Chicago Lawsuit Filed by Rolex AD Former Employee

[BillA]

As I said in my former post to the thread taken down, there are federal crimes going on here not just civil.

[breitlings]

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

That would devalue the brand. I’d guess if anything they are going to cut production and go further up market to weather the iwatch like they did with quartz.

[77T]

Originally Posted by breitlings

That would devalue the brand. I’d guess if anything they are going to cut production and go further up market to weather the iwatch like they did with quartz.

They already outproduce all other Swiss mfr.’s and hasn’t hurt the GPM methinks.

But I agree they won’t quadruple production of sports models. That’s what it would take to bring fulfillment of demand to equilibrium.

I think they struggle with supply chain and distribution on top of demand issues.


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[77T]

Originally Posted by CFR

I also wonder if anything went on with their Patek pieces.

Yes the complaint included allegations that similar activity extended to PP models.


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[Alex369]

This is really disheartening to read on many levels.

I know that the Rolex wait list issue has been beaten to death from every angle, but as a faithful AD customer who has attempted to politely and patiently navigate the Rolex AD maze - establish a buying history - establish relationships, etc - it's pretty disgusting to read that much of the fuss and waiting is likely due to blatant AD corruption and disregard for honest retail customers. And now, at least in this particular instance, the retail customers waiting for hard-to-get models have to ostensibly start from zero with other ADs (assuming CDP will lose their Rolex account regardless of the ultimate success of the lawsuit...).

I wish I didn't want another Rolex...

[T4ME]

Next time they should get a proof reader... nor may they pay a feel for any referrals.


RETAIL SALES ONLY. Jewelers will sell Rolex products only to
ultimate consumers, at the retail level, in transactions that
originate over-the-counter at its authorized location(s). All
other methods of the sale (except for Rolex-approved
corporate/presentation sales) are considered transshipping. Rolex
is the sole distributor of Rolex watches in the United States.
Rolex has not authorized any ORJ or any other person to act as a
wholesaler or subdistributor; therefore, any transshipment of
Rolex watches, even if unintentional, is prohibited. ORJs may not
sell watches to customers referred from outside their local
market area (unless the sale is transacted in person at an
authorized location), nor may they pay a feel for any referrals.

[T4ME]

Next time they should get a proof reader... nor may they pay a feel for any referrals.


RETAIL SALES ONLY. Jewelers will sell Rolex products only to
ultimate consumers, at the retail level, in transactions that
originate over-the-counter at its authorized location(s). All
other methods of the sale (except for Rolex-approved
corporate/presentation sales) are considered transshipping. Rolex
is the sole distributor of Rolex watches in the United States.
Rolex has not authorized any ORJ or any other person to act as a
wholesaler or subdistributor; therefore, any transshipment of
Rolex watches, even if unintentional, is prohibited. ORJs may not
sell watches to customers referred from outside their local
market area (unless the sale is transacted in person at an
authorized location), nor may they pay a feel for any referrals.

[SMD]

Originally Posted by BillA

As I said in my former post to the thread taken down, there are federal crimes going on here not just civil.

And if there are, which no one can tell from a complaint, this lawsuit has nothing to do with those alleged crimes.

[TheVTCGuy]

Originally Posted by SMD

And if there are, which no one can tell from a complaint, this lawsuit has nothing to do with those alleged crimes.

Well, what is claimed, is that the Chinese National, who was in the country on a student visa, but who is not enrolled in any form of education, was working for the store and selling the new pieces to China, which was paying a premium for them. I don’t know immigration laws enough to know if that is a federal or criminal offense, but if true, immigration would surely be interested.

[SMD]

Originally Posted by TheVTCGuy

Well, what is claimed, is that the Chinese National, who was in the country on a student visa, but who is not enrolled in any form of education, was working for the store and selling the new pieces to China, which was paying a premium for them. I don’t know immigration laws enough to know if that is a federal or criminal offense, but if true, immigration would surely be interested.

Deleting.

[Themarinesurveyor]

Thank you for reposting this link. Goes without saying that the majority of those who are multiple Rolex buyers know this goes on, but this business goes on unabated because Rolex despite their conditions of sale are fully aware "that business is business" and actually benefit from the increased prices that Grey market dealers command for SOME of their models.
I am fortunate to own more than one Rolex in my collection and presently have my name on three separate ADs list for over six months for a 62510BLRO which is fetching over $19,000.00 grey market in these troubled times. Bearing in mind the official dealers that sold this model already made their profit plus whatever "bonus" they negotiated. So us "schleps" as one prominent dealer once named us just have to sit and wait .....complain as much as you like, it ain't gonna change!

[LouG]

Any thoughts on where this may go now that it's made the YouTube community.....?

[Cloudchaser]

Originally Posted by SMD

The gist is that the dealer allegedly violated their agreement with Rolex (a commercial dispute) and therefore Rico? How could this be criminal? This is a reminder that it is way too easy to get into law school. Lawsuit is going nowhere.

Two things. First, tax evasion charges will be a big part of this. Second, if they shipped internationally on any of this, their duty forms have issues...guaranteed.

Tax evasion will end up being the critical point, but a retailer exporting illegally won't be a small issue in this.

My gut tells me, though, that the AD has clean hands relating to shipping and all the hand greasing was cash and anonymous.

[SDGT3]

I actually surprised that many here are surprised this is going on at this AD. Guaranteed this is not the only AD with these practices with the caveat that they may be selling to in country grey dealers.

Imagine you own an AD. You are requested by Rolex to have certain standards and parameters to have this privledge, but you have little to no inventory to sell. Your rent is the same but display cases are always empty. You can either sell to regular customer and make $2400 per $13k watch or $2400+ to a grey.

[Joshua_J0]

Crazy to hear about this happening right in my backyard. Always felt the Old Orchard CDP had something shady going on

[Alex369]

Originally Posted by Cloudchaser

Two things. First, tax evasion charges will be a big part of this. Second, if they shipped internationally on any of this, their duty forms have issues...guaranteed.

Tax evasion will end up being the critical point, but a retailer exporting illegally won't be a small issue in this.

My gut tells me, though, that the AD has clean hands relating to shipping and all the hand greasing was cash and anonymous.

But doesn't the complaint specifically allege that a large number of the purchases were made by a SA, with her own personal credit card? I mean, the scheme "profits" might have been divvied up in cash, but the purchases were still illegal and traceable, right?

[77T]

Originally Posted by Cloudchaser

Two things. First, tax evasion charges will be a big part of this. Second, if they shipped internationally on any of this, their duty forms have issues...guaranteed.



Tax evasion will end up being the critical point, but a retailer exporting illegally won't be a small issue in this.

What did you see in the complaint that proved the AD did not book the sales at MSRP and then did not pay the local and state sales taxes? I get that the “middle trader” accepted funds in excess of MSRP from the grey dealers. The AD likely accounted for their inbound inventory from RUSA, and later disposition to keep accounts balanced.

If the Shipper's Export Declaration is completed electronically, and declared as a Swiss watch at MSRP value, then no US Customs violation. Likely they had the requisite licenses for other aboveboard transactions.

It’s a set of shady dealings for sure. But can’t find the “illegal” part without more evidence.



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[TheVTCGuy]

You know, I honestly don’t have a clue if there will be criminal proceedings or conviction, but I am VERY glad to see this news. As a regular and poor schlep that loves Rolex, and would love the ABILITY to be able to walk in to an AD and purchase one at MSRP, I have hopes from this lawsuit. I HOPE, that it will bring this practice to light, HOPE that it will curtail this practice and make more models available at the AD.

I am not Naive, I don’t believe this is the cure all, and that next week display cases will be over-flowing, but hope this will maybe begin the process of improving the situation.

What was that quote from Shawshank Redemption?

“Hope is a good thing, maybe the best of things, and no good thing ever dies”

[daOnlyBG]

Originally Posted by Chromosome

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?

No thanks. I'm happy knowing my watch retains most of its value (and then some).

[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.

[rambo99]

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

it would be much easier for rolex to double up the msrp of all sought after models. grey dealers will be in big trouble.

[dauster]

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.

thank you for this, makes a lot of sense.

Is it maybe that Rolex ultimately doesn't care as long as they sell the watches?

[jaisonline]

Some consolidation of links.

Overall summary of Chicago AD:

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

submitted Complaint

https://www.scribd.com/document_down...wrUBWs4TWvQhsI

[BS26809]

Interesting read! I hope Rolex steps in and removes their AD status.

I’ve been into that store a few times and the SA’s always had a weird/snobby vibe. During one of the visits, the SA implied that the watch I was wearing was fake, lol. not getting any business from me.

[JePro]

I have bought a watch from CD Peacock (Northbrook, IL) awhile back, a two-tone Rolex sub... Like most ADs, stainless steel sports model were a "rare" commodity and extremely hard to buy in this AD.

Now, I know with certainty...

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

[cocoabutter]

Interesting - could go either way this one

[BS26809]

“rare”............. to be sold at MSRP to customers

[fskywalker]

Think saw another thread today on the same subject


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[77T]

Several parallel threads on this.


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[HogwldFLTR]

Interesting article; not only does it apply to the sellers but to the buyers as well imho!! I wonder how many Greys are involved in this sort of illegal activity?