Jury Awards Bill Koch $12 Million in Counterfeit Wine Lawsuit

Court finds that collector Eric Greenberg defrauded Florida billionaire at wine auction
Apr 12, 2013

Updated April 12, 2013

Seven years into his unrelenting, cost-be-damned campaign to clean up the rare wine business, Bill Koch scored a big victory—a $12 million victory. A jury has found in the Florida energy executive's favor on all counts in his lawsuit against fellow wine collector Eric Greenberg. Koch accused California Internet entrepreneur Greenberg of fraud, making materially misleading representations and false advertising. Koch spent $3.7 million at a Zachys auction of 17,000 bottles from Greenberg's cellar in October 2005, and alleged that 24 of the bottles he bought were fakes and that Greenberg knew it.

The trial lasted two and a half weeks, but it took the eight-person jury just two hours to reach their verdict April 11. Koch was initially awarded compensatory damages of $379,000 to cover the cost of his purchases plus $1,000 per bottle. The following day, after a further hour of deliberations, the jury decided to award Koch $12 million in punitive damages.

After the verdict, Greenberg left the courtroom silently and did not offer any comment—one of his attorneys said they would appeal the decision. Koch, on the other hand, was ebullient. "There was a code of silence in this bloody wine business, and now it's been broken." He pledged he would use the money to set up a fund to educate on counterfeit wines, allowing other collectors to avoid his mistakes.

The decision is Koch's biggest win yet in his campaign to expose counterfeit wine sales by collectors, auction houses and retailers. Koch has filed suits against multiple parties, but this is the first major verdict in his favor. (A judge did rule in Koch's favor in a lawsuit against German wine dealer Hardy Rodenstock, but Rodenstock refused to come to America to contest the allegations.)

The damages should help pay for Koch's extensive expenditures. Sources close to the case say Koch has spent more than $10 million on this suit alone, though money does not appear to have been his concern. "Collectors and individual sellers don't want anyone to know they have fake wine," he told Wine Spectator just before the trial began. "They want to dump it on others. I'm the only guy who's blowing the whistle on it."

Greenberg has maintained all along that he did not know any wines sold were fake and that it was Zachys’ responsibility to uncover any problem bottles. But Koch presented witnesses that said Greenberg was aware since 2002 that his cellar contained counterfeit wines. A former house manager testified that Greenberg told him he planned to resell them.

Photograph by Gregory P. Mango

Eric Greenberg leaves the federal courthouse.

Greenberg also complained that he offered Koch a full refund several years ago, but the energy executive refused to accept it. “I think this is a horrible waste of taxpayer money," he said when asked on the stand if he was upset at Koch. "It is a pathetic thing that two wealthy people are sitting in court wasting taxpayer resources.”

Koch's campaign in the courts is not over. A lawsuit against alleged counterfeiter Rudy Kurniawan is on hold while the Indonesian national faces federal fraud charges. On April 10, a judge set Kurniawan's trial date for Sept. 9.

Collecting Auctions Crime Fraud News

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