Hacker News new | past | comments | ask | show | jobs | submit login
The Fall of a High-End Wine Scammer (bloomberg.com)
100 points by kspaans on Aug 28, 2016 | hide | past | favorite | 57 comments



> Meanwhile, the store was becoming even slower to deliver. In February 2012 a participant on Wineberserkers.com, a popular discussion board, started a thread titled “Why does Premier Cru take so long” that would continue unspooling into outrage for the next four years.

If you want to amuse yourself, here's the thread: http://www.wineberserkers.com/forum/viewtopic.php?t=61257

It's interesting to me that even the mere hypothetical suggestion that Premier Cru was a Ponzi scheme produced such outrage.


I've been flicking through the thread, for those interested the lawsuit is first brought up here:

http://www.wineberserkers.com/forum/viewtopic.php?f=1&t=6125...

Basically every page before then is a few people saying it might be a pyramid, and everyone else calling them trolls or competitors smearing the company.

It's funny that there were a few people who guessed exactly what was happening years before the bubble burst and they were silenced by all the people saying everything was fine because they got their wine just fine.


Powerful, respected people, or just people with enough money to demand to be treated as such, do not like to be made fools of any more than you or I, some even less so. Do they want to believe that they're so thick they've been swilling crap and scammed? People usually believe what they want to believe, for as long as possible.


Nobody said anything about the why am being bad. The scam is that the wines they ordered just didn't exist -- what little they did receive was the genuine high-quality stuff. That's the whole reason the scam was able to take off


I phrased that poorly, I didn't mean in this case. I'm thinking in general of study after study that shows most people can't tell the difference between red or white wine without the color as a guide.

Also, "Wine" to "Why am", classic autocorrect. I wonder how much longer we're all going to get to enjoy them?


I've read many studies that depicted folks not able to distinguish the price point of wine[1] but not being able to tell the "color" of wine is slightly rediculous to anyone who've drank enough wine. The flavor profiles are extremely different.

P.S. I spent 10 years in hospitality industry and have known many wine sommeliers, purveyors, and restaurant owners and have sold enough wine to be able to judge the regular public. I've also participated in many blind tastings and never experienced anyone "mixing up" the verity of wine.

P.P.S. I put color in quotes because all wine is white, red wine gets its color from the skin of the grape and the oak barrels. That's why Oak Ages Chardonnay is "golden", it took a bit of the oak barrel with it.

If you're curious, white Pinot Nior should be easy to find. Try a blind test against other verities, for scientific purposes.

[1]: https://www.theguardian.com/lifeandstyle/2013/jun/23/wine-ta...


http://www.newyorker.com/magazine/2002/08/19/the-red-and-the...

Granted, "Study after study" was clearly wrong.


Seems this is typical of urban legends - something that has a hint of truth but which has been retold in a way to produce a more sensational sounding result. Snopes did a little digging a couple of years back to find out what the origin of this story was: http://sciencesnopes.blogspot.cz/2013/05/about-that-wine-exp...

To save you the bother of reading the article (though it is pretty interesting) here's the key few sentences which describe the experiment setup and execution. Essentially a scientist called Frédéric Brochet was doing some research into "perception and wine tasting" and setup an experiment with some undergraduate enology (wine tasting) students.

"The undergraduate subjects came into the lab one week and were given a glass of a red wine and a glass of a white wine. (both Bordeaux, but the experimental details do not include any label or vintage, so we are unable to judge them) They were supplied with a list of potential descriptive words, and told to make a list of words and phrases that best described each wine, either from the supplied list or in their own words. The following week they return to the lab for another session. They were presented with two glasses, one containing white wine, and the other containing the same wine dyed red. They were then given the list of descriptors that they had used to describe the wines from the previous week, and asked to choose which of the wines in front of them best represented each descriptor. It was a forced-choice setup"

So "undergraduate students select the same words to describe a red wine which they had previously used to describe a white" becomes "wine experts can't tell the difference between red and white".


Here is the paper of actual study: http://web.archive.org/web/20070928231853/http://www.academi...

It is infuriatingly short of methodological detail and the little that is there is very much open to questioning.


There are obviously different types of wine, like dry and sweet at the simplest extreme. Sure, color may be hard or impossible to taste (which should be obvious, right? you can't taste the difference between a yellow fruit and a red fruit, it doesn't classify that way), but there are still different flavors.


Arguably more embarrassing than auto correct, I was dictating it to my phone.


...So you're saying we're just going to have a bunch of new mistakes to amuse ourselves with? Oh good!


Any business that has a long delay between collecting revenue and delivering product is vulnerable to this - it's one of the reasons, for instance, that life insurance is so highly regulated. Grey-market auto sales (eg of high-end sports cars that need to be imported & converted), real estate development (Galt's Gulch in Chile), and sales of silencers or other highly regulated firearms stuff (lots of paperwork to wait for) are other examples. Hell, even Kickstarters are notorious for this.

One problem is that it's really difficult to distinguish business incompetence from never intending to follow through, so often the guy pulling the scam won't be prosecuted and pops back up pulling the same scheme in a different market. It's totally legal to solicit orders and only then try to fulfil them, and depending on the market sometimes there is an issue actually getting the product.


I thought there was a law against taking money selling a product, and then spending it on something else and having no money left to fill the order. Is that true?


No, because then using pre sales or deposits for operating expenses would be illegal. Fraud is generally based on intent in addition to outcomes.


Watch Red Obsession for a little background on this market. http://m.imdb.com/title/tt2419284/

Should be on Netflix - edit: but it is not :(


That was a very good doc that I put on about a year ago. I'm not a wine guy, but it's a great story.


"Unavailable to stream" :-(


Bummer. It was up there a couple months ago.


$4 rental on Amazon, it actually looks worth it to me. Free if you have Sundance, but I somehow doubt that there are a ton of cable subscribers on HN...


Sounds like I'm not the only one who gets headaches from wine.


That's sulfites right? Do they make lower sulfite wines? They might.


Sulfites are a natural product of fermentation, so you won't be able to find wine completely free from sulfites. US labelling requires the sulfite warning (or did 20 years ago, the last time I was in the US ;-) ), even if no more sulfites are added in processing.

Sulfites are often added at bottling time in order to reduce oxidation of the wine. If the wine is very young, it is usually filtered, which can introduce oxygen into the process. Thus young wines often have sulfites added. If a wine has been aged for a couple of years, it will not need to be filtered and so it might not have sulfites added. Depending on the winery, you may find that higher quality wines will have little enough sulfites that you won't get a headache.

Keep in mind my original sentence, though, if you are allergic to sulfites. No wine (or beer) is free of it, so if you are in danger, do not consume it.


Probably. Beer is fine, but I don't really drink that either.


Beer is not fine if you have a real sulfite allergy.


Noted.


This seems like a generic scammer. He didn't even have the brain to run it as a pyramid scheme, you certainly don't want your big clients to only ever receive 1 bottle.


Just guessing, but I'd say that it's harder to pay back the original people because they're not being paid in cash, they're being paid in a harder-to-get product.

Or the guy simply forgot about the older orders...


I didn't RTFA tell me he at least offered to cellar the wines for then at an extra cost then have lots of different people expensive tours of 'their' wine racks?


If you enjoyed that Bloomberg article you might enjoy this story which was posted a while back on HN:

http://nymag.com/news/features/rudy-kurniawan-wine-fraud-201...

HN discussion:

https://news.ycombinator.com/item?id=10474174


If the guy is a scammer, then why is his fall disastrous?


I'm assuming disastrous for all of the people he bilked out of their money.


Disastrous for him, at the least.


It's almost as though the world of fine wine is full of rich suckers who truly believe they have a rare and golden palette.

Delightful.


They can hang out with the people who buy $3500 ceramic insulators for their $14,500 stereophile grade audio cables.


You mean "$10,000 stereophile grade Ethernet cables".

I wish I was joking: http://arstechnica.com/staff/2015/02/to-the-audiophile-this-...


"$10,000 for Ethernet cables?! What a rip off,” says Mr. Morita[1].

[1] http://www.wsj.com/articles/a-gift-for-music-lovers-who-have...


shit, if people pay that much for a 8P8C RJ-45 / copper shielded cable, imagine how much I can sell a $4.50 duplex LC/UPC singlemode fiber cable for if I wrap it in a fancy carbon fiber looking jacket. At least $13,995.


It's often the same people :)


Huge Venn diagram overlap.


This is a very funny joke, right? No such things exist at those pricepo-

Google

Oh god no. I'm genuinely surprised, although I shouldn't be.


Please check the special $1000+ power cables for audiophiles...


Alternatively, look at the people who pay the utility companies to install a utility pole/transformer just for them. Because, apparently, normal electricity is too noisy/dirty because other people are using it too.


I laughed along with the rest of us when we discussed this a couple weeks ago[1], but then a friend of mine said she'd love to get their own power feed to their house in Los Angeles. Apparently one of the neighbors draws 4 times the power[2] of a typical house and causes brownouts which wreak havoc on their electronics.

[1] https://news.ycombinator.com/item?id=12289729 [2] I speculated they were growing weed, but they don't know what the neighbors were doing to use so much power.


Hahaha...

Googles

Ok seriously, stop, I can only take so much of this whiplash. That's right up there with not wanting to breath the same air as the "Peasants".


Air? I wouldn't feed my grapes the swill you breathe: http://www.carneroshills.com/about/terrior/

"The idea of terroir has a mystical aspect. However, salt water, tides, moist morning air, cool afternoon breezes, nightly fog, rolling hills, mineral soil and intense mid-day sunshine allow Carneros to be a truly unique appellation. Vineyards in close proximity to each other produce distinctly different wines, each a true expression of its terroir. And yet, there is always an overriding Carneros identity, a product largely of the dominating maritime climate."


With all due respect, terroir is a major aspect of wine.

However, you shouldn't believe me. What you should do, if you doubt, is perform a blind taste test: Pouilly-Fuissé vs Pouilly-Fumé.

The two regions are literally across the river from each other and have distinct characteristics.

Simply, to de-romanticize[1] "terroir", it's all about chemistry. The taste is a chemical reaction and certain climates, soil, etc. allows an individual to taste "stuff".

[1] http://winefolly.com/review/where-wine-flavors-come-from/


I would not propose a blind test to anyone and "experts" (oenologist) will kindly refuse to do the test. I tried my "wine liking" friends with this kind of blind test, and actually proved them they do not feel anything (the wine was the same in both glasses, they were certain that this glass was x and that glass was y, then ten minute later I did it again, with the same "those two wines are uncomparable" answer, while the wine was exactly the same)

So, if ask me, the wine thing is a scam from the begining. The only stable criterium for good vs bad wine is how bad the head ache in the morning. I.e. I can drink a >20€ bottle alone and be clear the next morning, while a <20€ bottle (with exceptions) is a bad idea.

Oh, and I'm French, and most my family and friends have contracted this oeno-magicallicus virus, which makes you believe in things that do not exist. [edit: and pay for them unexistent things]


I would not agree that you can't tell the difference between good and bad wine by taste alone, but I do agree about the difference in how you feel the next day is determined by price.


While I'm not disputing the importance of terroir, your example is not the best:

- Far from being "literally across the river", the two regions are ~200km apart by road (Pouilly-Fumé is from the Loire valley, Pouilly-Fuissé from the Mâconnais).

- The two wines are made from different grapes: Pouilly-Fuissé is a Chardonnay, while Pouilly-Fumé is a Sauvignon Blanc.

Maybe you meant Pouilly-Fumé and Sancerre? Same grape, opposite sides of the Loire?


I understand why that would seem... goofy, but to give a concrete example that we all know and love... The Vidalia Onion!

If you plant them in Vidalia (or anywhere with sandy soil and low sulfur content) you get lovely, sweet, onions. Plant them anywhere else, and they're just as piquant as any other white variety. That's a really big example of "Terroir", without the mystical crap attatched. Grapes as I understand it, in relation to their water/sugar/acid content, vary greatly with relatively minor changes in climate.

At least in part, this is why climate change is likely to do quite the number on French wines, possibly forever, definitely for a very long time.


I was talking to a winemaker friend of mine about such things and he confirmed the ideal weather for particular grapes was shifting north and recommended growing grapes in Colorado.


Some of the audiophile stuff is hilarious - my personal favourite is the crystals/stones you're meant to place around your cables for some reason: http://www.machinadynamica.com/machina31.htm


Power cables.

I feel as though I've lost my mind over the course of a single, brief conversation online. This is the "golden umbrella stand" of the electronic world.


The wine world is full of people who want to advertise that they are richer than the next guy. Scammers upset the signalling.


Is there any evidence they don't have a good palette?


Lots of colors missing.

(Most of us are born with just a palate. Palettes need to be surgically inserted.)




Consider applying for YC's Spring batch! Applications are open till Feb 11.

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: