If you’re unfamiliar with Premier Cru Wine, literally translating from french to reference the first harvest of a crop. Until recently, they were a large and well established wine distributor in Berkley, California. The company has since filed for bankruptcy stating it owned $7 million in assets, mostly wine, that would be forfeit to wipe out their $70 million debt. The huge discrepancy in the figures has launched a federal investigation into a supposed ponzi scheme.
The large majority of the debtors are actually customers who claim they never received the wine they ordered. This ponzi scheme was centered around the idea that customers were buying wine “futures” with the promise that these promised bottles were aging somewhere in Italy or France. A truly remarkable spin on the ponzi scheme, and with a name translating to “first growth,” I can only assume this was the plan all along.*
Last year, the company reported a gross earnings of $19 million with only a small $2,500 loss from one theft incident. Of course, the FBI is likely to continue combing through the documents until they can figure out where the owed money went. It’s been reported that the owners were so poor that they started offering to pay employees in wine before closing their physical location in California.
This is a heartbreak for wine lovers, but you know what they say, if it sounds too good to be true, it probably is. Most of the individuals scammed were wealthy individuals, so no, not me. In fact, despite having a worldwide customer base many of the wealthiest to fall for this con were out of Asia, not North America.
The customers weren’t the only ones to get burnt by doing business with Jon Fox and Hector Ortega. Before filing bankruptcy, the owners of Premier Cru submitted a number of refunds through credit card companies knowing that the funds in their bank accounts were gone. This lead to another lawsuit against the company.
*If you’re unfamiliar with ponzi schemes, only the first people to get involved make out. They spread the word about a fantastic investment, and the following batch of people get ripped off.