‘This is Unprecedented’: US Government Raids Offices of Nation’s Largest Wine and Spirits Distributor

Southern Glazer’s was raided by the IRS and TTB.

Regulators from the U.S. government conducted a raid on the offices of Southern Glazer’s Wine & Spirits, the U.S.’s largest wine and spirits distributor, the San Francisco Chronicle reported.

Per the Chronicle, agents from the Internal Revenue Service and the Alcohol and Tobacco Tax and Trade Bureau spent most of Wednesday “engaged in official action” at the Union City, California offices.

The Chronicle reported that representatives from the IRS and TTB confirmed that their representatives were on-site at the offices but did not reveal the purpose of the raid.

It is unclear what precisely the agencies were investigating. The TTB operates under the Treasury Department and is in charge of enforcing federal alcohol laws. The IRS enforces the federal tax code.

Wine-Searcher claims it spoke to a former government employee with knowledge of TTB operations, who said that “unfair trade practices” is the only issue he could think of that would involve both the TTB and IRS.

In 2017, Southern Glazer’s paid a $5 million fine after offering incentives — including World Series tickets, a trip to Aruba, a villa in a Jamaican resort and tens of thousands of dollars in cash — to employees of the Pennsylvania liquor control board.

“I would imagine that this is pretty well thought out,” liquor attorney Sean O’Leary told Wine-Searcher. “If the Feds are wrong, they’ll have major egg on their face. With the IRS involved, this is not a minor investigation. Al Capone got taken down by the IRS. The IRS has greater powers, maybe than any federal agency.”

O’Leary, who is based in Chicago, told Wine-Searcher “this is unprecedented” of the IRS and TTB raiding a major business.

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