The Justice Department has taken a significant step in its criminal investigation into Sherry-Lehmann Wine & Spirits, a prestigious wine merchant in New York City. Former employees have confirmed that a federal grand jury has been convened, signaling the seriousness of the probe.
Sherry-Lehmann, established in Manhattan in 1934, has long been recognized as one of the top sellers of fine wines in the United States. However, recent reports from The New York Times have raised concerns about the store’s practices. It was revealed that customers who had paid in advance for large quantities of valuable wine were not receiving their orders. Former employees also alleged that the company was improperly selling rare bottles entrusted to them by customers.
The investigation is being conducted by various agencies, including the U.S. attorney’s office in Manhattan, the Postal Service, and the New York Police Department. The spotlight appears to be on Shyda Gilmer and Kris Green, the owners of Sherry-Lehmann, with former employees stating that they have been questioned about their interactions with the owners.
According to sources, witnesses have been asked to testify before the federal grand jury in Manhattan later this month.
Officials from the relevant agencies, including the U.S. attorney’s office, F.B.I., Postal Service, and the New York Police Department, have refrained from making comments about the ongoing investigation.
Neither Eric Andrus, the spokesman for Sherry-Lehmann, nor Mr. Gilmer and Mr. Green have responded to requests for comments regarding the investigation. Previously, they had attributed delayed wine deliveries to factors such as Covid-19 and tariffs on French wines. They have also denied any wrongdoing in the sale of bottles from their storage facility, Wine Caves.
Earlier this year, Sherry-Lehmann had its liquor license suspended by the New York State Liquor Authority due to non-payment of renewal fees. During that period, the store managed to sell $358,000 worth of wine to a real estate investor, as evidenced by invoices and records reviewed by The New York Times. Mr. Gilmer has denied allegations that the wine was sold during the license suspension and claimed that the transaction was solely for transferring the wine to another storage facility.
Sherry-Lehmann faces a legal battle as three customers have filed lawsuits against the store, claiming non-delivery of wines worth more than $1 million that they had purchased. The company has denied any wrongdoing and has sought dismissal of the lawsuits. It should be noted that The New York Times reporter covering the story also disclosed being a victim, having paid $6,300 for wine that was never received from Sherry-Lehmann.
Following The New York Times’ article, the State Liquor Authority initiated its own investigation, working in conjunction with the criminal investigation conducted by the Justice Department.
Sherry-Lehmann co-owner Shyda Gilmer initially started with the company as a temporary worker before becoming a full-time salesman and eventually a co-owner. Kris Green, on the other hand, joined Sherry-Lehmann as a co-owner in 2013 after working as a hedge fund executive and being a customer of the store.
The recent developments have cast a dim light on the actions of Sherry-Lehmann. It was reported that wine owned by Mercedes Bass, the ex-wife of oil billionaire Sid Bass, was removed from Wine Caves without her permission and delivered to another customer. Sherry-Lehmann’s response at the time was that it was a mistake and the wine would be returned to the Bass family promptly, along with all their other stored wine.
However, tensions emerged as Mr. Andrus claimed that the Bass family had retrieved their wine on June 1, while a spokeswoman for the family disputed this statement.
Due to the closure of its Park Avenue store since March, Sherry-Lehmann has faced financial challenges. Nevertheless, Mr. Andrus has assured that the store will reopen soon. However, the Wine Spectator magazine recently reported that Sherry-Lehmann’s landlord intends to evict the store unless it settles a backlog of $3.6 million in rent by June 16. Mr. Andrus maintains that the store has fulfilled its rent obligations.
In addition to these financial predicaments, Sherry-Lehmann is also in arrears of $2.7 million in unpaid sales tax and owes several million dollars to lenders.
Insiders with knowledge of the investigation have revealed that the Justice Department is leading the probe, possibly due to the interstate shipment of wine. The F.B.I.’s art crime team, responsible for investigating cases involving valuable collectibles, is also involved. This is noteworthy as some of the wines sold by Sherry-Lehmann reach prices of thousands of dollars per bottle.
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