in Manhattan later this month, the former employees said.
A spokesman for the US Attorney’s Office declined to comment. FBI representatives involved in the investigation; the postal service; and the New York Police Department did not immediately respond to requests for comment.
Eric Andrus, a Sherry-Lehmann spokesperson, did not respond to requests for comment about the investigation. Mr. Gilmer and Mr. Green also did not respond to requests for comment.
Mr Gilmer and Mr Andrus have previously said delivery of some wine was delayed by Covid-19 and tariffs on French wines and that the store would deliver the missing wines by the end of the year. They denied that Sherry-Lehmann improperly sold bottles from Wine Caves, the storage facility owned by Mr. Gilmer and Mr. Green.
The New York State Liquor Authority suspended Sherry-Lehmann’s liquor license this year after the store failed to pay a renewal fee. Before the license was reinstated weeks later, Sherry-Lehmann sold $358,000 worth of wine to a real estate investor, according to invoices and other documents reviewed by The Times.
Mr Gilmer previously denied that Sherry-Lehmann was selling wine while his license was suspended, saying the property investor simply wanted his wine transferred from Wine Caves to another storage facility. Mr. Gilmer did not comment on why a Sherry-Lehmann invoice listed the transaction as a sale.
Three Sherry-Lehmann customers filed lawsuits against the store, claiming they never received more than $1 million worth of wine they paid for. Sherry-Lehmann has denied wrongdoing and has attempted to dismiss the lawsuits. (The Times revealed in its May 25 article that this reporter paid about $6,300 for wine he never received from Sherry-Lehmann.)
After the article was published in The Times, the State Liquor Authority opened an investigation, said William Crowley, a spokesman for the authority. The authority is cooperating with the criminal investigation.
Mr. Gilmer started at Sherry-Lehmann as a temp before becoming a full-time salesperson and eventually part owner. Mr. Green is a former hedge fund manager and client of Sherry-Lehmann who became a co-owner in 2013.
The Times reported last month that wine belonging to Mercedes Bass, the former wife of oil billionaire Sid Bass, had been taken from Wine Caves without her consent and delivered to another customer. Mr Gilmer said at the time that the transfer was a mistake and would be returned to the Bass family within days, along with all the other wine the Basses had stored in Wine Caves.
Mr Andrus said the Bass family collected their wine on June 1. A spokeswoman for the family replied that this was not true.
Sherry-Lehmann’s Park Avenue store has been closed since March. Mr. Andrus said it would reopen soon. Wine Spectator magazine recently reported that Sherry-Lehmann’s landlord was planning to move to vacate the store unless he paid $3.6 million in back rent by June 16. Andrus said on Friday that Sherry-Lehmann has “fulfilled its rental obligations”.
Sherry-Lehmann is also in arrears with $2.7 million in unpaid sales tax and still owes lenders millions of dollars.
People familiar with the criminal investigation said the Justice Department took the lead, in part because wine was being shipped across state lines.
The investigation is being conducted in part by the FBI’s art crime team, which investigates rare antiques and other valuable collectibles, among other things. Some of the wines sold by Sherry-Lehmann sell for thousands of dollars a bottle.