Rao's exec used company cash to pay for jewelry, Italian trip; shredded docs: suit - New York Post
The family feud over red sauce at Rao’s just got spicier.
New court papers accuse the cousin who heads the famed eatery’s specialty-foods division of spending thousands in company cash on jewelry, a trip to Italy and a personal trainer.
The legendary Harlem restaurant, where it’s nearly impossible to get a table, expanded its reach in 1991 by peddling its famed sauce around the country. But it has been embroiled in strife since a July lawsuit was filed in Manhattan Supreme Court accusing a family member of treating the business like her “personal fiefdom.”
The court battle pits the nephews of founders Vincent and Ann Pellegrino Rao against each other. Frank Pellegrino claims Ron Straci and his wife, Sharon, have for years been cheating shareholders.
The original lawsuit was dropped in August, but now Rao’s Specialty Foods shareholders are accusing Sharon Straci in a new claim of treating the company like a “personal piggy bank.”
Frank Pellegrino Sr.Photo: Getty Images
Sharon Straci allegedly spent $2,689 at Tiffany’s in 2010, using the company’s American Express card; $19,000 to take her family to Italy in April 2014; $46,200 on a personal trainer; $57,000 for long-term-care insurance for herself and Ron; and $119,000 over five years on a vacant apartment, according to the suit filed last week by shareholders.
When Pellegrino and other shareholders learned Sharon rejected an offer to buy Rao’s and began looking closely at her work, they claim she swore to “destroy” the business.
Sharon Straci allegedly had her workers shred five Dumpsters worth of Rao’s Specialty Food documents, and delete 17,000 e-mails, some of which proved she was using Rao’s resources to develop her own rival tomato sauce. She also allegedly handed out bonuses to employees so they’d follow her out the door.
She even sought to trademark the phrase, “The Woman Behind the Sauce,” a slogan most closely associated with Ann Pellegrino Rao, who died in 1994.
The Stracis’ wrongdoing “ran deeper than they ever imagined,” shareholders allege, claiming Sharon diverted about $12 million to a Rao’s Italian supplier whom she wanted to work with, gave her husband’s law firm free office space, and paid him a salary even though he “failed to do even the basic corporate governance work required of a general counsel.”
Sharon also ignored a chance to get the sauce sold at Costco, claim the shareholders who are seeking unspecified damages.
A lawyer for the Stracis called the claims “baseless” but insisted both sides are “working on amicably resolving their differences.”
The 110-year-old restaurant has hosted everyone from Lucky Luciano and John Gotti to former Police Commissioner Bill Bratton, Tom Hanks and Ron Perelman.
