The Bourbon Community Roundtable #9 talks about the recent news of one man who has defrauded the secondary bourbon market with counterfeit bourbon. We wrap up the show talking about the Weller 12 craze.

Show Notes:

• The biggest reveal in secondary market history. A seller with 2+ years worth of building up sales reveals that he’s been counterfeiting bottles.
• Hear the story unfold
• How does this impact bourbon going forward?
• How do you trust you seller?
• How can you trust anything in bars?
• What has happened with Weller12? It’s madness

 

Transcript:

So on June 14th, the bourbon internet broke. I remember going to bed, looking at my phone and then not putting it down for almost an hour. This is a long story and we are going to break out the conversation based on the 3 segments of the story.

Part 1.

Here’s how it started. <accused individual. listen to podcast for name>, a longtime seller on the secondary market, has admitted to buying empty bottles on Ebay, refilling them, resealing them, and selling them as new. I’ll let the people who did the sleuthing remain anonymous and refer to them as A&A.

<accused individual. listen to podcast for name> had provided elaborate excuses, claiming he had bought a number of what-he-thought-were-real bottles from a man from Chicago, now un-findable, in two deals that went down in Indianapolis in January.

After letting him toil over it for two days, A&A had all their direct evidence ready. It was presented  to <accused individual. listen to podcast for name>. A&A had his ebay account, the empties he bought, and photos of the exact same bottles now “full and new” owned by his unsuspecting customers.

<accused individual. listen to podcast for name> first denied everything, but eventually confessed. He intentionally defrauded people, and frankly, A&A had planned to tear him apart in public. Instead, A&A spent hours talking with him, trying to figure out what he should do from here. <accused individual. listen to podcast for name> has offered to make things right as best he can. He has already issued some refunds and says he will do so for anyone else who received a fake. He asks that his family won’t be harassed, his property damaged, his business destroyed, and whatever other retaliatory acts people may be contemplating.

As it turns out, dozens of the empties he bought are actually sitting on his home bar, refilled but open, to show off to guests as bar stock. A&A  asked him to destroy those and provide proof.

A&A asked Don’t panic over every bottle you have. The market itself is still by and large trustworthy. If you have a bottle you bought from <accused individual. listen to podcast for name> within the past 6 months and it has a wax or plastic seal, or just a plain tax stamp, it may be fake. He did sell mostly real bottles. All bottles prior to 2017 seem to be ok at this point. A&A have been working with him to verify individual bottles he faked.

You have to know that <accused individual. listen to podcast for name> had been selling bottles consistently, every week for years. He had mules at Liquor Barn raffles, willett runs, and paid people to stand in lines. Rumors began swirling that his sales were in upwards of $100k. Of course and without question, everyone began questioning their previous purchases. In the span of 48 hours, people were looking at bottles such as their 4R Small Batch LEs and noticed that the film seemed off, like it was done with a hair dryer. Others brought out their tax stamped bottles and there was even a rumor that he went as low as counterfeiting a Lost Prophet orphan barrel.

1. So before we get into parts 2 and 3 where he digs himself deeper, the community went up in arms and were asking for his head. Blake what was your initial impression?
2. People were wondering, is it even possible to take it to the authorities for grand theft and fraud, from a legal standpoint, Brian does that sound like a dumb idea?
3. Do you all think it was a wise choice to not outright viciously attack him and his family and business?
4. People believe he is only sorry he got caught. which is probably true
5. Here’s the thing, this guy didn’t look like he needed the money. He has pictures from courtside games, multiple Super Bowls, drove a really nice car. Was it greed?
6. I wonder if WIllett raising prices is what made him go chris route. Because he was like the walmart of bourbon on the secondary market. a $120 bottle he would sell for like $180 or $160. after shipping that’s like a $40 profit. didn’t make sense.
7. Something should have been up when there are rules in place in some forums that say you can’t delete a post. However, his were always deleted.
8. The real question is, what as he refilling them with?

Part 2.

Within 24 hours, he shut down his Facebook account and people started blasting his business on Yelp, Facebook, and Google. The business took down their Facebook pages and it didn’t take long to find his home address since he shipped so many packages. Not to mention the Yelp rating went down to 1 star almost immediately. A&A started the refund process that involved <accused individual. listen to podcast for name>’s cooperation. <accused individual. listen to podcast for name> also has a full statement to make to apologize to the bourbon community. The community was in an uproar and wanted his head on a silver platter. A&A insisted they are not going soft on him. We’re being practical, level-headed, and extremely wary. <accused individual. listen to podcast for name> asked that everyone stop retaliations against his business and family. Those that had posted public messages about him, <accused individual. listen to podcast for name> asks that you remove them. He knows you’re beyond furious and this will all be addressed in his statement. A&A said Immediacy is not the priority. Accuracy and thoroughness is. Again thanks for your cooperation, understanding, and patience.

1. Did deleting his Facebook account really help the situation?
2. How many bar and liquor stores could be scammed by this going forward as Louisville passes the new vintage spirit bill.
3. If he wanted his business spared, perhaps using that business email address to conduct illegal and fraudulent sales was a terrible idea. He misused business resources to break the law. HE would do well to keep that in mind before making demands.
4. Is he in a position to make demands? I mean i guess he still has the upper hand after all
5. Did any of you all buy bottles from him?
6. At this time, it was rumored that the local news caught wind of the story but it never aired. From a slander point of view, is this something that could have been broadcast on public airwaves?
7. To salvage his family business, <accused individual. listen to podcast for name> went on yelp and said “there are some people out there trying to destroy “our business” reputations by making false accusations. We have been in business since 1956 & our track record speaks for itself. We helped hundred of families buy and sell their home. our business was built around service and integrity”. That takes some balls, no?

Part 3.

<accused individual. listen to podcast for name> releases his statement. A&A say <accused individual. listen to podcast for name>’s statement is entirely him. What you see here is entirely A&A. A&A presented facts, not passing judgement or offering opinion, so please recognize this as such. A&A is not “representing” <accused individual. listen to podcast for name>. A&A We’re trying to track down fakes and get restitution to those defrauded.

A&A isn’t the law or the government. A&A did this for the benefit of the community and because of our interest/expertise in counterfeit collectible whiskey. <accused individual. listen to podcast for name> has so far refunded 9 people since this was uncovered, and has worked with a 10th to agree on a payment plan for a larger multi-bottle purchase. A&A can confirm that <accused individual. listen to podcast for name> is working to repay all who received fakes. He has to pull together the finances. Restitution to all who received fakes truly does seem to be his goal, and achievable, though it may take him some time. That is A&As feeling at this time. A team was assembled to review fakes (and that team is highly regarded in the community for knowing vintage bottles) and restitution comes directly from <accused individual. listen to podcast for name>. At this point, A&A has confirmed with  about 30 fakes. 24 were traded/sold and 6 were at his home “sealed.” Another couple dozen or so “open bottles” (i.e. refilled but not resealed) were also on display as stock in his home bar. He also bought a small number of red and green tax strips.

Total value of fakes sold is currently estimated at $16k. This may rise to $18k-$20k. Number of victims is about 20, which may rise by a few.

The uncertainty is because <accused individual. listen to podcast for name> is often inexact and hard to pin down on details. He has been cooperative yet sometimes evasive and/or unavailable.

A&A did not suspect this was of a significantly larger scale.

To help identify fakes/empties/refills, A&A’s MO commonly included asking <accused individual. listen to podcast for name> questions that they already knew the answer to. For instance, when <accused individual. listen to podcast for name> first sent us his statement, it claimed he didn’t fake anything prior to 2017. A&A knew this to be untrue, although the vast majority of fakes were made in 2017. When A&A finally confronted that untruth with evidence to the contrary, <accused individual. listen to podcast for name> revised the not-before date to November 2016.

A&A confirms that <accused individual. listen to podcast for name> was buying empties on eBay as early as November, 2016. At this point no evidence has presented itself that he made fakes prior to then.

I think this is where it gets funny. <accused individual. listen to podcast for name> destroyed the open “fake drinker” bottles he still had. He provided “before” pictures as well as a video of him smashing them.

Since A&A recognized this as a dangerous task, they reminded <accused individual. listen to podcast for name> to wear protective gear, gloves, thick clothing, eye protection, etc. <accused individual. listen to podcast for name> chose to wear no protection. He ended up in Urgent Care with injuries to his hand and foot.

This is included as an example of one of the many challenges that caused continued delays and frustrations.

A&A concludes they are not here to “let him off easy.” They are not trying to keep this “away from law enforcement.” They have asked for your patience and cooperation in what has been a very difficult, intensive process.

Here’s <accused individual. listen to podcast for name>’s Statement:

“I want to formally apologize to everyone affiliated with these groups.  This was without a doubt the dumbest thing I’ve ever done in my life & it’s something I have to learn & live with.  I understand that admitting my faults & working to make each one right will never be good enough.

With the exception of my brothers death this is the hardest thing I’ve ever had to go through in my life.  Many innocent people that I’m close to are now being negatively affected by this.  I would ask that people focus their hate on me instead of my family or businesses I’m associated with.

The problem I’m faced with now is that I was a very active seller in these groups for the past couple of years.  I checked my Fedex account & I shipped over 1200 packages in 24 months.  77% of these packages had more than one bottle.  Now everyone I’ve ever sold to thinks they have received a fake bottle & I completely understand why.  98.6% of everything I sold was real.   I’m hoping that people will soon see that to be true.

What I did was wrong & by no means am I trying to justify my actions in this message.  I’ve worked with others to confirm fake bottles with whom they went to along with a plan on how they will be paid back.  I have destroyed any fake bottles that I had in my possession.

The list of fake bottles isn’t nearly as long as many of you may think. Some of you have already received refunds & others I’ve been in contact with & committed to a date which they will receive their refund.

I would please ask that you remove all the public messages about me that have been posted.  People are posting negative remarks about my company all across the internet.  Doing this affects too many innocent people.  I know many of you want to destroy me & reading this message may make you hate me even more.   For me to be accused of selling 10s of thousands of dollars of fake bourbon is crazy.  I’ve seen some reviews where I’m being accused of selling $100s of thousands in fake bourbon.

I would like to apologize for my yelp post.  I was trying to defend the business itself & not my actions.  I can see how that would have been misinterpreted.  I have removed that post.

Telling the truth comes with many consequences which I’m fully prepared to accept.  However, this situation has snowballed & has gotten extremely out of proportion.  I’ve had countless threats mainly from people that I did nothing to.  The few guys that were directly impacted by this have been the most forgiving.  I’ve never really been a religious person, but this has made me look to God as I don’t know what else I can do.  I’m praying everyday & hoping that people will view me for how I handled this as supposed to what I have done.

To the guys that did receive fake bottles.  I want to assure you that I will make this right.  There are no words that can explain how bad I feel about this.  It will not do any good to post the factors that led to me doing this.  The bottom line is it was wrong.

I built *allot* of good relationships over the last few years with allot of you & now those relationships have been destroyed.  For me that’s the my biggest lost.  Many of you defended in a time of need & I let each & everyone of you down.  This most of all is what I’m having a hard time dealing with.

The guys in these groups share a special bond that I can’t describe.  It was this bond that made these groups so enjoyable to be a part of over the last few years.

I could have easily denied all of these allegations & just disappeared, but in order for me to clear my conscious I have to make this right.  There is no doubt that this the biggest mistake I’ve ever had to fix in my life.

I want to emphasize that I am going to complete the refund process.  I want this over & I couldn’t imagine how bad it would get if I say I’m going to send refunds & I don’t come through.  If I didn’t plan on paying anyone back I wouldn’t even bother responding to the messages I received.  I wouldn’t bother cooperating in general.  I just wanted to make that clear.

My goal is to have 100% of the refunds completed by 4th of July.

So just to clarify so there’s no confusion.  I’ve already refunded 10 guys.  The remaining few will get refunds by next Friday. I have a plan in place to make this happen.

In closing I hope people use this as an example of what not to do.  I really enjoyed getting to know many of you & will miss being a part of the community.  You will never see me in the years to come sell another bottle of bourbon.”

In the hours that followed, there was a new 5Star Yelp review by Cliff B saying “the negative reviews are the furthest thing from the truth. <accused individual. listen to podcast for name> is a very respected agent. Looks like to me a bunch of drunk bourbon members have too much time on their hands. I speak for *allot* of people when i say you will always have our respect.” This is was easily ousted as a fake review because he misspelled the the word “a lot” once again. And the memes continue from there.

1. I wish we could see the bottle smash video!
2. Do you think the apology letter was sincere?
3. So what’s the verdict, do you really think we are only looking at $16k-20k or is it still a very shady situation? I mean 30 out of 1200 packages.
4. Once the payments are done and restitution is complete, what happens? Are the flood gates open?
5. How is this going to change the secondary market going forward? What provenance do you have to make up to know the history of bottle acquisition?

 

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