Washington Post Covers Illegal DTC Sales by Law Enforcement

Nov 05, 2021
Washington, D.C.
The Illegal Selling and Shipping of Alcohol by Washington D.C.’s Fraternal Order of Police Lodge

Today, The Washington Post ran a story, written by Peter Hermann, David A. Fahrenthold and Dana Hedgpeth, on the illegal selling of alcohol by Washington, D.C.’s Fraternal Order of Police Lodge. It’s titled “The rise and fall of the Jack Daniel's committee: How D.C.'s police lodge made thousands selling whiskey online.” The story shows that even those who should know or be familiar with the laws regulating alcohol are confused. Below are segments of the article. To read the full article, visit The Washington Post.


The Washington Post writes:


In March 2017, the leaders of Washington's Fraternal Order of Police Lodge - an umbrella group for police unions in the capital - told their members about an exciting new idea.


They were selling whiskey on the Internet.


It was called the Jack Daniel's Fundraising Committee…


One of the few non-police officers in the room spoke up.


"Is this, like, legal?" said the woman, who union leaders said was a paralegal.


"Yes. Absolutely," said Andy Maybo, then the lodge's president, who made the recording and shared it with The Washington Post…


Over the next three years, the D.C. lodge - a group of active and retired police officers, working from a clubhouse near the FBI Field Office - sold more than 3,000 bottles of whiskey to people across the country, according to internal lodge documents and interviews with lodge leaders.


It’s hard to imagine how this was not flagged by at least one law enforcement member…But the lodges 2020 internal inquiry found:


"All Jack Daniel's bottled beverages were sold illegally without the proper licensing and shipped in violation of the law.”


A Nashville attorney who focuses on liquor regulations was quoted in the story saying:


"That's selling alcohol without a license, and it's a crime," said Will Cheek III, a Nashville attorney specializing in liquor regulations.


But what is the repercussions for this illegal behavior? The Washington Post reports:


Illegal shipment of liquor is a misdemeanor or even a felony in some states. But legal experts said it's rare that anyone faces jail time for illegal alcohol sales.


Instead, offenders typically face civil penalties, like a fine, a lawsuit or a revocation of an existing liquor license - which could be devastating to the financially shaky D.C. lodge.


Cheek said that the D.C. lodge's operation seemed to violate laws meant to stop minors from obtaining alcohol through the mail.


So how did the lodge acquire these bottles and sell them illegally?


The lodge bought a 53-gallon barrel of whiskey for $11,000 at the Jack Daniel's distillery in Lynchburg, Tenn. The distillery put that whiskey into 240 bottles, and Kruggel had them engraved with the D.C. lodge's logo. The lodge advertised the bottles on Facebook, with a link to pay via PayPal; buyers could have the bottles shipped or pick them up at an annual police convention in D.C.


Kruggel sold nearly 300 bottles in less than two days…without any knowledge of who was really on the receiving end of the bottle. And what did Jack Daniel’s think as they were selling these barrels to a police fraternity?


At Jack Daniel's, spokesman Svend Jansen said the distillery knew the lodge was reselling these bottles of whiskey but assumed they were doing so legally - "given the fact this was a law enforcement" organization.


Kruggel, who was tasked with picking up the bottles, having them engraved and then selling them, would travel across the U.S. at the expense of the lodge. Quickly, his illegal online sales, turned into illegal in-person sales…


Then, the lodge's internal inquiry found, Kruggel sold some of the engraved bottles in person, from booths set up at police conventions in D.C., Tennessee, Louisiana and other states. And he sold some over the Internet, taking payment via PayPal and shipping the bottles, according to lodge records.


He had, in effect, entered the lodge into the highly regulated business of selling liquor by the bottle.


But he does not appear to have obtained the licenses required to do it legally.


So, what are the liquor laws in D.C.?


In the District, for instance, selling liquor by the bottle requires an "off-premises retailer" license. But the lodge did not have one: It had only a "club" license, which limits the lodge to selling liquor by the drink in its restaurant. In Tennessee, Louisiana and New Jersey, where the lodge's investigation found Kruggel sold bottles at police conventions, authorities said they could find no evidence he'd obtained a permit to do so.


Direct-to-consumer shipping of alcohol is highly restricted for good reason. Yet, the lodge was shipping engraved bottles to consumers in many different states.


By talking to buyers, The Post found that the D.C. lodge had shipped Jack Daniel's to consumers in at least three of those states: Georgia, Iowa and Maryland…The Post also found that the lodge shipped a bottle to a buyer in Florida, where shipping liquor is legal only with a license. The lodge did not have a license, according to state records.


The lodge's internal report found that the committee did not have permits to sell bottled liquor "anywhere in the United States."


The selling of the lodge’s engraved bottles has stopped, but the fact that it was allowed to continue for so long (especially by members of law enforcement) is shocking. It is unknown if these bottles were sold to minors. But it’s an important reminder for why we have a three-tier system, laws and regulation. Alcohol is not like other commodities – and it should never be treated as such.


In March 2020, after the Jack Daniel's committee was shut down, lodge leaders discovered more than 1,000 liquor bottles stored around the clubhouse. There were 300 more bottles in the national Fraternal Order of Police warehouse in Nashville - so much that the lodge needed a special permit just to drive it back to Washington.


Read the full story HERE.