Chicago Lawsuit Filed by Rolex AD Former Employee

[Watchflair]

So crazy how common this is - I know of a manager at an AD in NY that has been doing this for years with one particular customer. Customer purchases the piece - ships out of state to save tax - has various addresses and names he ships to - splits the profit 50/50 with the manager. Absolutely crazy.

[DLRIDES]

Originally Posted by HogwldFLTR

I wonder how many Greys are involved in this sort of illegal activity?

Somewhere between 98.6% and 99.8%

[Andad]

This comes as no surprise to me.

But I have it on good authority and as advised by many on TRF that most if not all grey watches come from genuine retail purchasers.

So this must be a very isolated incident?

[nworbled]

“Breaking: Rolex AD sued for racketeering and fraudulently selling hot models to the grey market ” via @watchville https://api.watchville.co/v2/posts/57832/click


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[Bruce_Wayne]

Someone posted the court filing a few days ago along with the terms and agreement between the AD and Rolex USA. Interesting to see if anything changes


Sent from the Waitlist at 6 different ADs

[ademarco]

Wow! I can see the manufacturers moving to more direct to consumer. It pays to play I guess. I can only imagine the overhead at these boutiques and trying to keep the lights on.


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[JePro]

Originally Posted by nworbled

“Breaking: Rolex AD sued for racketeering and fraudulently selling hot models to the grey market ” via @watchville https://api.watchville.co/v2/posts/57832/click


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Not really breaking, lol. I just posted on about this few hours ago and then a fellow TRF member told me it was also posted before by others...

Anyhow, this AD in questioned used to be my Rolex AD. I hope this lawsuit sheds more light about other AD's illegal practices like tax evasion, racketeering, etc.

[MiDoon]

Originally Posted by SMD

So, let me see if I have this right -- there has been tax fraud and RICO!, CDP blatantly cheating on their agreement with Rolex and the only place any of this is brought up is in a civil complaint by a former employee trying to claim whistle blower status?

CDP is still an AD for Rolex correct? Odd given the "facts" alleged.

Neither the US attorney nor any authority that actually has jurisdiction over this matter has not done anything to our knowledge? Again, odd given the "facts" alleged.

Or maybe the former employee didn't contact Rolex, or the state of Illinois or anyone else before filing the suit? Again, seems like a stretch since most "whistleblowers" have specific remedies to them at the state level of which they can avail themselves for free without having to hire a lawyer (although odds are this is a contingency case, because again, RICO!).

So Rolex, the federal authorities and everyone else that actually has the power to do something about this conduct has done nothing because either (1) maybe, just possibly, the facts are not quite what is being alleged, (2) this is the first time these allegations have been aired and only now will the authorities and Rolex get involved or (3) there is some conspiracy and the only truth teller in this entire tale is the former employee that just so happens to get treble damages if successful for using the magic RICO word.

Anyone who has the first bit of experience in these matters sees the RICO allegation for what it is -- a settlement shakedown. There is zero chance this goes anywhere on RICO. None. When you see RICO in a complaint you know the plaintiff has got nothing.

I appreciate people want this to be illegal, but the reality is if this is anything its a dispute between Rolex and the AD, and so far anyway Rolex is sticking with the AD.

So perhaps you are right and perhaps you are not. This is of course speculation on your own part. Investigative agencies do not routinely disclose their investigative subjects. If there is currently an active investigation you would not know it.

Some shall see.

[jaisonline]

Oh goodness I wish this 1st world problem was more reported on by the media. Might actually stop a good % of ADs from doing dealing w/ grey dealers.

[Sub*Man]

Juicy!

https://atelierdegriff.com/2021/02/1...o-grey-market/

[kizerman]

This is at least the third thread on this.

[SMD]

Originally Posted by MiDoon

So perhaps you are right and perhaps you are not. This is of course speculation on your own part. Investigative agencies do not routinely disclose their investigative subjects. If there is currently an active investigation you would not know it.

Some shall see.

Okay. So the plaintiff is not cooperating with them then? Because I would think it would be a hell of a lot easier to bring and win a civil suit once an investigation has been announced or charges have been filed. I mean even an ambulance chasing plaintiffs lawyer like the one we have here would not front run an open investigation.

Happy to wager if anyone wants to take the other side of this.

[sambb]

if you want to see direct to consumer, some of the annual reports of others point to growth - including richemont. That being said, i think this is the exception, as dealers are just part of their success.

I do believe that AD staff are in on the idea of selling to others. An AD recently told me that they had never seen even one OP41 since its release. Highly doubtful. Likely went to grays.

[MiDoon]

Originally Posted by SMD

Okay. So the plaintiff is not cooperating with them then? Because I would think it would be a hell of a lot easier to bring and win a civil suit once an investigation has been announced or charges have been filed. I mean even an ambulance chasing plaintiffs lawyer like the one we have here would not front run an open investigation.

Happy to wager if anyone wants to take the other side of this.

Did you read the complaint. Seems to me the plaintiff is a younger girl who figured out that a scam was taking place but thought she was doing the right thing by reporting what she witnessed to her bosses. Some bosses also passed the complaints up the chain to store management.

Later, even what the store management seemed to be involved, the plaintiff still thought she was doing the right thing. Management changed several times and each time she or another person reported the activity. So certainly there is a strong case for wrongful termination.

What got me was that they were shipping empty boxes to out of state locations. All of it would have to be provable of course. But I can tell you that based on the complaint, I could see a AG investigation from Illinois for loss of sales tax. They were dealing with a $10 million Rolex sales goal figure. So this would be a significant amount of lost state revenue involved.

As far as the lawsuit, the store probably would not want this to go to the extent of depositions. So I see a fairly quick settlement.

[HHIslander]

Some key points that should be emphasized.

-This is a civil case, not a criminal case. No one is going to jail, at least not yet.

-This is a wrongful termination case, not a RICO case. She is suing for wages, punitive damages and costs. Plaintiffs argue wrongful termination due to public policy exception and a violation of whistleblower statutes. In order to prove wrongful termination, they have to prove illegal behavior which is why RICO, etc. is all in there.

-Her lawyers most likely (99% confidence here) took this case on a contingency. IMO, it’s an extremely solid wrongful termination case. Plaintiffs aren’t going to settle for peanuts. A jury would eat this up.

-In regards to criminal charges, the DA surely has a copy of this and is investigating.

[McinRolex]

At least.

[JodyHighroller]

This is the fifth lol

[Andad]

What does this mean?

Neither the US attorney nor any authority that actually has jurisdiction over this matter has not done anything to our knowledge?

[tahitianmoon]

I hadn't seen this article until now. I live in Chicago and know of a local flipper who had a relationship of some kind with the Old Orchard Rolex AD. He lists them on Craigslist and butchers it so badly that you just ignore his posts. There's a new Cermit for listed on CL from this guy. Sorry but it pisses me off.

[BigBlue1]

Does it really surprise you?

[KVNNSCHNG]

Ibtl... again.

[porschejeff]

Very interesting article on an AD selling hot models to the gray market.


https://sub.rescapement.com/p/breaki...r-racketeering


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[warren G.]

Lol they are going just delete this thread. From this hour alone, I already seen at least 6 threads gone within mins.

[Goin2drt]

Not surprised at all. Rolex will claim they know nothing about it and do not support such activity.

[fskywalker]

Another thread on the same subject!


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[cvo]

I think this is happening a lot, folks are just getting away with this practice. More reason to have Rolex sell directly to end users via online purchases.

[boogiebot]

Originally Posted by Chromosome

Rolex is a joke at this point. Why don't they just up production and release more watches into circulation? This will kill the flippers. The 'grey market value' of Rolex watches will decrease but so what? I believe luxury watches should depreciate and people who can't afford to take the hit can't afford to own them! The real ballers can afford to lose the money

Because you said it already, it’s a joke. And to be honest the joke is on you and me as the consumer.


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[Cesium133]

I’ve visited that store many times. Used their appraisers and service center over the years and always had great experiences. Sorry to learn it has come to this. I’ve met some of those individuals and hope it works out for them. Terrible they would be treated in that manner. CDP has lost my business.

[Vaxe]

I can name 3 ADs in my area that does something similar, hope this case will discourage future activities so that folks can finally buy models they like at retail price.

Also, before the new style Rolex warranty card, if you look at posting from “trusted sellers” here you would see that some of them got their inventory from a handful of ADs. The names are blacked out and sometimes the last few letters can still be seen. Rolex should start targeting those as well.

[dauster]

I agree with all of you here but it doesn't seem logical for a company to destroy the hype and artificial scarcity they helped to create in the first place. They are obviously doing better than ever and also how much brand reputation damage is really at risk here for Rolex? maybe a few thousand people really care and know what's going on. the average consumer that buys 1-2 watches in their life doesn't care about backdoor AD dealings. All they see is hyped up watches that retain their value.