The picture is still hanging in my office: Bill Koch, the energy executive who has made fighting sales of counterfeit rare wines a personal obsession, stares menacingly at me, wearing a cowboy hat, a bandana and a sheriff's star. The shot was taken when Wine Spectator photographed Koch for our Dec. 15, 2009, cover story, "The Crusade Against Counterfeits." The outfit was Koch's idea: In addition to wine, he collects Old West memorabilia.
In the end, we opted for a shot of Koch in a suit, holding a magnum of Château Pétrus 1921. Koch says he bought that bottle at a 2005 Zachys auction of 17,000 bottles of wine from the cellar of California tech entrepreneur Eric Greenberg. Koch alleges that Greenberg bought it from Royal Wine Merchants, and Royal sourced it from German wine broker Hardy Rodenstock. Koch believes it’s a fake.
That magnum, and all those players, are back in the headlines this week, as a jury of six men and two women hear Koch v. Greenberg in a Manhattan federal court. Koch has been suing Greenberg for six years over 24 bottles he bought for almost $350,000 at that auction, wines he says are counterfeit. (Contributor Peter Hellman, who has doggedly pursued this topic, has written an excellent summary of the case.)
Knowing Koch, that photo of him looking like Wyatt Earp is not far from how he sees himself. He has been pursuing legal action against collectors and auction houses for eight years now, spending millions of dollars on attorneys and private investigators, trying to uncover who is responsible for fakes in the auction market.
Some people find Koch an unsympathetic character. The founder and president of Oxbow Group, a Florida-based energy firm, Koch is worth about $4 billion—$470 million of it made in a settlement after a two-decade-long legal battle with his twin brother David and older brother Charles over the company their father founded. Yes, he sued his own twin. He also subpoenaed his own mother.
Beginning in 1985, Koch spent more than $12 million on 40,000 bottles of wine, buying big at auctions. He especially loved 19th century Bordeaux. This is behavior that auction experts equate with believing e-mails from "Nigerian princes" asking for financial help. Some wine lovers have said that if Koch truly spent $4 million on counterfeit wines, trophy wines he may never drink, he deserved to be duped. Others have referred to these lawsuits over six- or seven-figure wines as silly rich-man squabbles.
When Koch first complained to Greenberg that some of the wines from his cellar were fakes, Greenberg offered him a refund. Koch refused. During the first day of the trial, Greenberg's legal team asked for this to be included as evidence. “We’ve spent cumulatively about $14 million on a claim that is probably between $100,000 to $200,000,” said Greenberg's lead lawyer, Arthur Shartsis. “The legal system shouldn’t be doing this—at all. Particularly when one of the parties, years ago, could’ve avoided the costs by accepting a full tender. This case is an embarrassment to all of us."
It's true that Koch is litigious. But these arguments—that he was asking for trouble when he bought those wines, or that he should have taken a refund and moved on—don't hold water.
Judges have allowed this case to proceed because Koch has presented evidence that suggests Greenberg knew the wines were fake. Our reporting has found evidence that other collectors who discovered they had purchased fake wines turned around and auctioned the bottles to someone else. Although some rare wines will tragically never be drunk, plenty of restaurants and wine lovers buy them to drink and enjoy. Those buyers deserve peace of mind.
Is it Koch's job to clean up wine auctions? Maybe not. But in the years he has been making a fuss, auction houses have amended their legal disclaimers to allow clients to return bottles that prove to be fake. Collectors have improved their diligence. Some routinely post warnings about problem auction lots on wine message boards, asking the wineries to inspect them.
Would all these things be happening if Koch wasn't making such a stink? I look at that photo of the guy with the sheriff’s star and I think, probably not. What do you think?
David A Zajac — Akron, Ohio — March 28, 2013 2:32pm ET
Steve Kubota — Bellingham, WA, USA — March 28, 2013 2:35pm ET
Jim Mcclure — Ft Worth, TX USA — March 28, 2013 7:03pm ET
Louis Robichaux — Highland Village, Texas — March 29, 2013 3:31pm ET
Richard Gangel — San Francisco, CA USA — April 1, 2013 11:39am ET
Warren Porter — Toronto, ON, Canada — April 1, 2013 5:08pm ET
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