Former employees file new lawsuit against CD Peacock

Chicago—A new lawsuit was filed against Chicago-area jeweler CD Peacock last month in an ongoing dispute with former employees.

In the lawsuit, 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 dealers overseas and firing them for exposing their activities.

Previously, Krajisnik filed a lawsuit against CD 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 original lawsuit, Krajisnik claimed she was fired for being a whistleblower on the alleged plot.

The lawsuit included the names of two other terminated CD Peacock employees who also believe they were fired for informing management of the situation and refusing to participate.

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

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

Recruitment and payroll firm ADP and Tandem Professional Services were added as defendants for their alleged roles in the firing of at least one of the former employees.

Illinois law also permits the naming of “discovery respondents”. These respondents can be converted into defendants.

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

While it’s not illegal to violate Rolex policies or 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 revenue. tax evasion.

“Our customers allege that they were terminated from CD Peacock after refusing to participate in a wide-ranging scheme that involved a litany of illegal activities committed to profit by placing this merchandise in the hands of foreign dealers of the gray market,” Haskell said. Garfinkel of Garfinkel Group LLC, whose firm is one of two plaintiffs’ representatives.

The complaint outlines several instances where Duan allegedly engaged in illegal behavior and violated store and Rolex policies and details an alleged plan by CD Peacock to sell Rolex watches directly in the Asian market.

Di Lorenzo, the former Rolex manager of the CD Peacock’s store in the Old Orchard shopping mall, claims in the lawsuit that Duan “did distance selling of Rolex products, by telephone and online, to previously unknown customers” and “regularly indulged in the forge”. signatures on credit card receipts” to sign for customers who had never visited the store.

Several watches were also shipped out of state at the same time to avoid sales tax, also violating CD Peacock and Rolex policies, according to the lawsuit.

Krajisnik claimed in the lawsuit that she befriended Duan on Facebook and noticed her posting Rolex products for sale in foreign countries, including on jewelry dealer pages.

The lawsuit shares details of Duan’s public social media posts, translated from Mandarin to English, in which she allegedly negotiates Rolex sales with clients.

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

In another conversation, Duan allegedly said, “If you need detailed pictures with details, I can take them for you. I work in [an] authorized Rolex dealer abroad. Ships direct from store with stickers.

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

After that meeting, Baumgardner reportedly issued a memo to management employees, reiterating the company’s commitment to Rolex’s sales policies.

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, the lawsuit said, adding that “the basis for their dismissals was false and pretense.”

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

Krajisnik was reportedly fired for poor sales numbers, although she claimed her low numbers were the result of Duan being awarded Rolex sales.

Di Lorenzo was fired because he extended credit to a client whose driver’s license was due to expire a few months after the transaction, according to court documents.

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

“The case had already been brought by one of these employees a year ago in federal court and then immediately dropped when the first rulings were against her in this action,” the retailer said.

“The 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 January 31, CD Peacock has ended its 30-year partnership with Patek Philippe, a CD Peacock spokesperson confirmed to National Jeweler.

“Our customer demand exceeds availability, which, in turn, creates disappointment when we are unable to meet all customer demands,” the company said. “We continue to explore partnerships with luxury brands which we will announce this year as the satisfaction of our distinguished collectors remains a priority.”

CD 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 product in the works.

Jack L. Goldstein