The Future is Now

Most of the wines in the 1855 Bordeaux Classification are pre-sold to consumers in the futures market. The system is simple: Bordeaux wines sold as futuresbuyers receive a discount on the wine in exchange for pre-paying the full amount in the spring or summer following the harvest. In many cases, the wine won’t be released for another 18-24 months, but the cash flow allows the chateaux to finance the cost of barrels, labor and storage; the price of futures goes up as the release date approaches. Merchants are allocated quantities of futures contracts based on their past purchases.

When the system works well, everyone is happy. In an excellent vintage, many consumers have made handsome profits on wines that are highly rated and in short supply. Obviously, the reputation of the merchant is crucial. Customers need to have a reasonable belief that the wine shop will still be in business two years hence to deliver the goods.

California’s Premier Cru, founded in 1980 by John Fox, was a major player in the futures game. Fox became hugely successful by offering prices that undercut virtually every other store in the country. By 2011 he was able to move the business from Oakland to lavish headquarters in Berkeley, decorated with tapestries and custom furniture.

There was only one problem: Fox was conducting a massive Ponzi scheme. He collected money for futures but never purchased any wine at all, focusing instead on buying real estate and exotic cars, and spending large sums on young women he met online. Between 2010 and 2015, it’s estimated that he collected close to $45 million for phantom futures contracts.

Several weeks ago, Fox was sentenced to 78 months in federal prison and ordered to pay restitution to his customers. Given his age (66) and his financial situation (bankrupt), the victims aren’t likely to receive much. He was initially facing a 20-year sentence, but bargained the time down by informing on one of the women with whom he had been involved. A young lady named Seul Ki Yum had been blackmailing Fox and numerous other men by threatening to expose them to their families, and he agreed to cooperate in her prosecution.

The morals of this story are obvious. Know your wine merchant; if something is too good to be true, it probably is. And perhaps there’s a glimmer of hope: Fox intends to take computer science courses in prison, so he can start a business when he’s released, become a billionaire, and pay everyone back.


Mark Spivak is the author of Iconic Spirits: An Intoxicating History (Lyons Press, 2012) and Moonshine Nation (Lyons Press, 2014); his first novel, Friend of the Devil, is now available from Black Opal Books. For more information, go to

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