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Fake wine trial wraps up in New York

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(Globalpost/GlobalPost)

A US billionaire's attempt to put a cork in what he says is flagrant fraud in the top-end wine trade reached a climax Thursday with closing arguments in his trial against another wealthy collector in New York.

Bill Koch, brother to the better known siblings who help fund the conservative Tea Party movement, made a complaint in 2007 that Eric Greenberg sold him wine that was not the rare vintages claimed on the labels.

Koch, 72, had bought 2,669 bottles for about $3.5 million at auction, all of it put up for sale by Greenberg, a phenomenal collector and businessman with a cellar of some 70,000 bottles.

They had extraordinary labels like Chateau Latour 1928, worth $2,873, a Chateau Latour 1864, several Cheval Blanc 1921s, and a Chateau Petrus magnum from 1921 that was bought for $29,500.

Koch testified he'd been looking for "the best of the best," and thought he was getting it. Some bottles were said to have come from "English royalty."

But 24 bottles bought for $355,000, alleges Koch, turned out to be fake.

The scam of pouring cheap booze into prestigious bottles is an acknowledged problem in the wine world, with former major dealer Rudy Kurniawan set to go on criminal trial later this year in New York for allegedly running a fake wine factory in his home.

In a sign of the stakes in these rarified circles, Koch and Greenberg threw considerable legal resources at the trial. Both men attended, each sitting flanked by half a dozen lawyers and assistants, while the jury handled evidence including bottles of wine that the amateur might assume would cost a fortune -- but could be worthless.

Greenberg's lawyer in the civil trial in Manhattan, Arthur Shartsis, said Koch's case is just sour grapes.

"Mr Greenberg didn't believe those bottles were fake," he said in his closing arguments to the jury. Shartsis sought to shift the blame from his client to the auction house Zachys. "In the contract, Zachys had complete responsibility."

In fact, Greenberg was himself aware of the potential for phony wines and always watchful over his cellar. "He didn't let fake bottles out except by accident," the attorney said. "Somebody made a mistake, that is not a fraud."

The auction, as is normal, stated that the wines were sold "as is," meaning there was no guarantee, Shartsis said, adding that Koch could hardly have failed to know this.

But Koch's attorney John Hueston argued that Greenberg went ahead with his consignment to Zachys in full knowledge that the bottles included fakes -- and in fact hoping that Koch would snap them up.

"Mr Greenberg knew it and he didn't tell anybody," Hueston told the jury. "He sold those bottles for top dollars."

The case then went to the jury of six. Koch is seeking monetary compensation for the alleged fraud.

Meanwhile, Kurniawan, once hailed as one of the world's most influential rare wine dealers, has pleaded not guilty to his fraud charges and is tentatively scheduled to go to trial on September 9.

Working with collectors happy to spend tens of thousands of dollars on a single bottle of red, Kurniawan -- also nicknamed "Dr Conti" and "Mr 47" -- amassed expensive contemporary artwork, Patek Philippe watches, and a vehicle fleet including a Lamborghini.

In reality, prosecutors say, from 2004 until February 2012 Kurniawan was busily mixing ordinary wines into bottles masquerading as rare vintages. The collectors he allegedly duped included Koch.

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http://www.globalpost.com/dispatch/news/afp/130411/fake-wine-trial-wraps-new-york-0