At Premier Cru auction, a peek into major wine fraud

The interior of Premier Cru's retail store. Dan Clar Auctioneers will sell off the contents of the Berkeley business on Saturday. Photo: Frances Dinkelspiel
The interior of Premier Cru’s retail store on University Avenue in Berkeley. Dan Clar Auctioneers will sell off the contents of the business on Saturday. Photo: Frances Dinkelspiel

John Fox, the former owner of the wine store Premier Cru who has pleaded guilty to wire fraud, certainly lived the high life.

When he entered a guilty plea in federal court in August, Fox admitted he had stolen at least $20 million from his clients over the years by selling ‘phantom wine.’ He also admitted he spent $5 million of his clients’ money on race cars, nice homes, golf-course memberships, a college education for his daughter, and $900,000 on young women he met online.

Now, the contents of the Premier Cru office and warehouse at 1011 University Ave. are set to be auctioned off on Saturday, and they reveal other luxuries in which the 66-year-old man indulged. The auction, which starts at 11 a.m., will also provide the public a chance to peek at parts of Fox’s lifestyle. Previews are Friday from 10 a.m. to 4 p.m.

 Read the back story about Premier Cru on Berkeleyside.


The former wine merchant had a full-size workout room connected to his spacious office, complete with a treadmill, rowing machine, bicycle, weight machines and free weights. Fox also had a ProTee golf-simulator, worth thousands of dollars, that allowed him to practice his swing while looking at a wide screen and imagining he was on a world-renowned golf courses.

The contents of John Fox's gym, including his golf simulator and work out machines, will be auctioned on Saturday. Photo: Frances Dinkelspiel
The contents of John Fox’s gym, including his golf simulator and work-out machines, will be auctioned on Dec. 3. Photo: Frances Dinkelspiel

When he finished working out, Fox could go to his break room and treat himself to a cappuccino made on a shiny Italian Pasquini Espresso machine. That is, if he wasn’t tasting some of the world’s best wines. Numerous half bottles of wine were left scattered around Fox’s office, according to Dan Clar, whose industrial auction company, Dan Clar Auctioneers, is auctioning off Premier Cru’s contents on Saturday.

“It’s crazy,” said Clar, whose family once owned the well-known Clar Auction House in Oakland. Clar grew up in the auction business and learned how to auction off objects from his father, Harvey.

Fox, who owned a Maserati, a Ferrari, a Mercedes-Benz, several Corvettes and several racing-type cars during his lifetime, also left behind the wheels of a Ferrari F43, a Ford GT 500 hood and a 1970 Plymouth Roadrunner hood.

Dan Clar stands in front of the glassed-in vault that once help Premier Cru's rarest wines. Access to the room is via a thumbprint reader. Clar will auction off 2,500 wooden cases from wineries around the world, among hundreds of other items. Photo: Frances Dinkelspiel
Dan Clar stands in front of the glassed-in vault that once held Premier Cru’s rarest wines. Access to the room is via a thumbprint reader. Clar will auction off 2,500 wooden cases from wineries around the world, among hundreds of other items, but no wine. Photo: Frances Dinkelspiel

Clar expects that people with wine stores, wine businesses, or warehouses will be the most interested in the Premier Cru auction. He will be selling gorgeous wooden rolling wine racks, commercial wine display refrigerators, glass display cabinets, Riedel glasses and 2,500 wooden crates that once held wine from the best wineries in France, Italy, Germany and the United States. Some of the boxes came from Lafite Rothschild, Screaming Eagle, Harlan Estates, Louis Jadot, Opus One and many other wineries. The wooden boxes might fetch from $25 to $150 each, he said.


Some of the hundreds of empty wine bottles that will be auctioned Saturday. Photo: Frances Dinkelspiel
Some of the hundreds of empty wine bottles that will be auctioned Saturday. Photo: Frances Dinkelspiel
Wine-related items will be sold on Saturday. Photo: Frances Dinkelspiel
Wine-related items will be sold on Saturday. Photo: Frances Dinkelspiel
The wheels from a Ferrari will be sold. Photo: Frances Dinkelspiel
The wheels from a Ferrari will be sold. Photo: Frances Dinkelspiel

There are also hundreds of empty bottles of fine wine. The oldest is a Chȃteau Latour from 1865. Clar has enclosed that bottle in its own special glass-fronted case.

The interior of the wine store was spectacular with tapestries on the walls, mahogany shelves and a temperature-controlled area for the best wine. Access to that vault was via a thumbprint reader.

Clar said there are 11 French-made tapestries featuring medieval-era scenes. Fox paid about $8,000 for them, and Clar expects them to fetch a few hundred dollars each.

Clar will also be selling all the shelving that held Premier Cru’s wine, a forklift, several ladders, dozens of corkscrews, office furniture, computers, printers, and all the various components that make up a business.

But there won’t be any wine to buy. Premier Cru filed for bankruptcy in January, citing $7 million in assets and $70 million in debts. (This was before Fox admitted he was running a Ponzi scheme.) The bankruptcy trustee sold off 79,000 bottles that remained in the warehouse to Spectrum Wine for $3.6 million.


Clar said that, while the retail store was in good shape when he arrived about a month ago, the offices and warehouse were a mess. He had to remove truckloads of loose cardboard and Styrofoam as well as old, unsellable bottles.

Fox’s office, in particular, was a shambles, said Ellie Clar, Dan Clar’s wife. Fox had enclosed his desk by assembling filing and other cabinets right around the perimeter, creating a screen of sorts, she said. It meant it was hard to see Fox, but he could see others because he had two huge flat screens on the wall above the desk which beamed in images from security cameras.

“He had a lot of debris,” she said.

Fox is set to be sentenced on Dec. 14. For his crimes, Fox probably faces a maximum of six and a half years in prison and is on the hook to pay $45 million in restitution.

Fox started Premier Cru in 1980 in a storefront on Piedmont Avenue in Oakland, later moved to Emeryville, and then opened up a gleaming retail store in Berkeley in 2010. He did a huge amount of business on the internet, selling “pre-arrival” wine to customers who agreed to pay for wine up front, before it was delivered, in exchange for lower prices.

Fox said he first started cheating his customers in 1993 or 1994 when he created fake purchase orders for pre-arrival wines. Each year he increased the amount of phantom wine he pretended to order for his customers until it represented a “significant” amount of his business.

The wine Ponzi scheme started to unravel in 2015 when more and more customers complained that they had been waiting for years for their wine. Around 12 customers filed lawsuits seeking restitution, which captured the attention of the FBI.

Some of the clients Fox defrauded included huge names on Wall Street and in the tech world.

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See a catalog of what will be auctioned.

The public can preview the auction Friday from 10 a.m. to 4 p.m. Doors will open at 9 a.m. on Saturday and the auction will begin at 11 a.m.

Related:
Premier Cru owner used coffee shop as hookup HQ (08.18.16)
Premier Cru spent $900K on dates he met online (08.11.16)
Premier Cru owner will plead guilty to fraud (08.09.16)
How did Berkeley wine store accrue $70M in debt? (07.28.16)
Premier Cru lawsuit: Some customers to get refunds (06.23.16)
Bankrupt Premier Cru not run in ‘a reliable fashion’ (05.09.16)
Premier Cru owner had penchant for expensive cars (03.08.16)
Customers confront owner of bankrupt wine store (02.25.16)
FBI investigating whether Premier Cru ran a Ponzi scheme (02.22.16)
Troubles mount for Premier Cru as FBI steps in (02.11.16)
Berkeley’s Premier Cru paid its tech staffer in wine (02.04.16)
Shop Talk: The ins and outs of Berkeley businesses (12.22.15)
Berkeley store sued for not delivering $3M worth of wine (10.29.15)

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