Inside the downfall, FBI raid of NYC’s Sherry-Lehmann wine store

Michael Aaron is heartbroken over the shocking downfall of the iconic Park Avenue wine store his bootlegger father started back in 1934 — but he’s not surprised.

“The adult was gone and it was time for the children to play,” he said of his own exit and turning over the keys to new partners.

The once-respected name Sherry-Lehmann — long known as New York City’s premiere wine seller — has been smeared in mud after being shut down in March following a failure to renew its liquor license led to a cease-and-desist order from the State Liquor Authority.

The shop owes New York State some $2.76 million in back taxes.

The shop, now owned by Shyda Gilmer and Kris Green, stands accused of scamming by customers.

And last week, the FBI raided both the shuttered shop and an underground, climate-controlled room at a suburban office park in search of rare bottles that may have been stashed away.

Aaron, who sold his ownership stake back to the company in 2008, maintained that the grapes went sour “almost from the day I retired in 2008. They started reinventing the wheel and changing the whole philosophy of a company that had been successful for 75 years,” said the 83-year-old, who remembers being a boy and playing on the floor of the shop as customers — who included Mick Jagger, Andy Warhol and Greta Garbo — buzzed through to score top-notch hootch.

Reflecting on the environment after he left, Aaron said: “My philosophy was that our most important assets were our customers and our suppliers. Two days after I left, the owner of a very large distributor phoned me and said that calls were not being returned.”

A source associated with the shop told The Post, “The general attitude was that they would return the calls they felt like returning.”

Checks to suppliers are said to have bounced and the once jam-packed shelves had become all but barren, raising the ire of longtime customers.

According to a source associated with the shop, Green and Gilmer had no problem spending lavishly — as when Gilmer attempted to open a California branch of Sherry-Lehmann, which turned out to be a costly failure.

“He stayed at one of the most expensive hotels in LA,” the shop source told The Post.

There are even allegations of the owners drinking from Sherry’s top-shelf supply. As a former employee told The Post last December, “When your staff sees you walking out the door with two magnums of Champagne and Burgundy every day, that doesn’t send a good message.”

In December, two wine-loving customers sued the shop, claiming to have not received delivery on $800,000 worth of bottles. The lawsuit is ongoing.

“The story is kind of crazy in light of who they are,” Daniel Posner, owner of Grapes The  Wine Company, a fine-wine retailer in White Plains, told The Post. “Sherry-Lehmann is iconic. It used to be that you went to Bordeaux [France], told them you were from New York and they instantly asked if you worked for Sherry-Lehmann. This is a black eye on the industry. If consumers can’t trust a store like Sherry Lehman with their money, how can they trust a smaller store like mine?”

Gilmer claimed to the New York Times that he and Green never kept customers’ money without delivering the goods. But the writer of that story, James Stewart, insisted in his article that he finds himself out $400 on a case of wine paid for and never received. A spokesman, at the time, blamed it on Stewart moving to a new address.

All of this has left Michael Aaron, the last descendant of Jack the bootlegger to captain the shop, shattered. “If the allegations are true, then it’s obvious that I am very upset at how everything turned out,” he told The Post. “I thought that Kris Green purchasing Sherry Lehman stock would be an important infusion that would keep my wonderful company running for another 50 years.”

The shop source added that, under Gilmer’s stewardship, “They bought pricey rosé in large format bottles that were never advertised on the web. The rosé just sat there. They bought wines that they did not try to sell.”

But oh, how Sherry-Lehmann used to sell. In 1947, the shop introduced New Yorkers to Dom Pérignon Champagne. During the 1960s, it was the place to go if you wanted to splurge on a bottle of hard-to-find Petrus from Bordeaux.

During the 1980s, Sherry was a key outlet for New Yorkers wanting to invest in wine futures — buying wine in advance, while it was still aging and not yet for sale through general retailers. One oenophile told The Post that he spent $600 for a case of immature Mouton Rothschild at Sherry-Lehmann in 1982 and sold it two years later for $1,000.

By the 1990s, Sherry-Lehmann was still a family-owned shop and overseen by Aaron who wanted to do right by his ancestors. Gilmer, said to be a charismatic wine lover, was initially hired to help out on the sale floor in the mid-1990s, for the Christmas rush. By the decade’s end, he was made partner.

“Shyda had a perfect personality for selling wine,” marveled Aaron. “Customers loved talking to him. He was passionate about wine.”

Investor Kris Green shared the passion. Around 2007, when Green was still a customer, Aaron recalled, “I had the pleasure of spending several days in the Champagne region with him, visiting Krug. It was a hell of a trip. Needless to say, I was very impressed with what he had accomplished in his past profession as well as his incredible knowledge of wine.

Prior to Green’s arrival, added Aaron, “The year after my retirement, volume started falling.”

The power and the wine, some speculate, may have gone to Gilmer’s head. Shop employees have described Gilmer regularly patronizing tony eateries such as Nobu 57 and La Goulue. “We used to joke that Nobu 57 was [Gilmer’s] office from 11 a.m. to 11 p.m.,” a former executive told The Post in December.

He is said to have had a habit of encouraging reps from wine companies to pitch their goods over pricy meals.

“I always heard from suppliers that Shyda only met them at restaurants,” said Posner. “If you wanted to meet with him, it would be at lunch, with the rep picking up the tab. It’s common to get those kinds of offers in the industry, but I find it excessive for how I do business. I prefer to have those conversations in the office.”

Green, a former hedge-fund executive and a wine lover, came in as an investor in 2013. Aaron had already retired by then, and the store was struggling under its current leadership; Green’s cash infusion of several million dollars was necessary.

“I was hoping he would turn Sherry Lehmann around after my five-year absence,” Aaron said. “I thought Kris would be on top of [Gilmer and then CEO Chris Adams, a third partner at the time who is no longer with Sherry-Lehmann] to make sure they did their jobs. But he joined the boys. He and Shyda became attached at the hip. For the last 15 years, what went on makes no sense to me. I resigned from the board in 2014 out of frustration. Sherry-Lehmann bought back my remaining shares.”

According to the shop source, “Approximately $2.5 million remains unpaid to Michael Aaron.”

In a call to Sherry-Lehmann’s last known publicist, The Post was told, “We don’t represent them anymore” and that the relationship ended “earlier this month.”

Green and Gilmer did not return calls for comment.

“What they did to the company is more harmful to me than the likelihood that I will never get back the sums of money Sherry-Lehmann owes me,” Aaron said. “The betrayal of loyal customers is the worst.”