“Operation Swill”: New Jersey ABC and Division of Criminal Justice Raid 29 Bars and Restaurants That Allegedly Served Cheap Alcohol as “Premium” Brands

On May 23, 2013, New Jersey’s Attorney General Jeffrey Chiesa and Division of Alcoholic Beverage Control (“ABC”) Director Michael Halfacre announced the details of “Operation Swill,” a year-long investigation involving more than 100 investigators throughout New Jersey. Operation Swill reached its climax one day earlier, when ABC and Division of Criminal Justice personnel executed raids on 29 establishments throughout New Jersey suspected of substituting premium alcoholic beverage brands with “well brand spirits,” i.e., non-premium brands. N.J.A.C. § 13:2-23.19 prohibits a licensee from substituting another brand other than ordered by a customer unless agreed to by the customer. Approximately 1,000 bottles were seized during the raids, which will be held for further testing by the ABC and manufacturers.

The targeted establishments will have seven days to provide sales and invoice records that include information about the 20 brands of interest. Pursuant to N.J.A.C. § 13:2-19.11, penalties range from a 5 to 20-day suspension for each offense; thus, if further testing proves any of the seized bottles did not contain the correct labeled alcohol, that bottle could result in multiple violations based on the potential drinks that could have been poured. According to the ABC, establishments could also face a 30-day suspension pursuant to ABC regulations for any illegal activity on the licensed premise, and an additional 30-day suspension for not cooperating in the investigation.

Brett S. Theisen is an Associate in the Gibbons Financial Restructuring & Creditors’ Rights Department. Mark B. Conlan, a Director in the Gibbons Financial Restructuring & Creditors’ Rights Department, and Howard D. Geneslaw, a Director in the Gibbons Real Property & Environmental Department co-authored this post.

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