(CNBC) Americans spend $60 billion a year on wine according to the Wine Institute.
Wine merchant John Fox, profiled on the next “American Greed,” saw that as an opportunity for fraud.
His business, Premier Cru, was a $55-million Ponzi scheme, selling “pre-arrival” wine, wine that’s been bottled but not shipped. Much of the wine wasn’t his to sell, and customers lost out.
Now, Fox is aging in prison after pleading guilty to fraud.
Pre-arrival wine is one type of pre-sold wine. There’s also wine futures, where you buy the wine before it’s even been bottled. Both can be good ways to secure the bottle that you want, but do your due diligence to make sure that your broker is trustworthy.
Wine expert Maureen Downey suggests you check your vendor’s business license and their track record on wine collectors’ message boards.
“If a lot of other people have had a bad experience or difficulty getting the wine they’re asking for…that’s a huge red flag,” Downey says.
The negative reviews are the most important. Fox was able to keep selling because he had influential buyers defending him.
“The vendors will always take care of certain people, so that those people will go out and say that the vendors are great,” Downey explains.
Pre-selling wine is legal, but it’s largely unregulated, so be as discerning about your vendor as you are about your wine.