Koch, founder of Oxbow Carbon & Minerals LLC, is suing the consigner, Eric Greenberg, who he claims knew he was selling counterfeits. New York-based Zachys Wine & Liquor Inc., which conducted the sale, settled in 2011, agreeing to reimburse Koch for 10 bottles that didn’t come from Greenberg.
“I relied on what was in the catalog and I relied on what was said, that this was the best of the best,” Koch, 72, testified yesterday. He’s seeking damages for fraud, fraudulent concealment and violation of New York business law for “materially misleading representations” about the wines’ authenticity and provenance, according to court filings.
Koch said that he spent about $350,000 at the 2005 sale on counterfeit wines, including fake bottles of 1928 Chateau Petrus, 1921 Chateau Cheval Blanc and 1864 Chateau Latour.
Greenberg, founder of Scient Corp. and Viant Corp., had been cutting down a collection worth millions of dollars, Koch said. Greenberg sold some of his wines through Zachys after being warned by experts, including the head of Sotheby’s wine department, that some of his bottles might be fakes, according to Koch.
The Oxbow founder sued “to demonstrate the culpability of, and recover damages from, Greenberg and Zachys, both of whom deny responsibility,” he said in an amended complaint.
Greenberg contended that he wasn’t aware he was selling any counterfeits and that Koch could have made more effort to investigate the wines in the sale. In opening statements last month, Greenberg’s lawyer Arthur Shartsis told jurors Koch paid someone $158,000 to attend the two-day auction and put in bids on his behalf.
The sales catalog also included an “as-is” clause, a disclaimer about authenticity and notice that the bottles were available for inspection before bidding, the lawyer said.
“It’s your view you’re not bound by the contract?” Shartsis asked Koch during cross-examination yesterday.
“When there’s fraud involved, I don’t think anybody is bound by the terms of the contract,” Koch said.
Earlier in the trial before U.S. District Judge J. Paul Oetken, Greenberg testified about his own investigation into fake wine allegedly sold to him by New York-based Royal Wine Merchants Ltd.
The fake wines he said he found, amounting to as much as $2 million, weren’t included in the later Zachys auction, he testified.
“They were not the same bottles, sir,” Greenberg told Koch’s lawyer John Hueston earlier this week. “I have been a victim of this, too, and you’re trying to make me a criminal for being a victim.
The case is Koch v. Greenberg, 07-cv-9600, U.S. District Court, Southern District of New York (Manhattan).
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