This story was updated on Jan. 20.
The FBI is looking into complaints against Premier Cru, the once-prominent California wine merchant that filed for bankruptcy on Jan. 8, Wine Spectator has learned. Several customers of the Berkeley store have filed lawsuits against the retailer in the past year, alleging that they never received wines they ordered and paid for—amounting, in some cases, to hundreds of thousands of dollars in highly collectible wines.
"Our office did receive multiple complaints about Premier Cru, but the FBI's San Francisco office is now taking all complaints," Teresa Drenick, a deputy district attorney in the Alameda County District Attorney's office, told Wine Spectator.
The handover to the feds was confirmed by Michele Ernst, spokesperson for the FBI’s San Francisco office. "We are aware of the Premier Cru situation, and it is correct that we are taking complaints off of the DA's hands," Ernst told Wine Spectator. "The FBI has multiple resources to handle complaints and information that we receive."
In return for unbeatable prices on sought-after wines offered as "pre-arrival,” Premier Cru often took years to deliver orders. By the end of 2015, disgruntled customers had filed a dozen lawsuits against the firm in state and federal court. A credit card processor also filed suit, claiming it was owed $228,500 for "chargebacks"—refunds to customers who had not received wine they had paid for. The lawsuit also alleged fraud, claiming that Premier Cru and co-owner John Fox knew that customers would never receive the wine they paid for.
Neither Fox nor Ortega could be reached for comment. Stephen Finestone, the attorney who filed the bankruptcy papers, said, "Mr. Fox will not have further comment about the matter."
The bankruptcy filing put all those suits on hold. In it, Premier Cru listed $7 million in assets and almost $70 million in liabilities. Most of those debts were owed to nearly 9,000 customers who paid for wine they did not receive. Those unsecured creditors face receiving dramatically less than they're owed once the company is liquidated.
Bankruptcy doesn't shield a company's owners from liability if a court decides there was fraudulent activity. While the FBI would not elaborate on how it's handling customer complaints, one of the questions the Department of Justice would have to consider is whether or not Premier Cru's implosion was based on poor business practices or fraud.
"If the owners were behind by $70 million, they had to have known that they were upside down for at least two or three years," said Ronald Kohut, a lawyer for one of the plaintiffs suing Premier Cru. "So I don't know how they could possibly be collecting new money from clients in 2015, knowing that they were that far behind. These are not inexperienced business people. How did they not understand the situation of their company?" Kohut did say he does not know enough to comment on whether fraud took place, however.
Just a few months ago, Premier Cru began announcing weekend sales of highly desirable wines, such as Domaine Ponsot grand cru Burgundies, discounted by 40 percent from regular prices. Other wine merchants tell Wine Spectator that Premier Cru's prices were in some cases below the wholesale cost offered by the wineries.
"They didn't have my wines," said Domaine Ponsot proprietor Laurent Ponsot, who heard complaints from customers. "People came to the shop, mostly online, and they were told everything from Ponsot is sold out, and they proposed something else on which they put a higher margin."
Poor business practice is not the same as intent to defraud, however, and it's unclear where the customer complaints will lead. A first meeting of creditors, at which proprietors Fox and Ortega must appear, is scheduled for Feb. 21.