N.H. AG clears state liquor stores of any wrongdoing related to cash transactions with bootleggers
After a four-year investigation, the New Hampshire Attorney General’s office says the state’s Liquor Commission isn’t violating any state or federal laws in how it handles large all-cash sales.
Concerns about cash transactions were first raised in 2018 by former Executive Councilor Andru Volinsky and Richard Gulla, president of the State Employees Association, which represents liquor store employees. They alleged that 'bootleggers' from out of state frequent New Hampshire liquor stores, purchasing huge quantities of liquor using all-cash transactions. They alleged customers travel to multiple locations in a single day to avoid triggering reporting requirements to the IRS, which tracks cash sales in excess of $10,000.
In a 12-page reportreleased Friday, the attorney general’s office says it found no evidence of wrongdoing by the commission, and that the agency has policies in place that encourage employees to report suspicious transactions. The office also included a letter from the IRS confirming that government entities are not required to submit paperwork for cash sales in excess of $10,000.
The attorney general also noted that there are no laws capping the size of a transaction at state liquor stores, and that “the Legislature has not imposed any limits upon the amount of liquor that a person or business can purchase in a single transaction.”
The liquor commission has implemented a range of policies related to what it calls “large volume cash sales,” including the use of cash-counting machines at registers and armored vehicles to deposit funds.
“This IRS ruling and DOJ report provide a long-anticipated and definitive end to an attempt to smear the reputation of one of the nation’s leading retailers and most successful beverage alcohol control states,” said Liquor Commission Chairman Joseph Mollica in a statement Friday.
The statement noted that New Hampshire is not required to enforce policies other states may have regarding the transportation of alcohol, and “faces no legal exposure for the failure to do so.”
The attorney general’s report criticized Volinsky and Gulla for their own stake out, conducted at a Keene liquor store, where the pair observed a series of transactions that appear to have violated the commission’s policies. An employee who assisted Volinsky and Gulla was subsequently fired by the commission, though he would later receive a $34,000 settlement.
“Officials or citizens conducting their own investigations may imperil state government functions and law enforcement efforts, and put not only themselves, but the public at risk,” state officials wrote in the report.
In a statement issued following the report’s release, Volinsky said he was “glad that the state followed my advice and finally obtained a direct ruling from the IRS about their bootlegging practices that some have characterized as akin to organized crime.”
He also disputed the attorney general’s contention that there is no evidence that the cash used in the transactions may come from illegal sources.
“The state’s claim that the cash involved in these transactions is not related to
Hennessy cognacappears to be the spirit of choice for bootleggers, with the lower price in New Hampshire tempting customers to make road trips from other states. By 2015, it was the state’s top selling liquor; in 2021, it was the second most purchased liquor, trailing Tito’s Handmade Vodka.
Editor's note: This is an updated post. The original story was published March 25.