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News Analysis: Christie's Is Counterfeit Crusader's Biggest Target

Bill Koch's new lawsuit alleges German engravers carved Jefferson's initials on bottles and that auction house staff ignored evidence of fake wines

Peter Hellman, Mitch Frank
Posted: April 1, 2010

Twenty-five years ago, Michael Broadbent, then wine department director at the venerable London auction house Christie's, pounded down his gavel and sold the most expensive bottle of wine ever auctioned after less than two minutes of bidding. It was a small hand-blown bottle with "Lafitte 1787" and "Th.J." engraved on the glass and it brought in more than $155,000. This was the first of the so-called Jefferson Bordeauxs, a collection of wines that German dealer Hardy Rodenstock claimed were found in a walled-up cellar in Paris. Both Rodenstock and the Christie's catalog suggested that the evidence was overwhelming that this wine had been ordered for Thomas Jefferson.

Now that expensive bottle is exhibit A in a new lawsuit by William Koch, the Florida energy executive who has pursued a five-year crusade against counterfeit wine sales in the auction world. On Tuesday, Koch filed suit in a Manhattan federal court, accusing Christie's International of conspiracy to fraud, racketeering and aiding and abetting fraud. Not only was the Jefferson bottle fake, Koch claims, but 32 wines he bought from Christie's for more than $33,700 over several years are also "counterfeit or highly questionable." Koch's complaint alleges that "Christie's has engaged in a pattern and practice of selling counterfeit wines for many years." He wants punitive damages and an injunction ordering Christie's to seek outside authentication before selling any wine from before 1962.

Christie's is Koch's biggest target to date, a culmination of an investigation that Koch claims has cost $7 million. The house, which started operations in 1766, is the oldest name in wine auctions. What's more, Koch's suit is a direct shot at the credibility of Broadbent, who auctioned the Jefferson Lafite and tasted many of Rodenstock's rare old wines. Koch claims to have found several confidential witnesses that can back up his allegations. Two are German engravers who say Rodenstock hired them to carve the initials into the Jefferson bottles with modern tools. Others are former Christie's employees who, the suit alleges, say that Broadbent and the auction house were lax about counterfeits. "Some would say Broadbent was duped by Hardy," Koch told Wine Spectator. "I say that's bullshit."

Long a passionate collector of art and western memorabilia, Koch began buying rare old wines in the late 1980s. By the end of 2005, he had amassed a 40,000-bottle cellar under his Palm Beach home worth an estimated $12 million. He focused on Bordeaux, trying to build verticals of the first-growths stretching back well into the 19th century. As a history buff, Koch found the Jefferson Bordeauxs doubly irresistible. He bought four he claims were sourced from Rodenstock, through various merchants, for a total of $311,804. They were ostensibly a 1787 and a 1784 Branne Mouton (now Mouton-Rothschild), a 1784 and a 1787 Laffite (now Lafite Rothschild).

Even though he never bought Jefferson Bordeauxs from Christie's, Koch said, "The reason I bought the Jefferson wines is because Michael Broadbent authenticated them. Without him having put his stamp of approval on Rodenstock, this guy wouldn't have had such an outstanding reputation."

Koch: "Christie's wine department is corrupt"

The heart of Koch's complaint is that Broadbent overlooked any doubts on the authenticity of the Jefferson bottles. Would the winning bidder of the first bottle, Christopher Forbes, have paid that record price had he known that the Thomas Jefferson Memorial Foundation in Charlottesville, Va., repository of the third U.S. president's personal papers, had already questioned the wine's authenticity? Writing to Broadbent one month before the sale, a researcher at the foundation, Cinder Godwin, noted that, "Jefferson's daily account book, virtually all his letters, his banker's statements, and miscellaneous internal customs forms survive for this period and mention no 1787 vintages." This information was not revealed in the Christie's catalog copy, written by Broadbent, though there would have been time to do so. And, according to Koch, Christie's ignored further evidence that the bottles were questionable when it auctioned off two more of them in 1986 and 1987. (Wine Spectator editor and publisher Marvin R. Shanken purchased one of them.)

According to Broadbent, experts in the Christie's glass department told him that the initials on the Jefferson bottles were engraved by an old copper wheel and properly styled for the period. Even as questions mounted, Broadbent told Koch's lawyers during a 2006 interview that the bottles were "absolutely right for the period." But Koch's experts claim that the engraving was done by a modern electric drill.

Now, Koch claims he has the proof. According to his suit, two German engravers, listed as Confidential Witnesses 3 and 4, who lived near Rodenstock in the 1980s, say they were hired to engrave Jefferson's initials on the bottles. Shown photos of several of the bottles, they identified which ones were their handiwork.

The suit claims Rodenstock was a source of many counterfeits sold by Christie's, especially large-format Bordeauxs. Another Confidential Witness ("CW 6"), a printer who had made posters for Rodenstock when he was a music promoter, claimed that Rodenstock once asked him to make Château Pétrus labels for the 1921, 1928 and 1929 vintages. Rodenstock and Christie's have sold large bottles from each of those classic vintages, according to Koch's complaint. CW 6 also identified a label from a 1929 Mouton-Rothschild that Rodenstock had him reprint. Koch says he bought a jeroboam (4.5 liters) bearing that label from Christie's in October 1987 for $8,800.

Koch also bought a bottle of 1870 Lafite from Christie's for $4,200 that he alleges has age markings preprinted onto the label. Koch had the wine in the bottle tested for Cesium 137, an isotope only found since widespread atomic testing began, and the suit claims the 1870 Lafite tested positive, proving that the wine is from post-1952.

Koch says that his lawsuit against Christie's would not have been filed if the auctioneer had been willing to make peace with him. "Two years ago, I went to Christie's and said, 'you have a problem here,’" said Koch. "And I tried to negotiate, but all they gave me was gobbledygook. If I were Christie's, I'd have admitted the problem, cleaned up shop. But they're not playing that game. Christie's wine department is corrupt."

To back that up, his suit offers testimony from four confidential witnesses that are former employees of the auction house. One, according to the suit, was Broadbent's successor as head of the wine department, who told investigators that he believed several wines Broadbent authenticated were actually counterfeits.

The suit also alleges that Christie's has continued to sell counterfeits and take unnecessary risks in recent years. Last October in New York, Christie's auctioned off a trove of rare old Burgundies described in the catalog as coming from "a longtime friend to Christie's." Sources tell Wine Spectator that the "friend" was California collector Rudy Kurniawan. Six magnums of Château Le Pin 1982 consigned by Kurniawan were pulled from a 2006 Christie's auction after Le Pin's owners said they were suspect, and Acker Merrall & Condit had to pull a collection of rare old Burgundies consigned by Kurniawan for the same reason in 2008. But Christie's auctioned Kurniawan's wines twice last fall without warning bidders who the consignor was.

Christie's: "We believe the allegations are incorrect"

Responding to Koch's suit, a Christie's spokesperson said, "While we have great respect for Mr. Koch, we believe the allegations in this complaint are incorrect. We look forward to the opportunity to prove our position in court." Broadbent could not be reached through either the auction house or his son, Bartholomew, an importer in San Francisco.

Rodenstock did not respond to requests for comment. Koch's case against him is still pending in federal court. He has claimed in letters to the judge that Koch's investigators have threatened and intimidated witnesses in Germany, an allegation Koch denies.

Koch's suit will not be easy to win, legal experts say. For one thing, it will be hard to prove he was hurt by the Christie's sale of the Jefferson bottles when he bought his from other sources. And judges have dismissed some of Koch's allegations in previous suits, arguing that by bidding on wines, buyers are agreeing to the auction houses' catalog disclaimers, which say they are not responsible for the claims of the wines' provenance.

But Koch's suits have never been about verdicts, he admits. Even with punitive damages, it's unlikely he will ever see the $4 million he claims to have spent on counterfeit wines, nor the $7 million he says he has spent on investigation and legal fees. But he believes he will force the auction industry to reform. "The Jefferson bottles are part of an ongoing conspiracy of patterns and practices," said Koch. "I'm going to change that."

More on the Fight Against Counterfeit Wine:

Troy Peterson
Burbank, CA —  April 1, 2010 6:14pm ET
All Koch is going to do is cause auction premiums to increase because the houses will have to make up for lost funds and increased insurance premiums. STAY HOME KOCH AND STOP DOING THE REST OF US ANY "FAVORS"!
Tom Glover
The Woodlands, TX —  April 1, 2010 6:59pm ET
Fraudulent people need to be nailed, but it is hard to sympathize too much to someone who has a $12 MM collection
Koen Masschelein
Beijing, China —  April 2, 2010 2:01am ET
Come on guys, be real. We should all be very thankful to Bill Koch to make a big fuss about all this. U honoustly can not tell me u do not care if the wines you buy or drink are fake???

He has the money to drag them in court, and I'm glad he does. Thanks to people like Rodenstock we can never be sure of the authenticity of any older bottle of wine these days and never ever again. It's not only about the 1787 Lafitte. It's about all '82, '61, '45 and such that are out there!

He is doing us a big favour! Auction houses should be providing proof of authenticity and standing behind anything they sell. Including wines that go for several thousands of dollars.

I say cheers to him!
Prins Wijnkopers
Amsterdam, The Netherlands —  April 2, 2010 4:44am ET
If the authenticity of wine is at stake, all necessary actions have to be made, to avoid fraud. I can't understand why Michael Broadbent let himself in with Hardy Rodenstock. I hope Bill Koch will succeed in his quest, because there to many cases of fraud today. Hopefully this is a start to clean the market.
Bernard Kruithof
San Antonio, Texas —  April 2, 2010 10:45am ET
Those who think that Koch should go away and stop bothering the wine auction business are the ones who will be attaining my 1982 Mouton "that I just had made up in China". Say nothing, do nothing and keep on selling at Chritie's is a travesty--Thank You for making this issue important Mr Koch, You are a hero to those of us that want to drink or collect the real thing,
David A Zajac
Akron, OH —  April 2, 2010 1:19pm ET
I must admit at first I was under the impression that it was all about Mr. Koch, but why would he be throwing so much money at this issue if he isn't both certain as to his claims and wanting to fix what is potentially broke. Yes, he clearly has the money but why would you begrudge him of that, he earned it! Does anyone begrudge Bill Gates his money? If he wants to use it to "clean up" the auction houses, then good for him, and if they are clean, then he won't accomplish much, will he? The article certainly raises many doubts - if I had the money I would join him, but too many are envious of him for his wine and money, I say go for it! I don't buy too many very old or very rare wines, but occasionally I will splurge on something, I would like to know that if I drop $500+ on a bottle of older wine that it is what its supposed to be.
Michael Nowak
Cleveland, OH —  April 2, 2010 10:24pm ET
As the person paying millions for wine, you would think that he would do his own homework and find out if the wines really exist. Like the Burgundy's from the 20's that got pulled from auction because the winery claimed to have never made them. Also, if there were not people who collected wine just to have it and they bought wine to drink it like the wine makers intended then we would not have people counterfeiting old bottles of wine. It is not art made to look at, the finest wine in the world are the finest because they taste the best, not because the look good 200 years later.
Michael Tracy
Corona, CA —  April 4, 2010 10:11am ET
I assume you would also argue that guns were made for hunting and no one ought be collecting old rifles cuz they just drive up the price of old guns. And stamps were made to mail letters and packages. No one ought to own uncancelled stamps especially if the airplane is flying upside down. That's defective and should be destroyed. As for coins, spend them! Don't collect them! A quarter should only be worth 25 cents.

And those old bamboo fly rods. Fish with them or give them to someone who will. And the automobile.......
Marc Dubrow
southampton, n.y. usa —  April 4, 2010 12:28pm ET
As I have stated before, I have all the respect for what Bill Koch is doing to legitimize the auction houses and make sure they are not selling counterfeit wines. Some people have stated that someone with Koch's amount of money should leave the buying to people who will actually drink the wine... I say rubbish to that!!!! Although I will never compete in that segment of the market, knowing what I buy is not counterfeit is very important and how Bill Koch spend his hard earned money is nobody's business but his own.
Kenny Naughton
Minneapolis, MN, USA —  April 23, 2010 2:57am ET
It's true that it is a difficult situation for us that buy at auction. It's going to be difficult for people that buy young Bordeaux at auction to ascertain, given that first growth Bordeaux need 15+ years in the bottle to show their pedigree.
Would it just be a lot easier if we know the location of the cellar where the famous 1787 Lafite came from? Why hide it? I'm sure if the location of the cellar is released, it may just be one of national heritage to the French and US governments. It would be a great opportunity to show unity between countries.
Two cents worth...

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