Bloomberg - The Disastrous $45 Million Fall of a High-End Wine Scammer 12min

One of the biggest players in the fine wine market, Premier Cru had $20 million in annual revenue in the mid-to-late 2000s. ... wines were being offered on “pre-arrival,” defined on the company’s website as “wines we have purchased (typically abroad) that have not yet arrived. Depending on the particular wine, the arrival time is typically 6+ months to over two years.” ... This practice isn’t that unusual. Pre-arrival is a way for collectors to lock in allocations of highly sought-after bottles that might sell out—and often on favorable terms. To many clients, this arrangement had another advantage. Premier Cru sold mostly young wines; rather than having to age them in their own cellars, buyers were happy to let Premier Cru hold on to them. Better yet, its owner, John Fox, never charged for storage. ... Fox promised clients access to these nuanced beauties through a gray market. This means buying from brokers and other secondary merchants, mainly in Europe, as opposed to working with official importers. Although it’s legal in California, the gray market has its share of shady operators. Poor storage and handling is a common problem. The discounted bottles that Fox obtained, though, were always pristine, according to the four clients interviewed for this story. The trade-off was that Premier Cru was slower to deliver. Other gray-market retailers usually kept customers waiting no more than four to six months; with Premier Cru, the waits ran to years. ... Fox, it would be revealed, easily bilked wealthy bankers, experts who’d amassed fortunes reading the market, of hundreds of thousands of dollars. He led less wealthy oenophiles into deluding themselves they’d found a too-good-to-be-true source. And Fox, now 66, managed a remarkable juggling act for more than 20 years, all while fitting into his complex financial contortions a series of twentysomething girlfriends he found and paid online. In the end, he owed former clients $45 million.