A New York jury on Thursday backed a US billionaire who complained that wines he bought costing thousands of dollars a bottle were phony.
Bill Koch, brother to the politically connected siblings who help fund the US conservative Tea Party movement, sued wealthy businessman Eric Greenberg over what he said was a bad batch of bottles in a $3.5 million purchase he made at auction.
The jury in federal court agreed and awarded him compensation, Koch’s lead attorney John Hueston told AFP.
“They awarded compensatory damages of approximately $355,000 and another $26,000 in additional damages for findings of willful misconduct,” Hueston said.
The legal battle started in 2007 following an auction in which Greenberg consigned part of his 70,000-bottle-strong cellar for sale. Koch bought 2,669 of the bottles.
They had extraordinary labels like a Chateau Latour 1928, worth $2,873, a Chateau Latour 1864, several Cheval Blanc 1921s, and a Chateau Petrus magnum from 1921 that was bought for $29,500.
Koch testified he’d been looking for “the best of the best,” and thought he was getting it. Some bottles were said to have come from “English royalty.”
But 24 bottles bought for $355,000 turned out to be fake, said Koch.
The scam of pouring cheap booze into prestigious bottles is an acknowledged problem in the wine world, with former major dealer Rudy Kurniawan set to go on criminal trial later this year in New York for allegedly running a fake wine factory in his home.
In a sign of the stakes in these rarified circles, Koch and Greenberg threw considerable legal resources at the trial.
Both men attended, each sitting flanked by half a dozen lawyers and assistants, while the jury handled evidence, including bottles of wine that the amateur might assume would cost a fortune — but could be worthless.
Greenberg’s lawyer in the civil trial in Manhattan, Arthur Shartsis, said Koch’s case was just sour grapes and that his own client had never knowingly served a legally questionable wine.
“Mr Greenberg didn’t believe those bottles were fake,” he said in his closing arguments to the jury. Shartsis sought to shift the blame from his client to the auction house Zachys.
“In the contract, Zachys had complete responsibility,” he said.
“Somebody made a mistake, that is not a fraud.”
Besides, the auction rules stated that wines were sold “as is,” meaning there was no guarantee, Shartsis said, adding that Koch could hardly have failed to know this.
But Hueston argued that Greenberg went ahead with his consignment to Zachys in full knowledge that the bottles included fakes — and in fact hoping that Koch would snap them up.
“Mr Greenberg knew it and he didn’t tell anybody,” Hueston told the jury. “He sold those bottles for top dollars.”
Kurniawan, once hailed as one of the world’s most influential rare wine dealers, has pleaded not guilty to his fraud charges and is tentatively scheduled to go to trial on September 9.
Working with collectors happy to spend tens of thousands of dollars on a single bottle of red, Kurniawan — also nicknamed “Dr Conti” and “Mr 47″ — amassed expensive contemporary artwork, Patek Philippe watches and a vehicle fleet that included a Lamborghini.
In reality, prosecutors say, from 2004 until February 2012, Kurniawan was busily mixing ordinary wines into bottles masquerading as rare vintages. The collectors he allegedly duped included Koch.