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Food & Drink

California wine shop owner pleads guilty to $45M scam

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Premier Cru Fine Wines filed for bankruptcy in January. The company had been scamming consumers out of millions over several years. (Premier Cru)

The good times are over for John Fox, but they must have been fun while they lasted.

Fox, 66, pleaded guilty to wire fraud last week, confessing in federal court that he defrauded customers out tens of millions in a multi-year Ponzi scheme he ran as co-owner of Premier Cru, a fine wine shop in Berkeley, Calif.

Through the scheme, Fox admitted, customers paid him millions of dollars for wine that he promised to deliver within two years-- but used for personal expenses instead. Those expenses included his home mortgage payments, his wife's credit-card bills, his daughter's college tuition and membership fees at two private golf clubs.

They also included "purchase or lease [of] expensive cars (including Corvettes, Ferraris, a Maserati and various Mercedes-Benzes)."

And that wasn’t all. Fox said he also spent "more than $900,000 on women that I met online."

As reported in Wine Spectator, Fox confessed that he sold wine not only at Premier Cru, but through a “pre-arrival” business in which customers would buy wine that the shop allegedly didn’t have in stock, but that he promised to deliver within a specified time frame. 

Then he falsified purchase orders for the wine he never contracted to buy and entered them into Premier Cru’s inventory.

Occasionally, he said, if a customer complained about non-delivery, he "diverted money coming in from current customers to obtain wine for prior customers who had never received their wine."

On other occasions he would satisfy an irate customer by raiding stock he was holding for others, or by buying it from rival retailers, "usually at prices much higher than those for which I had sold the wine in the first place."

The house of cards came crashing down in January, when Premier Cru filed for bankruptcy. Fox, who filed for personal bankruptcy one month later, estimated that 4,500 customers were still awaiting deliveries of wine for which they’d already paid $45 million.

The Yelp page for Premier Cru is still live and wine shop has a 1-and-a-half star rating. The page has been flooded with dozens of customers who claim they ordered wines that were never delivered. Some say they spent in the high five-figures for several highly-prized vintages. 

Fox, who initially faced up to 20 years in prison, will be sentenced to no more than six-and-a-half years in accordance with his plea agreement. He also has agreed to provide restitution of at least $45 million to the customers and other creditors he stiffed.