A week after requesting information about possible contacts between the New Hampshire Liquor Commission and a New York man charged with bootlegging, the IRS is now withdrawing its summons, according to the Commission.
On March 30th, the state-run Liquor Commission sent an email to store managers stating that the IRS wanted copies of any emails, notes, voicemails or any other communications between store employees and two New York residents, Xiaojun Zheng and Juncheng Chen.
Last December, Chen was arrested in New York and charged with felonies related to bootlegging after bringing more than 750 liters of liquor purchased in New Hampshire across the New York State border. It is unclear why the IRS was also seeking information about Zheng, who doesn’t face charges in either state or federal court at this time.
On Thursday, however, the Commission sent a follow up email to all store managers saying that they had been notified that morning that “the IRS is withdrawing its summons for information at this time.”
The email, sent by store operations administrator Jim Richards and first reported by the Union Leader, says the Commission is always ready “to assist the IRS or any law enforcement agency.” He concludes the email by encouraging staff at its 79 retail stores throughout New Hampshire to provide “outstanding customer service.”
It isn’t clear if the Liquor Commission turned over any communications between store employees and the two men in focus, Zheng and Chen. It also remains unknown if the IRS, which doesn’t comment on active investigations, is pursuing information about the Liquor Commission’s handling of large transactions, or if Zheng and Chen remain in the crosshairs of an active tax evasion case.
Last Wednesday, two days prior to the initial email from the Liquor Commission, IRS agents made visits to several New Hampshire liquor stores as well as the Commission’s headquarters, with the federal agency only confirming it was “conducting official business” in New Hampshire. According to sources, IRS agents interviewed store employees, as well as customers seen making large transactions at state liquor stores.
Those on-the-ground actions came amid calls by Executive Councilor Andru Volinsky for the state Attorney General to investigate how the state run liquor stores monitor potentially illegal large cash transactions, many involving out of state residents.
In February, Volinsky released a memo detailing a series of concerns he has about the Commission potentially exposing the state to legal action for failing to appropriately report cash transactions in excess of $10,000, as required by the Internal Revenue Service. Volinsky claims he witnessed one such transaction in the Keene retail store, the result of a tip from a whistleblower who has since been fired by the State.
The Attorney General’s office has reviewed the Commission’s policies on large cash transactions several times in recent years, according to the Department of Justice. It says it is still looking into Volinsky’s concerns.