Time to clean up your act...

Wines sold as rare may be fake
Federal prosecutors and FBI's art-fraud unit look into alleged fraud in the sale of bogus bottles, newspaper says.
March 6 2007: 8:06 AM EST

NEW YORK (CNNMoney.com) -- Federal prosecutors looking into allegations of counterfeit wine sales have sent subpoenas to rare-wine collectors and to some of the world's leading auction houses, including Christie's in London and Zachys in New York, according to a published report.

The Wall Street Journal reports that the art-fraud unit of the Federal Bureau of Investigation also is involved in the probe and has conducted interviews.

The paper reports that if the auction houses, collectors or importers knowingly sold counterfeit wines even when they had doubts about their authenticity, those sales could be prosecuted under federal fraud statutes.

Officials at the auction houses told the paper they go to great lengths to ensure the authenticity of the bottles they sell.

"We piece together the history of each bottle of wine, its provenance, ownership and appearance," Richard Brierley, wine auctioneer at Christie's, told the Journal.

The rise in prices has increased the incentive of some to try to sell counterfeit wines, he said.

"In the past, it was only the most rare vintages. But with more wines falling into the $1,000-plus category, there is more opportunity in counterfeiting," he told the paper.

The paper reports whether auction houses and merchants can be held liable for counterfeits provided to them by others could be a big issue in any prosecution arising from the federal probe.

William Koch, president of closely held Oxbow Corp., has also brought civil suits alleging that a German wine merchant, Hardy Rodenstock, forged bottles of wine he claimed had belonged to Thomas Jefferson. The paper reports that Rodenstock denied the claims and deflected responsibility to the merchants who sold them directly to Koch.

Clean up my act? You must have mistaken me for somebody else. I've never sold anything worth more than $500.

More from the Wall Street Journal:

Oenophiles See Double

My colleague John Wilke broke the news this morning that federal prosecutors are investigating counterfeit wine sales.

According to the article, wine auctioneers Christie’s and Zachys have been sent subpoenas, along with others. Investigators are looking into whether auction houses, collectors or importers sold counterfeit wines despite doubts about vintages’ authenticity.

The investigation was probably sparked in part by billionaire and collector Bill Koch’s battle with German wine seller Hardy Rodenstock, who Mr. Koch charges forged bottles of wine allegedly owned by Thomas Jefferson and Czar Nicholas II. (See Wilke’s fascinating article about the dispute from last September.)

Wine counterfeiting has proliferated because of the wine boom that’s sent prices for many vintage wines well past $1,000 per bottle. One expert estimates 5% of rare vintages sold today may be fake. Since creating fake wine is relatively easy — especially with very old bottles, as labels are easy to forge — the business has become highly profitable. And it’s very difficult for wine experts to sniff out fakes, since counterfeiters have become increasingly sophisticated, using syringes to inject new wine into old bottles and elaborate label-printing technology.

How can oenophiles avoid fakes?

Stephen Bachmann, the CEO of Vinfolio, an online wine store and collector-service company, says buyers should follow three rules:

1. Avoid the rich stuff. Mr. Bachmann says counterfeiters typically target bottles that sell for $1,000 or more. So he recommends buying slightly lower-priced wine: “There are plenty of great wines for less than $1,000.” He also says he avoids selling bottles that are older than 1960 or 1961, since they have a higher risk of being bad or turning out to be fakes.

2. Check the labels. Sometimes a cursory check of the label’s history can uncover frauds. He said he recently discovered a fake 1990 Rayas that had a 1991-type label in one of his customers’ cellars.

3. Buy originals. If you’re determined to buy vintage, try to buy directly from the winemaker, or from collectors who were the original buyers. “Try to understand the chain of provenance,” he says. “You want to buy from the chateaux or from the guy who’s had it in his cellar from the beginning. You want to avoid wine that’s been traded a lot.”

Robert Bohr, the wine director at the restaurant Cru in New York, adds that the most-important lesson for wine buyers is to avoid deals that sound too good to be true.

“People want it to believe that they’re going to get that 1947 Petrus magnum for $20,000, and it’s in mint condition with no seepage,” he says. “They want to be the hero who comes to the dinner party and has that bottle of wine that nobody else has. They want to believe the dream. But oftentimes, it’s not true. They open it up and I’m the one who has to tell them that their ‘47 Petrus tastes more like a 1975 Australian Shiraz. It happens more than I would like.”

“There are plenty of great wines for less than $1,000.”