Billionaire William Koch uncorks new NY lawsuit against Christie’s alleging wine auction fraud

Billionaire uncorks new lawsuit over rare wine

NEW YORK — The billionaire collector and yachtsman William Koch has uncorked another lawsuit in his 4-year-old battle against fraud in the rare wine business.

Koch sued the auction house Christie’s International in New York on Tuesday, claiming it ignored evidence of fakery in the 1980s when it marketed several bottles of Bordeaux that were purportedly originally owned by Thomas Jefferson.

The suit is the latest in a string filed by Koch over the collection, now regarded by some experts to have been counterfeit.

In this new court filing, Koch also claims that Christie’s has continued to turn a blind eye to fraud since those sales, producing catalogs with glowing statements about the provenance of wines it sells, “even when Christie’s personnel were aware, or had reason to be aware, that such statements were not substantially true or in some cases knowingly false.”

Christie’s denied the charges, but declined to answer questions about the case.

“We believe the allegations in this complaint are incorrect and we look forward to the opportunity to prove our position in court,” it said in a statement.

Koch, who owns an energy company and won the America’s Cup in 1992, has been on the warpath over counterfeiting since 2005, when he began to suspect that his “Jefferson” bottles were bogus.

Bearing vintages of 1784 and 1787, the wines fetched record prices when they were auctioned in the mid-1980s. Koch bought four of them for $500,000. The late Malcolm Forbes paid $156,000 for a single bottle.

The collection emerged in 1985, courtesy of German wine collector Hardy Rodenstock, who claimed it had been discovered in a bricked-up cellar in Paris. The hand-blown bottles were engraved with the initials “Th.J.” and Rodenstock said he had documents confirming that Jefferson ordered them while serving as the U.S. minister to France.

Koch began investigating the collection after being asked to show his four bottles at Boston’s Museum of Fine Art in 2005. Glass cutting experts, he said, subsequently verified that the initials on the bottle were engraved with modern cutting tools not yet invented when Jefferson was alive.

Later, he learned that scholars at the Thomas Jefferson Memorial Foundation had informed Christie’s in 1985 that it doubted the collection was authentic.

In his latest lawsuit, Koch’s investigators also claim to have tracked down German craftsmen who confirmed that they were hired by Rodenstock to engrave the bottles, as well as others, and printers who said they had created bogus labels.

Koch now says he is convinced the industry is rife with similar examples of fakery.

“For years,” he said in his latest suit, “counterfeiters have duped wine collectors worldwide into paying millions of dollars for near worthless bottles of wine.”

He referred his findings to the FBI, which as been making inquiries since at least 2007, but also pressed his case in federal civil courts in New York. So far, he has sued Rodenstock, the Chicago Wine Company, Julienne Importing Co., the auction houses Zachys and Acker Merrall & Condit and the collector Eric Greenberg.

All have maintained their innocence. Rodenstock has repeatedly insisted the Jefferson bottles are legitimate, although he has refused to detail the location where they were found or explain how he acquired them.

The controversy has spawned books and numerous news articles over the years.

Koch had delayed suing Christie’s in the hopes that the auction house would acknowledge its error and institute reforms, according to his spokesman, Brad Goldstein.

“We just couldn’t come to terms with them,” Goldstein said.

Koch has asked a federal judge in Manhattan to block Christie’s from selling any vintage before 1962 without getting an expert to verify its authenticity.

“There is no policeman on the block, here,” Goldstein said. “The fact of the matter is, there is nobody’s looking over these guys’ shoulders.”

Koch’s initial legal complaint against Rodenstock has dragged recently, in part because Rodenstock has refused to participate in the legal proceedings. He has no lawyer and, for a time, was refusing to communicate with the court unless it translated all of its orders and documents into German.

A U.S. magistrate recently gave him until March 19 to respond, or face a possible default judgment.

He has yet to reply, Goldstein said.

Meanwhile, Rodenstock continues to do big business in rare wines.

Import records obtained by Koch’s investigative team show that between 1998 and 2008 he shipped 818 bottles to a distributor in New York. If authentic, that wine would be worth more than $7.8 million.