'Buyer beware', wine collectors in fraud probe say March 7, 2007
Howard G Goldberg in New York
Collectors are knowingly putting counterfeit wine up for auction, witnesses in the ongoing FBI investigation into wine fraud say.
The US Department of Justice is working with the FBI to gather evidence into allegations that counterfeit bottles are being sold. Zachys in New York and Christies in London are both cooperating with the authorities in their investigations.
Collectors William I Koch and Russell H Frye, who are helping federal authorities investigating wine counterfeiting and are both plaintiffs in counterfeiting cases, say 'Buyer beware' is the watchword when bidding at auction.
'I have had several experts in to examine the 35,000 bottles of wine in my cellar and have discovered many more fakes than were found earlier. We were contacted by the FBI and we turned over all of our information,' Koch said. 'Although we have not been served a subpoena, we have cooperated fully.
'Almost all of these bottles were purchased at auction. Some resellers are turning a blind eye to the provenance issue. It really is buyer beware.'
James F McCabe, a San Francisco lawyer representing Frye, said Frye had complied with a subpoena from a federal grand jury in New York City ordering him to turn over 'any and all documents concerning the purchase of wine believed to have been provided' by German dealer Hardy Rodenstock.
Rodenstock is being sued by Koch, who alleges that four bottles of Bordeaux he bought after Rodenstock attributed them to Thomas Jefferson are fakes.
Frye filed a civil suit in federal court in San Francisco last summer alleging that a merchant, the Wine Library of Petaluma, California, had sold him bogus wine 'obtained from Hardy Rodenstock'. The merchant generally disputes the claim.
Andrew M Crisses, Zachys' lawyer, in reply to the Wall Street Journal report that Zachys and Christie's have been subpoenaed, told decanter.com a federal attorney had sent Zachys a letter asking about any commercial dealings with Rodenstock. Zachys, he said, told the lawyer that it had not had any dealings. 'As far as Zachys is concerned, the investigation is over,' Crisses said.
Christie's said, 'Christie's will not sell any lot that we know or have reason to believe is inauthentic or counterfeit. We take all appropriate steps to establish authenticity. We have been cooperating with officials and will continue to do so. We will not be making any detailed comment while the matter is subject to legal proceedings.'
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