When fake merchandise is passed off as the real thing and sold for huge sums at auction, most people assume it's forged artwork. Now, collectors of fine wines are learning to beware of fraud.
Billionaire William Koch, founder of Oxbow Group, has been on a campaign to expose counterfeit wine sales by auction houses, retailers and collectors, according to Wine Spectator. He scored a big win recently when a New York jury awarded him $12 million in punitive damages in a lawsuit he brought against Eric Greenberg, a wine collector and California Internet entrepreneur. Koch was originally awarded $379,000 to cover the cost of the 24 counterfeit bottles of wine he purchased from Greenberg in 2005, plus $1,000 a bottle. The following day, the jury added $12 million in punitive damages. The counterfeit bottles were part of a $3.7 million wine purchase Koch made through Greenberg. He alleges that Greenberg knew 24 of the bottles were fake. Greenberg denies knowledge and his attorney says they'll appeal the case.
Koch has brought lawsuits against other sellers, but this is his first major win. He says he might use the jury award to start a fund to investigate wine fraud. Sources told Wine Spectator that he spent close to $10 million on this case alone, so clearly, it's not about the money.
"Collectors and individual sellers don't want anyone to know they have fake wine," he told Wine Spectator. "They want to dump it on others. I'm the only guy who's blowing the whistle on it."
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