50 Cent Tries Again on Appeal to Bring Fraud Claims Against Beam

Judges on New York’s intermediate appellate court Thursday questioned arguments from 50 Cent’s alcohol brand Sire Spirits about whether Jim Beam’s parent company Beam Suntory was part of a conspiracy to defraud Sire.

Sire sued Beam and two alleged co-conspirators—Michael and Gina Caruso—but a New York State trial court last year granted Beam’s motion to dismiss the conspiracy to commit fraud and aiding and abetting fraud claims again Beam, leading to Sire’s appeal. The fraud and unjust enrichment claims against Gina Caruso were also dismissed as part of the motion.

Sire says Michael Caruso acted on Beam’s behalf to help Sire expand and make connections in the alcohol industry in exchange for Curtis “50 Cent” Jackson promoting Beam’s vodka.

Caruso connected Sire with a liquor consultant, Mitchell Green, who oversaw a scheme where liquor suppliers charged Sire inflated prices and gave the Carusos kickbacks, Sire said.

Green allegedly negotiated secret fees that he built into the price of champagne and cognac liquid purchased from suppliers for Sire. Once Sire paid the supplier the artificially-inflated amount for the product, Green would allegedly invoice the supplier for the overpayment. The additional money was funneled back to Green, who then would dole out shares of the money to Caruso, Sire said.

Green pled guilty last year to federal wire fraud in a related case.

Justice Peter H. Moulton questioned if Beam could be held liable for Michael Caruso’s alleged conspiracy with Green. “It’s true the principal has to evince apparent authority, not the agent, correct?” he asked.

Sire attorney Eamon O’Kelly, of Blank Rome, said Caruso introduced Jackson to a Beam executive, but Moulton appeared unpersuaded that Beam held out Caruso as its agent.

“It seems a little vague to me,” the judge said, adding that Jackson “hired Mr. Caruso to be a go-between” between himself and Beam.

Beam attorney Steven Molo, of MoloLamken LLP, said Caruso wasn’t Beam’s agent, but judges questioned why Beam was paying Caruso. Molo said Caruso was paid as a Sire representative as part of Beam’s vodka-promotion agreement with Jackson, not as an employee of Beam.

“The payment of Caruso occurs because they modified the agreement between Sire and Beam to allow Caruso to perform certain duties for Sire,” Molo said.

Sire also argued on appeal that the trial court erred by dismissing all claims against Gina Caruso.

Paul J. Fishman, of Arnold & Porter, representing Gina and Michael Caruso said the trial court got it right. Fishman compared Gina Caruso to “a spouse who helps with paperwork,” and said Sire “didn’t even know she existed.”

Judges questioned Sire’s arguments that Gina Caruso should be held be liable for assisting her husband in the alleged conspiracy.

“It seemed to me your complaint is very attenuated concerning her role in all this and she was correctly dismissed,” Moulton said.

The case is Sire Spirits LLC v. Beam Suntory Inc., N.Y. App. Div., 1st Dep’t, oral argument 5/9/24.