Independents

Former Employees File New Lawsuit Against CD Peacock

IndependentsApr 06, 2022

Former Employees File New Lawsuit Against CD Peacock

Like the previous suit, it accuses the jeweler of conspiring to sell Rolex watches on the gray market and firing whistleblowers.

In a new lawsuit filed against C.D. Peacock, former employees have again accused the Chicago-area jeweler of conspiring to sell Rolex watches to gray market resellers and firing those who blew the whistle on the alleged scheme. (Image courtesy of C.D. Peacock’s website)
Chicago—A new lawsuit was filed against Chicago-area jeweler C.D. Peacock last month as part of an ongoing dispute with former employees.

In the suit, Olga Nelson, Suzana Krajisnik, and Giuseppe Di Lorenzo accuse the retailer and some of its employees of conspiring to sell Rolex watches to gray market resellers overseas and firing them for blowing the whistle on their activities.

Previously, Krajisnik filed a lawsuit against C.D. Peacock owner Seymour Holtzman and four of his employees in federal court in Illinois in February 2021, but the case was dismissed without prejudice in April.

In the initial lawsuit, Krajisnik claimed she was fired for being a whistleblower on the alleged conspiracy.

The suit included the names of two other terminated C.D. Peacock employees who also believe they were fired for notifying management of the situation and refusing to participate.

The new lawsuit, filed March 23 in the Circuit Court of Cook County in Illinois, reiterates these same claims and adds the two employees, Nelson and Di Lorenzo, as plaintiffs.

The defendants include C.D. Peacock, its location in the Old Orchard Mall, and Holtzman, who has since transferred ownership of the retailer to son Steven Holtzman.

Staffing and payroll company ADP and Tandem Professional Services have been added as defendants for their alleged roles in the firing of at least one of the former employees.

Illinois law allows for “respondents in discovery” to be named as well.  These respondents can be converted to defendants.

The respondents are Rolex Watch U.S.A. and Chad Adams, a Rolex regional sales representative, as well as former CDP CEO Robert Baumgardner, employee Yingxue Duan, and store managers Christopher Croteau and Dyol Hill.

While it is not illegal to violate Rolex policies or to sell watches on the gray market, the lawsuit claims the defendants violated numerous federal and state laws, including money laundering, mail fraud, wire fraud, immigration fraud, credit card fraud, and federal income tax evasion.

“Our clients allege they were fired from C.D. Peacock after they refused to take part in a far-reaching scheme that involved a litany of illegal activities committed in order to profit by getting this merchandise into the hands of foreign gray market resellers,” said Haskell Garfinkel of Garfinkel Group LLC, whose firm is one of two representing the plaintiffs.

The complaint outlines several instances of Duan allegedly engaging in illegal behavior and violating store and Rolex policies and details an alleged scheme by C.D. Peacock to sell Rolex watches directly into the Asian market.

Di Lorenzo, the former Rolex manager of C.D. Peacock’s store in the Old Orchard Mall, claims in the suit that Duan was “making remote sales of Rolex products, on the phone and online, to heretofore unknown customers,” and “regularly engaging in forging signatures on credit card receipts” to sign for customers who had never visited the store.  

Multiple watches also were being shipped out of state at one time to avoid sales taxes, also violating C.D. Peacock and Rolex policies, the suit alleges.

Krajisnik claimed in the suit that she friended Duan on Facebook and noticed she was posting Rolex products for sale in foreign countries, including on pages for jewelry resellers. 

The suit shares details of Duan’s public social media posts, translated from Mandarin into English, in which she is allegedly negotiating Rolex sales with customers.

In one she wrote, “Official price is $75,000. If you are interested, I can take more pictures,” and, “I can ask my boss and then apply for a discount. I work at an authorized Rolex dealer.”

In another conversation, Duan allegedly said, “If you need detailed pictures with detail, I can take it for you. I work at [an] overseas authorized Rolex authorized dealer. Shipped directly from the store with stickers.”

The lawsuit also details a meeting former CEO Baumgardner had in September 2019 with Adams, the Rolex regional sales rep, to “discuss material violations of the distribution agreement, including but not limited to Rolex’s uncovering of the prohibited sale and ‘gray market’ resale of products online by Duan and defendants.”

After this meeting, Baumgardner allegedly released a memo to management-level employees, reiterating the company’s commitment to Rolex’s sales policies.

 Related stories will be right here … 

According to the lawsuit, the former employees shared the above details with management, including Holtzman, Baumgardner and store managers Croteau and Hill.

After speaking with management, the employees were fired in retaliation, said the suit, adding “the basis of their firings was false and pretextual.”

As per the filing, Nelson claimed she was falsely accused of, and fired for, sexual harassment after saying a member of management she believed to be complicit in the alleged scheme was “in bed” with an employee.

Krajisnik was said to be fired for poor sales numbers, though she claimed her low numbers were the result of Rolex sales being given to Duan.

Di Lorenzo was fired because he extended credit to a customer whose driver’s license was set to expire a few months after the transaction, as per court documents.

In a statement to National Jeweler, a C.D. Peacock spokesperson described the employees as “disgruntled” and said they were terminated for cause.

“The case was previously brought by one of these employees a year ago in federal court and then immediately abandoned when early rulings went against her in that action,” the retailer said.

“CDP intends to vigorously defend this action, as it did the previous one.”

Another well-known luxury watch brand, Patek Philippe, was mentioned in the original complaint. The new lawsuit, however, does not include Patek Philippe.

As of Jan. 31, C.D. Peacock ended its 30-year partnership with Patek Philippe, a C.D. Peacock spokesperson confirmed to National Jeweler.

“Demand from our customers exceeds availability which, in turn, creates disappointment when we are not able to fill all client requests,” the company said. “We continue to explore partnerships with luxury brands that we will announce this year because satisfying our distinguished collectors remains a priority.”

C.D. Peacock was founded in Chicago in 1837, making it one of the city’s oldest retailers, and has three locations in Illinois, with a new flagship in the works.

Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

Recorded WebinarsMay 27, 2022
Watch: The 5 Things I Always Take to a Trade Show

Editor-in-Chief Michelle Graff is joined by three industry veterans to talk about the items they never leave behind and why.

CollectionsMay 27, 2022
92Y Has Selected its 2022 Artist in Residence

German jewelry artist Alexander Blank is the fourth designer to receive the honor.

CollectionsMay 27, 2022
Piece of the Week: Which Movie Inspired This Chopard Masterpiece?

The answer is “Hair,” and the necklace is from Chopard’s 2022 Red Carpet Collection, rolled out at the Cannes Film Festival.

Brought to you by
3 Reasons to Offer Estate Buying at Your Store

Provide your customers with a seamless selling solution by partnering with Windsor Jewelers, Inc.

Supplier BulletinMay 26, 2022
Extraordinary Italian Jewelry at JCK and COUTURE

Sponsored by Italian Trade Agency

Weekly QuizMay 26, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
SourcingMay 26, 2022
Q&A: Deciphering De Beers’ Blockchain Platform

David Prager virtually sat down with Editor-in-Chief Michelle Graff to answer questions about the rollout of Tracr at scale.

AuctionsMay 26, 2022
Bonhams New York Jewels Auction Is a White Glove Sale

Jewelry and objects belonging to Bette Midler, heiress Hélène Irwin Crocker Fagan, and Lady Sylvia Ashley were among the highlights.

Brought to you by
Dive into GIA’s Pearl Expertise

When it comes to knowing the identity and quality of your pearls, count on GIA as your independent pearl experts.

FinancialsMay 26, 2022
Movado Posts Record Q1 Sales Despite ‘Challenging’ US Market

The company opted not to raise its fiscal guidance, citing a slowdown in the U.S. market as a key reason.

TechnologyMay 26, 2022
State of Retail: The Pros and Cons of 4 Jewelry-Selling Platforms

From “old-school” eBay to new kid on the block 1stDibs, we asked jewelers about their experiences selling jewelry in non-traditional places.

Policies & IssuesMay 26, 2022
Barbara Wheat Named Executive Director of Ethical Metalsmiths

She has nearly 30 years’ experience in the gem and jewelry industry and a background in nonprofit management.

EditorsMay 25, 2022
7 Standout Tiaras in Sotheby’s Platinum Jubilee Exhibition

Senior Editor Brecken Branstrator chooses the pieces she’d most want to see in person.

MajorsMay 25, 2022
Anne Hathaway Is Bulgari’s Newest Ambassador

The actress joins Zendaya and others in a new advertising campaign.

IndependentsMay 25, 2022
MVEye, Wedding Report Partner on New Jewelry Research Platform

“Today’s Wedding Jewelry Consumer” shares data about engagement ring market size, lab-grown and natural diamonds, and more.

ColumnistsMay 24, 2022
The PR Adviser: 10 Questions to Contemplate

Columnist Lilian Raji wants to walk you through the customer journey. But first, she’d like you to answer a few questions.

Events & AwardsMay 24, 2022
8 Gold Jewelry Designers Unveil New Platinum Designs

Several Couture brands have partnered with Platinum Guild International ahead of the jewelry trade show.

Lab-GrownMay 24, 2022
Kendra Scott Unveils Lab-Grown Engagement Ring Collection

The jewelry company is moving into bridal just a month after branching out into the watch world.

SourcingMay 24, 2022
State of the Diamond Industry: Where Does Supply Go From Here?

The 2008 economic crisis, COVID-19, and sanctions on Russian goods have set the stage for an interesting decade for natural diamond supply.

Events & AwardsMay 24, 2022
WJA to Host Diversity Keynote at New Las Vegas Breakfast Event

The Generating Community Impact fundraiser on June 11 will feature Karine Bah Tahé of Blue Level Training.

WatchesMay 23, 2022
Steven Kaiser, Watch Industry Veteran and Beloved Mentor, Dies at 68

Kaiser, whose illustrious career spanned decades, died suddenly on Friday.

IndependentsMay 23, 2022
Long’s Jewelers to Open New Location

The family-owned jeweler is relocating its Braintree, Massachusetts, store to a new space.

IndependentsMay 23, 2022
Luxury Goods Veteran Olivier Stip Joins Chicago Jeweler CD Peacock

He will step into the retailer’s newly created role of chief development officer.

GradingMay 23, 2022
Gem-A Launches Digital Entry-Level Gemology Course

GemIntro is meant to give a broad introduction to gems and gemology.

Recorded WebinarsMay 20, 2022
Watch: Responsible Sourcing and the Gold Supply Chain

Three industry experts discuss “recycled” gold vs. mined, their challenges and benefits, and how jewelers can navigate the area.

FinancialsMay 20, 2022
Richemont’s 2022 Jewelry Sales in the Americas Nearly Double

Cartier, Van Cleef & Arpels, and Buccellati put on stellar performances.

AuctionsMay 20, 2022
Piece of the Week: ‘Birds in Flight’ by Oscar Heyman

The New York jeweler made this incredible, colorful Art Deco bracelet featuring tropical birds in 1927.

SurveysMay 19, 2022
5 Predictions for Jewelry Retail in the Second Half of 2022

From a slowdown in sales growth to rising costs, Fruchtman Marketing outlines its expectations for the second half of the year.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy