Eyebrows raised over auction of Greenberg’s wines

The cellar of Eric Greenberg, a collector convicted of consigning fake wines to auction, is being put up for sale in Hong Kong later this month – raising eyebrows in certain quarters.

The auction, dubbed ‘The Golden Gate Collection’ and hosted by Zachys, is taking place from 17-18 November. Featuring over 7,000 bottles of wine in over 1,100 lots, the sale is expected to realise HK$47-$70 million (US$6-$9m) over its two-day duration.

The choice of consigner to the auction though has attracted interest, in particular from anti-fraud commentators, notably in the ever-active online world of Wine Berserkers.

Los Angeles-based lawyer Don Cornwell has raised the point that it is strange that Zachys has chosen to accept wine from a man who has been found guilty in a Federal court of fraud only a few years ago.

Greenberg was found guilty by a New York court in 2013, “by clear and convincing evidence” of willfully consigning wines he knew to be fraudulent to an auction in 2005.

The wines were bought by avid collector Bill Koch who then brought the suit against Greenberg when he found the wines (along with many others in his collection from various sources and sales) to be fraudulent and was awarded substantial damages in the process.

The wines in question (an 1846 Château Latour, magnums of 1921, 1928 and 1950 Petrus and magnums of 1921, 1945, 1949 and 1950 Château Lafleur) were sold by Zachys, which settled with Koch out of court.

There is no suggestion any of the wines being sold in the Hong Kong sale are fake at all but this is a man who defrauded Zachys and one of its clients in the past, so is why the auctioneer is prepared to sell his wine again?

Zachys itself makes no attempt to hide who has consigned the wines and is honest about his past, president Jeff Zacharia stating in his introduction to the catalogue: “A note on Eric Greenberg, the consignor of this collection: Eric Greenberg’s collection at one point numbered over 60,000 bottles, and he has bought wines of questionable authenticity over the years.

“After an auction of approximately 17,000 bottles from his cellar in 2005, Eric was found civilly liable for fraud when 24 of the bottles were determined to be inauthentic. Zachys has inspected the Greenberg collection and selected the bottles for this auction, and Michael Egan, an independent expert, has also inspected and approved every bottle in this auction.”

On the other hand, one might argue this statement flirts with disingenuousness. Zacharia uses the more delicate phrase “inauthentic” rather than the blunter “fake” and there is a suggestion that a mere 24 of 17,000 bottles were fake when, in fact, due to a shortened trial period, 12 other bottles were dropped from the suit. During the trial however, Greenberg’s expert witness, Gil Lempert-Schwarz, admitted that none of the 36 bottles brought in the original litigation were authentic.

Furthermore, Mr Zacharia notes that Greenberg, “bought wines of questionable authenticity over the years”, raising the possibility that there may, potentially, still be fakes lurking within the collection.

It is somewhat unfortunate too that the name of this sale should so closely mirror the name of the sale in which the fake wines were sold to Koch – ‘The Man with the Golden Cellar’.

Zachys makes it clear that authenticator Michael Egan “inspected and approved every bottle in this auction,” but again quite how Egan has managed to properly examine and authenticate over 7,000 bottles of wine over an unspecified period of time was not made clear (although as Zacharia notes below Zachys’ specialists were also involved in inspecting the bottles).

Cornwell also claims that at least two major auction houses were approached before Zachys but both rejected the consignment, though once again on what grounds is not known.

the drinks business has contacted the major auctioneers for comment.

Responding to db Zacharia reiterated: “Zachys is constantly vigilant in evaluating the provenance, authenticity, and condition of the wines that are sold. In the instance of the Golden Gate Collection, as with any collection, Zachys is confident in the wines for sale. As an added measure of transparency, Zachys has named the consignor in the auction catalogue. In addition to Zachys specialists inspecting every bottle, Zachys has hired Michael Egan, a world renowned wine authenticator and wine expert to inspect every bottle offered in the auction.”