Greenberg vs Koch Trial: Part 14

Day 7: Thursday, 4th April 2013

Bill Koch: Redirect

John Hueston started by asking Koch to finish his answer.  Koch replied that he had thought that Shartsis was asking him if he had ever seen in a catalogue that anything was fake, and he had not, but he had seen statements saying “attributed to” or “believed to be”, which implied some doubt.  H was aware that Gil Lempert-Schwarz, Greenberg’s expert, had said that if the wines at issue were to go on sale, they should have been disclosed as “believed to be”.  Had this been how they were described, Koch would not have bought any of these wines.

Koch confirmed that he had spent a lot of money trying to identify the wines in the case as counterfeit.  He denied having spent a lot of time, because he hired a lot of people to spend that time for him, because he takes it extremely seriously.  He would not want to allege that someone had sold counterfeit wine without confidence that the objects were, in fact, counterfeit.

Hueston asked if Koch could have avoided all the work if Greenberg had disclosed the doubts he and others had about the authenticity of the wines.  Koch replied that he would not have done the work because he would not have bought the wines.

Koch confirmed that by the time of the Zachy’s auction in October 2005 he was aware of Hardy Rodenstock in connection with the Thomas Jefferson bottles.  However, he did not know that Rodenstock was potentially counterfeiting anything else.  He learnt this from Mr Frericks, who had documents from David Molyneux-Berry saying that Frericks had a big collection of Imperials of Petrus, and he could not put them up for sale at Sotheby’s, because he had no evidence that Petrus had actually made it.

Koch also noted that at that time they had suspicions about the Jefferson bottles, but had not yet definitively proved it.  It was only in March 2006 that Jim Elroy took the bottles to the Corning Glass Museum who were able to say that the engraving had been done with a tool not available in 1784.  Koch filed suit against Hardy Rodenstock, and got a judgement against him of over $1 million.  Since that time, Koch has worked to publicise what he had found out about Rodenstock, noting that one of his “goals was to shine a bright light on these fakers and resellers of these fakes”.

Referring back to his testimony regarding Richard Brierley, in the Interrogatories, Koch confirmed that he had disclosed everything he knew when he signed the document.  He agreed that he was aware that Brierley was deposed later, under oath, and that Greenberg’s lawyers got a chance to ask him whatever they wanted, with the benefit of the earlier disclosures that Koch had made.  Some of the information that Brierley gave was different to what Koch had thought at the time of his responses to the Interrogatories, which he had never tried to hide.

Koch confirmed that it was his belief that Greenberg was at one time one of the biggest buyers and sellers of wine in the world.  He agreed that Greenberg had stated, very clearly, twice, that he did not inspect his wines.  Koch knows other wine collectors, and has never heard of one inspecting pre-auction.  In fact, his experts and the auction houses have said that very very few people do so.  Hueston asked if, in October 2005, Koch had any reason to believe he should be doing what no one else was doing for an auction that had been advertised as “the best of the best”.  Koch replied “no”.

Asked about tasting as a means of determining authenticity, Koch replied that it is very subjective, and not quantitative.  Added to this is the fact that he finds, after three sips of a wine, his perception changes, or that it can change depending what he has eaten.  In addition, wines change with time and with bottle variation.  Finally, people have different tastes, so something that tastes wonderful to him might not to his friends.  The only thing this can measure is whether you like that wine at that time or not.

Hueston asked if Koch had come to know anything about how known con men would use tastings to deceive people.  Koch replied that Rodenstock was fabulous at doing this.  In his investigation of Rodenstock, he discovered that Rodenstock would buy up old magnums, have the labels printed up for, for example, 1921 Petrus, take 1957 Petrus and pour it into those bottles with something extra to make it taste older.  (Apparently, Rodenstock was an expert in fragrances, having been in the perfume business for a while.)  He would then have experts at a wine tasting – Robert Parker, Michael Broadbent, and others.  (Interestingly, Serena Sutcliffe MW described this very type of event with a vertical of Petrus.  As David Peppercorn MW, her husband, had grown up with an extensive cellar of Petrus, both of them and Clive Coates MW knew the moment they smelled the “wines” being poured that this was not legitimate, and, unlike many, got up and walked out, refusing to lend the legitimacy of their presence to the event.)  Koch believed that in many cases, Rodenstock did a simple bait and switch – tasting some of the supposedly real 1921, made up largely of 1957 plus a bit, and then when it came to the sale, it was “like dishwater”.  Koch emphasised he had learned this a long time after the October 2005 auction.  He also confirmed he was not aware of Greenberg’s expert (i.e. Gil Lempert-Schwarz) asking to taste the wines to determine if they were fake.

Hueston returned to the catalogue, and asked Koch to explain the difference between the bottle description and the tasting notes.  The bottle description relates to the physical condition of the bottle for sale.  In contrast, Koch emphasised that Michael Broadbent – who had done the notes – had tasted a different bottle purporting to be the same year.  They tell nothing about the provenance or authenticity of the bottle.  Nowhere in the catalogue did it suggest that any bottle came from Hardy Rodenstock.  Koch emphasised again that the packaging, and its integrity, are crucial, and, in fact, really what he was paying for.  His understanding was that the catalogue should disclose everything that is known about the item, good or bad.  The standard understanding of silence is that everything is ok with that aspect.  However, if the seller knew or suspected a problem with the label or cork or other aspect, it should be disclosed.

Going back to the “as is” clause in the contract, Koch emphatically stated that he did not believe the “as is” clause allowed a seller to sell wine he believed may be fake without disclosing it, nor to dump wine that another auction house expressed doubts over, nor to hide information.

Bringing up the Mark Curley email, in which Curley questioned Zacharia about the provenance of the 1921 Petrus magnum, Koch noted there was nothing in the email that suggested they had determined it was a forgery or a fake.  They were just asking a simple question regarding the source, the reply being that it came from two different sources, either a top collector in Toronto or from English royalty.  However, Koch had heard at the trial that Greenberg described five possible sources that were not the two mentioned, and said that the Toronto collector might have just been made up.  Koch now believes that Greenberg had been conning him.

Skipping forward a few months, Hueston turned to the conversation Koch, Elroy and Greenberg had had in July 2006, by which time Koch’s team had confirmed that the 1921 Petrus magnum was fake.  At this point, Greenberg told Koch that he believed the wine came from Royal Wine Merchants in New York, and that he had purchased several fakes from Royal.  Greenberg did not, however, disclose that he had kept most of the fakes from Royal and put them back in his cellar, nor did he suggest that other rare Bordeaux bottles bought in the October 2005 auction might also have been Royal fakes.  Greenberg did not offer to give Koch a copy of the Edgerton report, which laid out a number of counterfeits and fakes.

Greenberg had, however, mentioned Bordeaux Wine Locators and that they seemed to deal in a lot of fakes.  Asked if Greenberg was joking when he said this, Koch replied “No, he was bloody serious.”  However, the 1921 Petrus they had been discussing did not have a Bordeaux Wine Locators sticker (although other bottles Koch had bought in that sale did).  At the trial, Greenberg had mentioned he had “thousands” of Bordeaux Wine Locators stickered bottles in his cellar, but he had not mentioned this to Koch when they spoke.  Greenberg had suggested that Royal was laundering money for the Russian mafia; Koch found no evidence of this in his investigation.  Greenberg also had not disclosed that he had threatened the life of Royal’s owner.  Finally, at no time in that call or the later one, had Greenberg told Koch that one of his sources was Rudy Kurniawan, whom he had twice caught selling counterfeit wine, nor that John Kapon of Acker had rejected Greenberg’s magnums.

At this point Shartsis objected that there were lots of things that Greenberg did not tell Koch on the call – what his mother’s birthday was and whether it the first bottle of wine he ever bought was rosé.  The things that were being asked about, Shartsis claimed, were completely inappropriate and were not inquired into by Koch.  Hueston responded that Shartsis had implied that the conversation was some sort of “tell-all”, and he was getting out that, in fact, this was nothing of the sort.  Judge Oetken allowed one more, and Koch confirmed that Greenberg had not mentioned that the Chicago Wine Company had rejected certain of his magnums and identified problems likely to be present in the same magnum Koch had purchased.

Hueston asked about the one time that Koch had sold at auction (prior to the trial, as, of course, there is a large consignment about to be sold via Sotheby’s as I type) in 1999.  Koch confirmed that at that stage he did not believe there was any counterfeit wine in his collection, and that he had not withheld any information from the auction house.  He was not aiming to sell the “shittiest” bottles or get rid of the “garbage” in his cellar, nor did he try to sell any bottles that had previously been rejected by other auction houses.  Since discovering that his cellar has some counterfeits in it, he has not tried to sell even a single bottle from his cellar.

There was a long discussion then at the side bar, in which Shartsis tried to get the refund issue opened up on the grounds that Hueston has opened the door by referring to the expenses Koch had incurred.  Hueston replied that Shartsis had raised the expense issue over and over again, from the opening statement to his cross of Koch.  They then had another discussion about Greenberg’s offer to taste the wines for authenticity (you know my views on this by now)

Bill Koch: recross

After a break, Shartsis returned to the email in which Jeff Zacharia replied to Koch’s query, indicating that the consignor (i.e. Greenberg) had bought the wine from a Toronto collector or English royalty.  Shartsis then argued that Greenberg’s response was not necessarily referring to the 1921 magnum.  In their July 2006 telephone conversation they did speak specifically about that magnum, and Koch confirmed that Greenberg was not being held back, and volunteered more than he had been asked, including about Russian mafia and organized crime (references Shartsis clearly did not want to be reminded of).  Greenberg told Koch that he had purchased several fakes from Royal and Koch confirmed he had not asked about these, although Greenberg had implied he had taken a $1m loss.

Looking at the statements that Koch had made about the catalogue descriptions, and that no statement was good, Shartsis asked if that meant that “fully branded cork” was therefore worse than saying nothing.  Koch replied that it was an explicit positive statement about the cork, and that the other description, silent on the cork question, meant simply that the person writing it thought it was fine.

Shartsis then returned again to the question of the “as is” clause, pointing out that Koch voluntarily participated in the auction, and it was printed in the catalogue.

Bill Koch re-redirect

Hueston went back to the conversation with Greenberg about the 1921 Petrus, and Koch confirmed that this bottle did not have a Bordeaux Wine Locators sticker on it.  Hueston asked if, therefore, when Greenberg spoke about Bordeaux Wine Locators Koch regarded this as some kind of confession.  Koch replied he did not, and confirmed he “absolutely” would have wanted to know that information before going to the auction and buying from the collection.

Bill Koch, re-recross

Shartsis asked if, when looking at the catalogue, Koch had not been aware that there were Bordeaux Wine Locators stickers on a number of bottles in the pictures.  Koch replied that he did not remember

Bill Koch was, finally, able to step down

Click here for Part 15.