Beer Bust: Montgomery County Employees Accused of Skimming Cases - NBC4 Washington
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Beer Bust: Montgomery County Employees Accused of Skimming Cases

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    The News 4 I-Team spent six months investigating Montgomery County's Department of Liquor Control after multiple sources told us some government employees are stealing the beer they’re supposed to be delivering. (Published Thursday, Nov. 6, 2014)

    If you’ve bought a drink, sold a drink or even downed a drink in Montgomery County, Maryland, it likely had to go through one building first -- the Department of Liquor Control. The county is one of the few jurisdictions in the area that controls all the buying and selling of alcohol. The agency takes orders and makes deliveries to almost 1,000 restaurants, bars and stores. And it makes big money, generating $34 million in profit -- more than any other county agency.

    But multiple sources told the News4 I-Team some county employees have been skimming cases of beer and selling them on the black market. One store owner, who did not want to be identified for fear of retaliation, said a county deliveryman recently tried to sell him beer under the table. "If I said no, I was worried he might hurt me," he said. The deliveryman wanted cash for extra cases on his truck, telling the store owner, "'I got 10 extra cases of beer. You want to buy at cheap price?' I didn't give him a chance to discuss further detail because my answer was no, no, no." Another store owner shared a similar story but said his delivery guy offered him extra cases in exchange for cigarettes.

    According to insiders with the Department of Liquor Control, it’s been going on for years. "The people who are immigrants are very vulnerable," a county employee told the News4 I-Team. "I believe there's intimidation. Maybe they should say no, but they feel intimated and go along with it."

    Multiple sources inside the agency said the theft likely goes down in one of two ways. A delivery crew deliberately keeps a couple of cases on the truck but tells the store they were not on the truck. The crew then sells those extra cases to another business for cash at half price later on the delivery route. Or, the store owner is in on it. The store pays the delivery crew in cash for some of the beer. Either way, the delivery crew fills out a Department of Liquor Control credit form, claiming the order had a "short on truck."

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    The I-Team asked Director of Liquor Control George Griffin, who is the person in charge of alcohol sales for the county, if these "shorts" could be a way to hide theft. "Well, that's always the fear. They say it wasn't on the truck and it was," said Griffin. But Griffin pointed out incomplete deliveries or "shorts" are an unavoidable part of business. He said regular counts or audits should flag any missing inventory for the county. "We should be able to account for virtually every case in the system one way or the other."

    But our insiders said the county delivers so many cases, and makes so much money, it's easy to hide thefts. The I-Team found the credit forms are also used to record broken bottles, unwanted orders and other returned inventory. The county told us it only knows how much it credits stores in total. It doesn’t track how much it credits back to each store specifically for shorts. Nor does it track which stores or which trucks have the highest number of shorts.

    So, the I-Team spent nearly two weeks going page-by-page through six months' worth of credit forms and saw trends. Two-thirds of businesses were shorted, some more than once a week. Most of those stores get their beer from the same three delivery crews, who the I-Team found had as many as three times the number of shorts compared to other trucks.

    "There's no way that continuously the same trucks should have problems all the time without something happening to them," one of our agency insiders said.

    After seeing what we found, Griffin said, "It is surprising to see some of the patterns." But DLC's director said any potential thefts are small compared to the volume of beer sales in the county, almost five million cases a year. "You never make so much money that you're not worried about problems. Absolutely cause for concern, and I'm glad you brought it out."

    Griffin said he was concerned enough to start making immediate changes. As a direct result of the I-Team investigation, the county said it has "modified and strengthened some internal controls and management processes." Now, if a delivery has a short or any missing product, the crew must immediately notify a supervisor. The supervisor must then approve any adjustment at that time or meet with the business to reconcile any issues with sizable shorts. Management will also review surveillance video of the actual loading at the county warehouse to verify if the product actually made it on the truck.

    Another change the county hopes will alleviate potential for theft? Beginning next year, the county moves to a new electronic system, instead of paper based. All the alcoholic products in and out of the warehouse will be scanned and tracked.

    Griffin said he will now randomly team up employees and change delivery routes to break up those who have been working together in the past. He said the county plans to monitor crews flagged in the I-Team’s reporting.

    The I-Team was told at least three deliverymen are now under investigation as a result of the I-Team investigation. Another driver quit.