Premier Cru Boss Takes the Fifth

Feb 21, 2016

(Wine-Searcher) - The FBI investigation into a Ponzi scheme at the Berkeley retailer could impact owner's own legal troubles.

The owner of defunct Berkeley wine business Premier Cru could find his own personal bankruptcy proceedings delayed as an FBI investigation causes him to take the Fifth.

John Fox filed for bankruptcy not long after his failed wine business went under, with $70 million owing to more than 9000 customers for undelivered wine. In his personal filing, Fox claimed his assets at less than $50,000 with debts of $50-100m, but his lawyer has said that the investigation into whether Premier Cru was simply a giant Ponzi scheme would interfere with the personal bankruptcy.

"The ongoing criminal investigation of (Fox) is impacting (Fox's) ability to timely assemble and provide the information necessary to complete his Schedules and Statement of Financial Affairs," attorney Eric Nyberg said in the Contra Costa Times. "In addition, (Fox's) counsel needs to work through issues with (Fox's) attorneys representing him in connection with the criminal investigation, as they relate to the debtor's Fifth Amendment rights."

The Fifth Amendment can be invoked to avoid incriminating oneself and Fox's desire not to do that while a federal investigation is ongoing means he may be unable to file his personal details promptly.

His lawyer is seeking an extension of the filing date for documents relating to his personal bankruptcy.

Premier Cru made its name selling fine wine at rock-bottom prices, with the bulk of its business online. It targeted high-net-worth clients and some of those who bought from the company bought large – Arthur Patterson of Accel partners spent more than $800,000 with Premier Cru, according to court documents. However, signs of unrest among customers emerged as early as 2009 and the increasing level of dissatisfaction reached a head in January, when Premier Cru filed for bankruptcy.

It is unlikely that customers will ever see the wine they paid for, and most will not receive more than a token repayment, if that.


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