WSJ Article: Auctioneer, Consignor Sued for Selling Fake Wine

I thought this article was interesting. Allegedly, an entrepreneur knowingly sold fake rare French wine at a Zachy's auction. I'd hate to be holding the bag on a $33,000 bottle that wasn't what it purports to be. Although, considering that I'll never own a $33,000 bottle of wine (or anything remotely close to that), I guess I'll just have to imagine what it would be like.

From the article:
"[. . .] in a single Zachys auction on Oct. 28, 2005, he spent $3.7 million -- in some cases, as much as $33,000 a bottle -- for what he believed to be extremely rare vintages of Bordeaux. He later discovered that many of the bottles were counterfeit [. . .]"

Full article available here: http://online.wsj.com/article/SB119371362692575983.html?mod=home_law_middle

Unfortunately, the whole WSJ article is only available to subscribers.

My own opinion is, a pox on all of their houses. Anyone willing to pay that sort of price for a mere food beverage is asking to be taken to the cleaners by charlatans. They get no sympathy from me when that actually happens.

If the consignor were a real connoisseur, he'd have been DRINKING that wine, not selling it.

-Paul W.

Hell, I wouldn' pay $33,000 for a CAR, much less anything consumable!

Paul, Koch has posted the entire article on his new site at

http://was.fcm-rsh.com/was/

Click on the "News" button. Things are a little clunky at the moment; they issued the press releases before debugging the site.

But the article link worked a few minutes ago.

Regards, Bob

Paul, Koch has posted the entire article on his new site at

http://was.fcm-rsh.com/was/

Click on the "News" button. Things are a little clunky at the moment; they issued the press releases before debugging the site.

But the article link worked a few minutes ago.

Regards, Bob

I just tried it, and it's merely a link to the WSJ site, which requires paid login to read the full article. Oh, well. I don't really HAVE to read the full article.

If you're not buying such a wine with the intention of drinking it, then IMO you deserve what you get if it turns out to be fake. In this case, this rule seems to apply to both the seller and the purchaser at auction, both of whom seem to have been taken in by a fraudster.

As I said, a pox on all of their houses, most especially the person who perpetrated the fraud.

-Paul W.

Sorry for all who can't read the article. I don't think I can just copy the entire article without copyright issues, but really, the only other points that would complete the story are:

-"Mr. Koch's suit is the latest salvo in a legal crusade he has started to expose counterfeiting in the industry." Because of his efforts and others, many top producers have started to turn to new technologies to prevent such fraud.

-The buyer doesn't allege that Zachy's knew they were counterfeit, but is including them in the lawsuit to hold them and the retailer responsible for selling the wines (I suppose he is alleging that they had a duty to take further measures to ensure they weren't fake, or negligence, etc)

-out of the $3.7 million, $340,000 was counterfeit.

-The plaintiff is the same person who sued a German national as the source of selling numerous counterfeit wines in London and the U.S., including some 18th century wines, some of which were purportedly owned by Thomas Jefferson (case still pending)

Another article at Decanter site:

http://www.decanter.com/news/152804.html

Interesting that last weekend's "Golden Cellar" at Acker was Greenberg. And that Greenberg had gotten compensation for some fake bottles (I hope not same ones!) before.

Sorry, I guess as a subscriber to the WSJ, I couldn't see that. A weakness of the site.

I'll PM it to you, Paul, and anyone who asks for it.

-"Mr. Koch's suit is the latest salvo in a legal crusade he has started to expose counterfeiting in the industry." Because of his efforts and others, many top producers have started to turn to new technologies to prevent such fraud.

The result--measures to prevent fraud--is laudable. One wonders, however, whether Mr. Koch is just a crank on, as stated in the article, "a legal crusade".

-The buyer doesn't allege that Zachy's knew they were counterfeit, but is including them in the lawsuit to hold them and the retailer responsible for selling the wines (I suppose he is alleging that they had a duty to take further measures to ensure they weren't fake, or negligence, etc)

One would think that a wine auctioneer or merchant would take reasonable and prudent measures to prevent fraud.

-out of the $3.7 million, $340,000 was counterfeit.

This is rather telling. Based on monetary value, that percentage is about what one might expect to lose due to bottles being corked or otherwise bad. A slightly less than 1:10 ratio of bad bottles isn't unheard of in old fine wine, even if the provenance is beyond question. So, from a tort case standpoint, I have to ask where the actual loss is, even if there IS fraud involved.

The case could go either way, IMO. Depends on who's got the more persuasive lawyer.

Again, my first question if buying at auction is, "why is the other party selling this stuff and not drinking it themselves?" There are many good answers to this question. "They want to make money off it" isn't one of them. If that's the answer, I'd want to taste before buying, if that's possible.

-Paul W.


-The plaintiff is the same person who sued a German national as the source of selling numerous counterfeit wines in London and the U.S., including some 18th century wines, some of which were purportedly owned by Thomas Jefferson (case still pending)[/quote]

-out of the $3.7 million, $340,000 was counterfeit.

This is rather telling. Based on monetary value, that percentage is about what one might expect to lose due to bottles being corked or otherwise bad. A slightly less than 1:10 ratio of bad bottles isn't unheard of in old fine wine, even if the provenance is beyond question. So, from a tort case standpoint, I have to ask where the actual loss is, even if there IS fraud involved.

Paul, this is a strange argument. 10% of the wines not being what they were sold as certainly won't prevent the other 90% from having a cork or other taint. Can I come take 5% of your cellar, since you expect close to 10% to be bad anyway?

I found the suit interesting reading. Seems the earlier reports were wrong, it was Ms. Sutcliffe from Sotheby's who had told Greenberg he had a lot of fakes.
The complaint:
http://www.scribd.com/doc/452289/Koch-vs-Greenberg

http://www.scribd.com/doc/452289/Koch-vs-Greenberg

Greenberg strikes me as just a "wine flipper" who buys wine as in investment to sell later on at a profit. As opposed to someone who buys wine to cellar fully intending to drink it later, but then having to sell it off later.

If he's just an investor, than there's some poetic justice in his being burned by fraud, IMO. The wine investor scum do nothing but drive prices up for those of us who actually want to DRINK (gasp!) the stuff.

The fraudsters themselves are even worse. I suppose at this point it will be almost impossible to bring them to justice. But there is a special hell reserved for them. It probably involves force-feeding of Ripple and sauvignon blanc.

-Paul W.