Prosecutors contend that Hill, who ran the Hill Wine Co. on Silverado Trail, sold wine made from grapes produced elsewhere as genuine Napa Valley products. He also allegedly sold wine made from cheaper varietals as Napa Valley cabernet sauvignon, which can go for $100 a bottle.

The alleged scheme went on between August 2012 and December 2013, if not longer, and resulted in customers paying more than $1.5 million for fraudulently mislabeled wine, grape juice or wine products, according to the federal indictment. Since the customers believed the wine was made from Napa Valley grapes, they paid higher prices for it, the indictment asserts.

In addition to the Hill Wine Co., Hill also used winemaking equipment from facilities owned by the Ranch Winery in St. Helena and Carneros Vintners in Sonoma, federal officials said. According to the indictment, Hill moved the grapes between the three facilities in order to obscure their origin.

Hill is also accused of concealing the fraud by altering documents, maintaining false inventory records, lying to employees, and intercepting trucks shipping grapes and changing paperwork. He even instructed grapegrowers outside of Napa Valley not to tell anyone that he was buying grapes from them, the indictment alleges.