Alert, SGWS, Breakthru Fined Millions for "Misconduct" in PA

FILED JULY 27, 2017

The US Attorney's Office in Pennsylvania and four industry members including Southern Glazer's, Breakthru Beverage, White Rock Distilleries and Pio Imports, have entered into non-prosecution agreements requiring the companies to pay a total of $9 million in monetary penalties for providing "things of value" to PLCB executives, per a release from the state.

Recall, the former director of marketing for the PLCB, Jim Short, pled guilty to honest services fraud in 2015 [see WSD 09-17-2015]. The charges against the industry members are based on Jim receiving "numerous benefits from White Rock and Capital Wine and Spirits over a ten-year period of time."

The four companies have agreed to: (1) the monetary penalties below; (2) implement compliance measures; and (3) refrain from engaging in similar activities going forward.

-- Southern Glazer's to pay $5 million
-- Breakthru to pay $2 million
-- White Rock Distilleries to pay $2 million
-- Pio Imports to pay $200,000

"US Attorney Brandler noted several factors that informed these resolutions, including 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 was discontinued in 2012 when the Pennsylvania Ethics Commission initiated its investigation into this matter," per the release.

US Attorney Brandler says the penalty "more than disgorges the financial benefits received and discourages future misconduct by those in the industry."

UPDATE 4PM. In response, SGWS said in a statement sent to WSD that the actions in question were isolated to Pennsylvania, and even there, they ceased in 2012.

"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.  We are continually evaluating and strengthening our compliance programs and policies.  Our expectation is that every employee will adhere to the highest ethical standards," per evp and general counsel Alan Greenspan.

Meanwhile, no sentencing hearing has been scheduled for Jim Short yet.

Until tomorrow,
Your Editors

Emily Pennington - emily@winespiritsdaily.com
Sarah Barrett - sarah@winespiritsdaily.com

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