LeCraw is seeking US$25m on the basis of accounting, punitive and treble damages for breach of contract, fraud, conspiracy to defraud, negligent misrepresentation, RICO violations, conversion, breach of fiduciary duty, and Georgia laws violations. That reflects claims that AWC owes him several million dollars for hundreds of bottles taken on consignment,
He gained attention several years ago by paying £55,000 for a supposedly 219-year-old bottle of Château d’Yquem, which AWC then transported across the Atlantic by private jet on a special delivery basis. He now claims that the 15 bottles purchased from AWC featured computer-printed labels, incorrect corks and inauthentic bottle shapes - "worthless glass containing unknown liquids". AWC has strongly denied the claims and will “vigorously defend” the case.
In 2013 controversial US billionaire William Koch won US$12.5m, later reduced to US$0.924m, in a separate dispute with another party after 24 bottles turned out to be fake. Koch, who features in The Billionaire's Vinegar: The Mystery of the World's Most Expensive Bottle of Wine (Random House, 2013) by Benjamin Wallace, was reportedly down around US$7m in legal costs.
Last year Rudy Kurniawan, was found guilty in New York of making and selling over US$1m of counterfeit fine wines, in authentic bottles with authentic labels or otherwise, some allegedly concocted in his kitchen.
LeCraw's statement of claim indicates that
In early 2013, a wine merchant visited LeCraw’s cellar to determine whether he wished to purchase some of LeCraw’s bottles or offer them at auction. The merchant questioned the authenticity of the 1787 d’Yquem and other bottles, including some of the Lafites. The merchant recommended that LeCraw have a wine authentication expert inspect various bottles in his cellar.
In March 2013, LeCraw began discussions with Maureen Downey of Chai Consulting, a well-known wine authentication expert located in San Francisco, California. LeCraw contacted Ms. Downey to inspect bottles in his cellar to determine whether they are counterfeit.
Ms. Downey recently testified in the high-profile trial in New York in March and April 2013 where billionaire Bill Koch sued Eric Greenberg for “wine fraud” for knowingly selling counterfeit wine which Koch ultimately purchased. Mr. Koch obtained a jury verdict against Mr. Greenberg for more than $12.3 million in connection with the sale of fake wine (although later reduced). See William I. Koch v. Eric Greenberg, et al., United States District Court, Southern District of New York, Civil Action No. 07-CIV-9600, filed October 26, 2007.
After testifying in the Koch trial, in April 2013, Ms. Downey traveled to Atlanta and inspected bottles in LeCraw’s cellar. Ms. Downey and her photographer spent two full days inspecting and photographing bottles in LeCraw’s cellar and Ms. Downey determined that many were fake.
Ms. Downey issued a report in June 2013 (the “Downey Report”) which opines that all of the Lafites, the 1908 Margaux, the 1847 d’Yquem, and the prized 1787 d’Yquem are all counterfeits (the “Fake Wine”).
The Downey Report explains why each bottle of Fake Wine is not what it purports to be. For instance, on some of the bottles that are supposedly centuries old, the labels were printed by computer. Others show excess glue around the labels which could not have been used by the chateaux. Other indicia of counterfeiting relates to the corks, the capsules, the sediment inside the bottle, the shape and color of the bottle, and the color of the liquid in the bottle, among other things.
After receiving the Downey Report, LeCraw, through counsel, provided relevant portions of the Downey Report to Defendants and made demand on Defendants with respect to the counterfeit wine, among other things described hereinbelow.
In a series of written communications following LeCraw’s initial demand, Defendants, through counsel, refused LeCraw’s demands and denied that the Fake Wine is counterfeit.
Although the Downey Report provided detailed and irrefutable evidence that each of the bottles of the Fake Wine is not authentic, Defendants attacked Downey’s methodologies and refused to acknowledge that the Fake Wine is fake. Thus, because Defendants continued to deny that the Fake Wine is fake in the face of irrefutable evidence of counterfeiting, LeCraw was forced to submit the Fake Wine to the respective chateaux in France for the definitive word on whether the bottles are genuine.
On March 19, 2014, LeCraw had the 1787 d’Yquem and the 1847 d’Yquem presented to the senior management of Chateau d’Yquem at the chateau in Sauternes, France for inspection. Consistent with the Downey Report, Chateau d'Yquem's management concluded that both the 1787 d’Yquem and the 1847 d’Yquem are not authentic Chateau d’Yquem.
On March 20, 2014, LeCraw had the Lafites presented to the senior management of Chateau Lafite Rothschild for inspection at the chateau in Pauillac, France. For logistical reasons related to customs, duties and tariffs, four of the 12 Lafites did not travel to France, although they were presented to the chateau for inspection in high-definition photographs on a laptop computer. The other eight Lafites were presented for the in-hand inspection by the chateau.
Consistent with the Downey Report, Chateau Lafite Rothschild’s management concluded that each of the Lafites are not authentic Chateau Lafite or Chateau Lafite Rothschild.
The Directeur des Domaines of Chateau Lafite Rothschild declared all of the Lafites to be “FAUX, FAUX, FAUX.”
LeCraw decided not to incur the cost of transporting the 1908 Margaux to France because of its large size and because it is objectively fake.
Chateau d’Yquem having confirmed that the d’Yquem bottles in the Fake Wine are not genuine, and Chateau Lafite Rothschild having confirmed that the Lafites are not genuine, it is indisputable that each bottle of the Fake Wine sold by Defendants to LeCraw is counterfeit and completely worthless and unmarketable.
Defendants are renowned and self-described experts in the fine and rare wine industry, and they boast of being on the cutting edge of rare wine authentication. Williams has held himself out as a wine expert since he met LeCraw. Williams and his companies told LeCraw that each of the bottles of Fake Wine was authentic and genuine, but as fine and rare wine experts who supposedly researched and guaranteed the provenance and histories of each bottle sold, they knew that all of the Fake Wine was counterfeit when they sold it to LeCraw.
In fact, if Williams is truly one of the world’s foremost experts on fine wine as he says, and as the founder, CEO, and Managing Director of AWC which is one of the “world’s leading experts on fine and rare wine” as Defendants claim, then it would be impossible for Defendants not to know that the Fake Wine they were selling to LeCraw is counterfeit. Defendants knew the Fake Wine was not authentic before selling it to LeCraw, and Defendants’ ongoing and unsupported refusal to acknowledge that it is counterfeit is part of their scheme to conceal the fraud.Deception and authentication in the collectible wine market are generating an interesting literature, including 'The Case of the Questionable Jeffersonian Lafites: Forensic Applications in Detecting Wine Fraud' by John Daab in (2011) 5 Journal of Art Crime and Patrick Keefe's 2007 'The Jefferson Bottles' .