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Wine-Based Ponzi Scheme Claims Some Vintage Victims

A Koch brother and a Goldman board member took a bath on some bad wine investments.

Well here's an actual story from Saturday's New York Times...

Wine Scheme

From the outside, the Premier Cru wine store in Berkeley, Calif., looked like a traditional, upscale wine seller. The 29,000-square-foot store was lined with tapestries, wood shelves and a “rare wine room” stocked with trophy Bordeaux and Burgundies.
Yet Premier Cru’s didn’t just sell wine off the shelves. According to court documents, it built a global, multimillion-dollar trading empire selling futures contracts for French wine to thousands of rich collectors and investors over the Internet. Now investigators and customers are looking into whether Premier Cru’s futures business was also used to fund the largest-ever Ponzi scheme in the wine world — with some of the biggest victims coming from China.

Pretty messed up that this "Wine-zi Scheme" preyed on all that luxury-seeking money from an "emerging" market like China. But we guess it is kinda hard to believe that sophisticated money people would fall for a wine futures scam...

The list of Premier Cru’s victims reads like a who’s who of wealthy wine collectors — from the billionaires William I. Koch and Jeff Greene to top financiers on Wall Street and in Silicon Valley. Arthur Patterson, the tech venture capitalist of Accel Partners, was owed $836,000 by Premier Cru, according to court filings. Adebayo Ogunlesi, the Goldman Sachs board member and chairman of Global Infrastructure Partners, spent over $470,000 with Premier Cru.

So if you see a millionaire fund manager drinking some $10 Pinot Grigio straight from the bottle in his corner office this you'll know why.

Claims of a Ponzi Scheme in the Collapse of a Rare-Wine Seller [NYT]



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