Could Premier Cru sale help wine counterfeiters?

Some of the hundreds of empty wine bottles that will be auctioned Saturday. Photo: Frances Dinkelspiel — Some of the hundreds of empty wine bottles that are due to be auctioned Saturday at the Berkeley headquarters of Premier Cru on University Avenue. Photo: Frances Dinkelspiel

An expert in wine counterfeiting is trying to put a stop to parts of the auction of the assets of Berkeley’s Premier Cru, concerned that the empty bottles and original wooden wine cases on sale could be used to flood the market with fake wines.

Don Cornwell, a Los Angeles attorney who said he worked with the FBI on the fraud case involving Premier Cru’s owner, John Fox, and who is well known in the anti-counterfeiting world, has reached out to Premier Cru’s bankruptcy trustee, the U.S. Trustee, the FBI and the auctioneer to stop the sale of hundreds of high-end empty wine bottles and crates. He started his campaign Thursday after reading Berkeleyside’s story on the auction of Premier Cru’s assets, set to happen at 11 a.m. Saturday.

“It is critically important that the empty bottles and empty wine boxes NOT be sold — particularly as to the oldest or rarest wines,” Cornwell wrote in an email to Dan Clar, whose Dan Clar Auctioneers is conducting the sale.

A wine counterfeit expert is concerned that the sale of 2,500 original wine crates at the Premier Cru auction could help those trying to create fake wine. Photo: Frances Dinkelspiel — A wine counterfeit expert is concerned that the sale of 2,500 original wine crates at the Premier Cru auction could help those trying to create fake wine. These are just some of the crates that will be auctioned Saturday. Photo: Frances Dinkelspiel

“These are precisely the types of materials that the wine counterfeiters seek to acquire,” wrote Cornwell. “It is exceptionally easy to produce a passable counterfeit of say a 1945 Chateau La Mission Haut Brion (one of the empties in [Berkeleyside’s] photograph in her article) if you can acquire an empty bottle with the original glass and original label. The counterfeiter then simply refills the bottle with something, inserts a cork (perhaps stamped with fake information to emulate the original or not), adds a capsule that’s been twisted off a legitimate bottle, and they’re in business — a fake wine that’s impossible to disprove except through either the capsule (if it’s not the right capsule for vintage range in question) or examining the cork to see if the printed content is correct (both of these require a lot of knowledge). Suddenly an empty bottle that your client might sell for $50 to $200 (and empties ONLY have high value for someone who wants to produce counterfeits from them — even on eBay, etc) is worth thousands to tens of thousands of dollars once it has been refilled.”

Cornwell then brought up the case of Rudy Kurniawan, the Indonesian man nicknamed “Dr. Conti,” because of his love of the rare wine, Domaine de la Romanée-Conti. Kurniawan was convicted in 2013 of selling around $10 million in fake wines and is currently serving a 10-year sentence for fraud. Kurniawan acquired numerous empty bottles of high-end French and American wines, filled them with fake blends, and sold them at auction.

Mark Bostick, the attorney for Premier Cru’s bankruptcy trustee, said Friday he had just learned about Cornwall’s concern. The bankruptcy trustee no longer has any control over the assets in Premier Cru’s headquarters at 1011 University Ave. because it was “abandoned” as part of the bankruptcy process, he said. The managing member of the LLC that owns the building has control, said Bostick. Regardless, Bostick planned to investigate, talk to other individuals involved and perhaps file documents about the sale in bankruptcy court, he said.

Clar, the auctioneer, said he did not think the sale of about 175 old bottles and 2,500 wooden wine crates was significant. If someone wanted to counterfeit wine, they can buy old bottles and boxes on eBay, he said. There are hundreds of those items for sale.

“They are for sale on the open market,” said Clar. “We would be putting a drop in the bucket out there.”

Clar added that there will be a record of whoever buys the bottles and boxes, which should discourage anything untoward. He said he thought artists and the like would be the people who would buy the crates.

Cornwell said it is actually difficult to find old, empty European bottles for sale. They mostly pop up in Europe, and then only rarely.

“It is gut-wrenching for me to see this stuff go to auction,” Cornwell wrote in an email to Berkeleyside. “I’ve spent huge portions of the last eight years of my life working with the FBI and law enforcement to try to prevent and prosecute wine counterfeiting and wine crimes like the Premier Cru Ponzi scheme. The last thing in the world I would ever have expected was for the government, however inadvertently, to facilitate the wine counterfeiters by selling the then empty bottles of rare wines and OWCs (original wooden crates).”

Fox, the owner of Premier Cru, pleaded guilty to wire fraud in August and is scheduled to be sentenced on Dec. 14. As part of the plea, Fox acknowledged that he had sold at least $20 million in phantom wines to his customers and had spent $5 million on expensive cars, homes for his family, golf club memberships and for women he met online. Premier Cru had filed for bankruptcy in January.

Update: 4:45 p.m. Mark Bostick, the attorney representing the bankruptcy trustee, conferred with the attorney for the owner of Premier Cru assets. Both attorneys decided that the auction should continue. Bostick said there are wooden crates and old wine bottles available on the Internet, so selling them would not make it any easier for fraud to occur.

Update 12/5, 7:15 a.m.: The six lots of bottles sold for $20 to $50 each in the Saturday auction. In all, there were about 212 old bottles for sale. Most of them once contained high-quality French wine. The wooden wine crates sold for differing amounts, but for less than $100 a piece. The 11 French, medieval-type tapestries sold for $125 to $250 a piece. Nobody bid on John Fox’s executive desk and chair, although all his work-out equipment sold. The Reidel glasses went quickly, as did the decanters, corkscrews, and other wine paraphernalia. The auctioneer had less success selling off the wood wine shelves and display cases built especially for Premier Cru.

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Frances Dinkelspiel