New Jersey Division of ABC Charges
NJ Liquor Law Attorney
One of the most frequently charged violations under New Jersey’s liquor laws is that of “Undisclosed Interest” (also referred to as a UI). This charge falls under N.J.S.A. 33:1-25 of New Jersey’s Alcoholic Beverage Control Act. Typically, these charges are filed by the New Jersey Division of Alcoholic Beverage Control as a result of a compliance inspection, though municipal licensing boards may also file these charges. If the ABC Detectives or Investigators find discrepancies in your books of accounting, they may refer the matter to a line Deputy Attorney General for formal charges. Depending on whether or not the “Undisclosed Interest” would otherwise be qualified, you could be facing anywhere from a 30-day suspension of your license up to a total Revocation. These charges should not be taken lightly.
ABC and liquor law in New Jersey is a unique and uncommon practice area for most attorneys. Without the expertise of an experienced ABC attorney, you will be risking your license and possibly your livelihood. Contact the ABC and liquor law attorneys at Proetta, Oliver & Fay by calling 732.858.5857. William C. Fay, IV, a partner at the firm, is a former Deputy Attorney General with the New Jersey Division of Alcoholic Beverage Control. Having handled hundreds of ABC-related cases, Mr. Fay can offer the expertise necessary to protect your liquor license. Call today and set up your initial consultation.
What is an Undisclosed Interest in a NJ Liquor License?
One of the most frequently charged violations under New Jersey’s liquor laws is that of “Undisclosed Interest” (also referred to as a UI). There are six (6) types of Undisclosed Interest charges with four (4) corresponding statutes. They are as follows:
Undisclosed Interest or UI1:
- This charge falls under N.J.S.A. 33:1-25 of New Jersey’s Alcoholic Beverage Control Act. This is the standard and most common charge for an Undisclosed Interest under NJ ABC law. Specifically, the charges will state that the licensee “failed to show or disclose on their license application (long form, short form renewal or amendment) that person or entity, that would have been qualified (not criminal disqualified or otherwise), had a direct or indirect interest in the license.” The presumptive penalty for this violation is a 30-day suspension.
Undisclosed Interest or UI2:
- Alternatively, under N.J.S.A. 33:1-26, a liquor license may be charged with Undisclosed Interest (UI2) if “a licensee fails to disclose on their license application or amendment that a person, had a direct or indirect interest in the license and that person was otherwise disqualified.” The “disqualification” under this statute is enforced against those individuals with a criminal record. Without a Disqualification Removal from the Director fo ABC, an individual is a criminal record involving a crime of “moral turpitude”, a person may not hold a direct or indirect interest in a licensed establishment. If your license is charged under N.J.S.A. 33:1-26, for having an Undisclosed Interest, you are facing a presumptive penalty of Revocation.
- Additionally, under N.J.S.A. 33:1-26, you may be charged with a misdemeanor offense for a violation of this statute.
Undisclosed Interest or UI3:
- Under N.J.S.A. 33:1-12.31, a plenary retail liquor license may also be charged with having an Undisclosed Interest (UI3) if the “licensee fails to disclose on their license application or amendment that a person, had a direct or indirect interest in the license and the undisclosed party already possessing a beneficial interest in two (2) other alcoholic beverage retail licenses.” New Jersey ABC law prohibits an individual or entity from having an interest in more than two (2) retail liquor licenses. The exceptions to this limitation are as follows:
- A restaurant
- A hotel with at least 50 sleeping rooms
- A bowling facility of at least 20 lanes
- An international airport
Though none of these exceptions may suffer the sale of “package goods”. In practice, this means that you may not possess an interest in more than two retail distribution licenses under NJ ABC law. The presumptive penalty for this charge is Revocation of your liquor license.
Undisclosed Interest or UI4:
- This charge mimics the previously described charge of UI2. Here, under N.J.S.A. 33:1-26, a liquor license may be charged with Undisclosed Interest (UI4) if “in your license application or amendment to a license application, you failed to sow or disclose that a person directly involved, or employed by a person directly involved, in the manufacturing or wholesaling of alcoholic beverages and therefore disqualified from having an interest in a liquor license, had an interest, directly or indirectly, in the license applied for or in the business conducted.” This charge was created as a result of previous litigation by the Division of Alcoholic Beverage Control against wholesale solicitors. The purpose of this charge is to prevent solicitors from using familial relationships (husband, child, parent or otherwise) to obtain business with retail licensees. Specifically, if your direct family member has an interest in retail liquor license, you will not be permitted to act as a solicitor between them and a wholesaler. For more information on solicitor permits, undisclosed interest charges and wholesaler licenses, contact our firm.
- If your license is charged under N.J.S.A. 33:1-26, for having an Undisclosed Interest, you are facing a presumptive penalty of Revocation.
- Additionally, under N.J.S.A. 33:1-26, you may be charged with a misdemeanor offense for a violation of this statute.
Undisclosed Interest or UI5:
- There are restrictions on law enforcement officers and officials regarding ownership of or employment at liquor licenses. Pursuant to N.J.A.C. 13:2-23.31, “no licensee shall be held by any regular police officer, any peace officer or any other person whose powers or duties include the enforcement of alcoholic beverage law or regulations, or by any profit corporation or association in which any such officer or person is interested, directly or indirectly.” There are methods by which a police officer may be employed as a “bouncer” or bartender at a retail liquor license establishment. However, there are restrictions and approvals that musts first be obtained. Contact our office for information on how this may be done.
- If your license is charged under N.J.A.C. 13:2-23.31, for having an Undisclosed Interest, you are facing a presumptive penalty of Revocation.
Undisclosed Interest or UI6:
- This charge is similar to UI4 and UI2, in that it prohibits undisclosed interests involving a retail liquor license and either a manufacturer or wholesaler’s license. However, here under N.J.S.A. 33:1-26, the prohibited conduct is where “a licensee fails to disclose that a distillery, brewery, winery, rectifier, blender or wholesale licensee had an interest in the license or business to be conducted under said license.” This is based on New Jersey’s 3-tier system (manufacturer, wholesaler and retailer) that prohibits individuals from having interests in multiple “tiers”.
- If your license is charged under N.J.S.A. 33:1-26, for having an Undisclosed Interest, you are facing a presumptive penalty of Revocation.
New Jersey ABC Lawyer
Charges for having an Undisclosed Interest are not a simple matter in New Jersey. They typically require that the Division of ABC prove a paper trail documenting the supposed “interest”. Depending on what statements were made and what the bank records/cancelled checks demonstrate, we may be able to refute ABC’s case. Furthermore, if you have received a Demand For Testimony, Demand for Documents or 7-day Notice, this means that the ABC is likely pursuing charges for an Undisclosed Interest in your license. While you may be required to comply with these demands, it is imperative that you obtain representation to navigate the potential pitfalls. Do not go into these statements alone. Mr. Fay has the unique qualifications of prosecuting Undisclosed Interest cases and taking statements from licensees on behalf of the New Jersey Division of Alcoholic Beverage Control during his tenure as a Deputy Attorney General. Allow him to put his skills and knowledge to work for you and call our firm today.
