A 26-year-old man was arrested and released on bail in connection with a possible wine scam in the United Kingdom on July 20, after Kent Police raided two warehouses in Horsmonden and Brenchley, seizing 217 pallets of goods, including tens of thousands of bottles of wine—all believed to have been fraudulently obtained from at least 20 foreign businesses, including wine producers. In this incident in Kent, a large amount of wine was recovered, but all too often wine frauds go unsolved, resulting in costly losses for producers who’ve been duped.
A Tale of Two Scams
In wine scams in which producers are the prey, fraudsters commonly seek to obtain wine through identity theft. In late November 2016, Azienda Agraria Moretti Omero, an organic producer in Montefalco, in Italy’s Umbria region, received an email purporting to come from “David Jones,” sales manager of Waitrose, a U.K. supermarket chain. “Jones” claimed that he was interested in Morettis products and that he wanted to develop a commercial relationship with the winery. In the email, “Jones” asked Moretti to send the winery’s price list and catalogue, which the producer did.
There were a few clues in the initial email that it was not from the real David Jones, who has worked at Waitrose for a number of years and is the supermarket’s supply chain director. For example, the email address used was spelled “Waitros,” not “Waitrose,” and no landline was listed, which is highly unusual for a large company like Waitrose. Furthermore, a company like Waitrose wouldn’t conduct such a crude phishing expedition for wines to list—and they’d certainly want samples to taste as part of their selection process. The false Jones didn’t ask for samples. But after inquiring about prices and availability in December 2016, he did place an order in early January 2017.
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Although flattered by the presumed attention of Waitrose, Agraria Moretti Omero’s staff had their doubts. Fortunately, they checked with a journalist friend who advised them against fulfilling the order, since it was likely a scam.
“I just found out [it was] a big fraud,” says Giusi Moretti, daughter of the estate’s founder. “They give you the correct fiscal address but an incorrect delivery address, which is not a Waitrose property.”
Another recent victim of a similar scam, a long-established Bordeaux négociant who prefers to remain anonymous, was not so lucky. The négociant—referred to here as TP—sent seven pallets of wine worth €10,000 ($11,363) to the U.K. that were diverted and have disappeared without trace.
In March 2017, TP received an email—in all capital letters—asking whether an order could be placed. TP’s managing director explains: “The email purported to come from Vrais Bouteilles [name changed to protect legitimate company], a small chain of wine merchants based around Grenoble, France. We had supplied Vrais Bouteilles in the past. We made credit checks on the company, as well as checking company and sales tax numbers, along with the name of the manager of the wine merchant. All appeared satisfactory.”
However, TP didn’t notice that the fraudsters were using a Gmail address, whereas the company’s actual email address incorporates its name. The contact numbers given by the fraudsters included a landline and fax as well as a mobile number. (Because it is quite common for perpetrators of these scams to give only mobile numbers, a mobile number on its own should be considered an immediate red flag.) However, TP learned later that both the landline and fax numbers provided were bogus numbers—not those listed for the wine merchant.
One way that French producers can suss out fraudulent phone numbers is simply to Google them or check directly on Les Arnaques par Téléphone, which is a website dedicated to stopping scams by phone. Had TP searched Google for Vrais Bouteilles’s French landline number, they would have found that it had already been identified as fraudulent on Les Arnaques par Téléphone. TP would also have discovered a warning posted in January 2017 that fraudsters using this number had “ordered a number of pallets of wine.”
TP missed other warning signs as well. Vrais Bouteilles wanted the wine to be delivered to London City Bond (LCB), a leading and legitimate U.K. bonded warehouse, which surprised TP’s head of sales. But a phone call reassured TP that it was the correct destination. The scammers also gave the correct address for LCB’s head office, but subsequently gave several different addresses for the particular LCB warehouse to which the wine should be sent. All of these addresses turned out to be false.
Finally, the fraudsters used time pressure to speed the delivery. On Tuesday, May 9, they claimed that the wine was needed for a cruise that was to start the following Sunday.
The consignment of wine was duly picked up as arranged by the fraudsters, but before it reached its destination in the U.K., the driver was contacted on his mobile and told that the wine should now be delivered to an alternative address; the driver complied.
In the meantime, the bank transfer that was to pay for the wine in advance didn’t clear, and when TP contacted Vrais Bouteilles, the négociant was told that Vrais Bouteilles hadn’t placed an order. TP has been unable to trace the consignment of wine.
David Richardson, the fraud expert at the U.K.’s Wine and Spirit Trade Association, advises producers who receive unsolicited emails purporting to come from a leading wine company to think carefully about whether a major supplier or leading supermarket would conduct business in that manner.
Once a producer has fallen for one of these distribution scams, the chances of retrieving the wine are usually slim to none. To date, I know of only one successful prosecution, in February 2009, when 43-year-old Dogan Arslan, a North London fraudster, was sentenced to four and half years in prison for a £500,000 scam that targeted French producers.
Wine producers must remain vigilant about checking merchants’ contact details to determine whether their emails and offers to buy are genuine. VAT and company details will almost certainly be correct, as well as the name of the person whose identity has been fraudulently used. The contact details, however, cannot be correct—the scam wouldn’t work if they were—so phone numbers and email addresses must be carefully inspected. Producers should also be on the lookout for telltale signs of phishing scams, such as obvious spelling errors (especially in company names) and emails written in all capital letters.
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Jim Budd, who divides his time between London, the Loire Valley, and Lisbon, has been writing about wine since 1988. He has been a contributor to many magazines and blogs at Investdrinks-blog and Les 5 du Vin. Jim is also the former chair of the Circle of Wine Writers, a former editor of Circle Update, and has been regional Loire chair for the Decanter World Wine Awards since 2004. He earned IWC Personality of the Year in 2012 and the 2012 Born Digital Wine Award for the best investigative wine story. Follow him on Twitter and Facebook.