Premier Cru owner sentenced to six years

John Fox, owner of bankrupt fine wine retailer Premier Cru, has been sentenced to six-and-a-half years in prison for running a ponzi scheme for two decades.

John Fox of Premier Cru

The 66-year-old was sentenced by Federal Judge James Donato in a San Francisco court last week, who described Fox’s action as “a long running empire of deception”.

Fox allegedly showed remorse for his misdemeanours, telling a local court reporter: “I wish I could go back in time and undo all the damage I caused. I want to serve my time in prison, and when I get out, I hope to pay back everyone.”

As part of his plea, Fox has agreed to make restitution of US$45 million to 9,000 customers who failed to receive the wines they paid for.

Premier Cru was founded in Berkeley, California, by Fox and business partner Hector Ortega in 1980, and made its name for selling European fine wine pre-arrival at a lower cost than its competitors, with delivery promised within six months.

Fox sold $20 million worth of phantom wine between 2010 and 2015, embezzling money that he owed both customers and suppliers.

He used the money for his daughter’s tuition fees, credit card bills, golf club membership, and on expensive cars including a Corvette, Ferrari and Maserati.

By the end of 2015, prices for some fine wines had been slashed at the merchant by up to 40% and were priced lower than producers were selling the wines to wholesalers and importers.

During this time, customers began filing lawsuits against Premier Cru for phantom fine wines they never received leading the store to shut last December.

On 8 January this year, Premier Cru filed for bankruptcy with debts of over US$70m, with Fox declaring himself bankrupt two weeks later. In August, Fox pleaded guilty to a single count of wire fraud in connection with the scheme.

Fox is eligible for a sentence reduction of 54 days for each year of good behaviour, meaning he could be released from prison as early as 2021.