A Berkeley wine store is being sued by a group of customers for running some sort of wine pyramid scheme. The store, Premier Cru, apparently accepted wine orders totaling $5 million from overseas buyers, but then failed to ever ship the wine.
The company sells wine futures, in which customers buy wine that has yet to be bottled at a discounted rate. When the wine is finally bottled, it is then shipped to the customers — at least, that's how it's supposed to work.
The Contra Costa Times detailed Premier Cru's scam, which has apparently been running for years. The various incidents read as remarkably similar in nature.
In 2013 and 2014, Chinese wine investor Bo Feng ordered more than $840,000 worth of wine from Premier Cru, mostly futures. Feng, who had planned to flip the wine once he received it, claims he is owed more than $660,000 in wine, according to his lawsuit filed this year.
Chen Yu, a Canadian investor, had an agent purchase almost $300,000 in wine in March 2011. He asked for the wine in early 2013 but received nothing but promises before demanding a refund in early 2015, according to his lawsuit. On March 16, Fox cut checks for more than $1 million to Yu and other upset customers as reimbursements; they all bounced, Yu's attorney, Jonathan Polland, wrote in the suit.
In a bizarre, vaguely racist attempt to deflect blame in a separate suit also accusing the store of fraud, store owner John Fox claimed it was all some sort of misunderstanding resulting from the fact that the wine buyers were "mostly Asians" and "insecure because they are not from the area," reports the CC Times.
Despite his protestations to the contrary, the complaints against Fox read as a lot more than just sour grapes (sorry).