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Jax Daily Record Monday, May 26, 201412:00 PM EST

Prosecutors drop case of 'modern-day bootlegging'

by: Mark Basch Contributing Writer

A year after his company filed for Chapter 11 bankruptcy, the former CEO of a Jacksonville-based liquor distributor has been cleared of charges that he was evading excise taxes on alcoholic beverages.

C.J. Eiras was arrested in August 2012 on 70 counts in what his attorney, Mitchell Stone, described as “a modern-day bootlegging case.”

However, the charges were dropped May 9 after the State Attorney’s Office investigated the case and decided not to prosecute it.

“It took a while but he made the right decision in the end,” Stone said.

Eiras was CEO of North American Food & Beverage Co. Inc., a publicly traded Jacksonville company formerly known as Liquor Group Wholesale Inc.

North American Food & Beverage filed for Chapter 11 in U.S. Bankruptcy Court in Jacksonville in April 2013. At the time, the company said the filing was not related to Eiras’ criminal case.

However, Eiras, who adamantly denied the charges, said last week that publicity about the case did have an impact on the company, which was licensed to operate in 32 states. He said the case was reported in national media covering the alcohol industry.

“This arrest obviously had a direct impact on our institutional shareholders,” Eiras said.

“We also lost a lot of support from our customers,” he said.

The Chapter 11 case is still pending but Jason Burgess, the company’s attorney, said North American Food & Beverage has “very minimal” operations. The company’s stock is no longer trading in the over-the-counter market.

Eiras and Stone said the criminal case was related to 61 drums of undrinkable alcohol that was being stored in Liquor Group’s Westside warehouse. The company had no way of safely disposing of it, so it just kept the drums in the warehouse.

“It wasn’t ever going to be bottled and wasn’t ever going to be sold,” Stone said.

However, when a foreclosure case was filed against the building’s owner, a receiver for the property obtained a court order requiring Liquor Group to remove the drums from the warehouse.

Eiras said he complied with the order and transported the drums to another location. However, someone reported the move to the Florida Division of Alcoholic Beverages and Tobacco, which determined that he was evading excise taxes.

Eiras said he was confident he would be exonerated and would not consider pleading guilty to lesser charges.

“We were unflinching the whole time,” he said.

Assistant State Attorney Daniel Skinner filed a disposition notice with the Clerk of the Circuit Court on April 28 saying “after reviewing the evidence,” he “declines to prosecute this defendant for these charges and any civil charges.”

Eiras praised the State Attorney’s office for being thorough in its investigation.

“The State Attorney was very evenhanded with it,” he said.

Meanwhile, Eiras resigned from North American Beverage and the bankruptcy case is in limbo.

The company filed a reorganization plan in February but that plan has been withdrawn by its current management.

“They haven’t decided what path they want to proceed with at this point,” Burgess said.

The disclosure statement filed with the reorganization plan said “as it turns out, the biggest asset of the company may actually be the Debtor’s CIK code, Central Index Key Code, which allows it to be publicly traded on the stock exchange.”

That would allow another business to go public by merging with the basically dormant North American Food & Beverage.

The disclosure statement said the company was “approached by a large private oil company interested in going public,” which would have issued stock to both creditors and stockholders of North American Food & Beverage. However, that deal has been dropped, Burgess said.

Eiras said he is working to rebuild his liquor distribution business separately from North American Food & Beverage. Because of his arrest, laws in 30 of the states where Liquor Group operated prohibited him from renewing his license, even though he was never convicted of a crime, he said. Eiras said he is currently licensed to distribute alcohol only in Michigan and Iowa.

“At the end of the day, I’m just trying to rebuild,” he said. “I will work diligently to rebuild and get back what has been taken from me.”

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