Wine Shop Owner Scammed Customers Out of $45 Million
The married man told the court he spent "more than $900,000 on women that I met online."
If you were under the impression that your favorite wine shop is a place free of money grubbing schemes and fiscal corruption, one California man might make you think twice. John Fox, owner of upscale Berkeley wine shop Premier Cru, pled guilty this week to scamming his trusting customers out of a staggering $45 million.
Fox confessed to defrauding his shop's patrons out of millions every year in order to pay off expensive home mortgage payments, credit card bills, golf club membership fees, and the purchase or lease of a variety of expensive cars, including Ferraris, Corvettes, Mercedes-Benzes, and a Maserati, according to Wine Spectator. The married man also told the court he spent "more than $900,000 on women that I met online."
The Premier Cru owner managed to pull of this multi-million dollar windfall via a Ponzi scheme in which Fox encouraged customers to pay him the big bucks for wine that would allegedly be delivered within two years. The shop, which Fox cofounded with manager Hector Ortega in 1980, had built a reputation in the fine wine world, making customers all the more susceptible to being hoodwinked.
In his court statements, Fox confessed that he sold these phantom wines "based on the premise that Premier Cru would contract to buy wine from Europe... and then sell it to customers before it arrived in the United States." In order to fool the customers into taking this deal, the shop owner would create false purchase orders and enter them into their inventory. This practice, which altogether tricked 4,500 customers, began in 1993 or 1994, and escalated for years. In the period of 2010-2015 alone, the shop took in $20 million from the sale of the faux bottles.
Though facing up to 20 years in prison, thanks to a plea agreement Fox will serve a maximum of six years and six months for his schemes. He'll also have to provide $45 million in restitution back to the customers he tricked. We're guessing that means he'll be saying farewell to his Maserati—and his career in the wine world—forever.