Ep. 268 Maureen Downey (Chai Consulting) on Combating Wine Fraud

This episode of the Italian wine podcast is brought to you by the new book, San Jose, Lambruschco, and other vine stories. Researchers Atilio Shenza and Cerrenne Macio, explore the origin and ancestry of European great varieties in a tale of migration, conquest, exploration, and cross cultural exchange. Hardback available on Amazon in Europe, Kindle version available worldwide. Find out more at Italian wine book dot com. Italian wine podcast. With Italian wine people. Hello. This is the Italian wine podcast with Me Montewood. My guest today is Maureen Downey. Founder of the San Francisco based, shea consulting, and that's it. It was a great interview. It was really nice too. Well, thank you so much. I'm out. Go on. What is what is shea consulting? And what is So Shake consulting is a company that I started back in two thousand and five after having spent a couple years, working in auctions and realizing that what consumers really need is just a little bit of of qualified advice. So, while in auctions, I had I had already gotten the bug for spotting counterfeits. But what I really wanted to do was go to work on behalf of not not the the vendors and the the auction houses, but the the individuals. And over the last Just stop at a store space at there. Well, you know, what a lot of people just need is some advice about what they should be selling and what they should be buying. And, you know, it's, it's not always in their best interest to have an auction house or a vendor come in and tell them what they should sell. You know, when people buy a wine on a special trip to Italy or because it's their anniversary year, I think they should drink that. It may be valuable, but, not everything in life can be you know, had a dollar sign put on. I think there's some intrinsic value. And a lot of times what people need is just a little bit of a, you know, it's okay to do that. It's okay to keep that special bottle and you know, remember your husband or remember an anniversary or remember a special trip. So that was always a really important, aspects to me. The the other part being that, I think that a lot of times consumers get taken advantage of by the industry. We, you know, the wine and spirits industry is the most opaque industry in the world. There's very little truth. There's very little real information. And and everybody has to rely on trust. And unfortunately, not all vendors are, are are worthy of that trust. And some do a bad job, not because they mean to, but because they're not qualified to be doing what they're doing. So I wanted to go to work on behalf of of collectors and make sure that their best interests were being looked after. So what was going wrong in the industry specifically? And what and what time what time were we talking about? So this is sort of fraud or counterfeit wind things started kicking off. This was back in, you know, I started working with collectors in two thousand. And by two thousand and five, I had realized that, that there was just not a lot of info of of highly informed, people out there. There were a lot of people with money. But, you know, these are people who are oftentimes captains of industry, and they don't have the time to become experts, in in in all aspects of wine. And, you know, traditionally, there was a relationship between a merchant and a and a client, and that and that merchant would almost act as a mentor teaching the client about wine over the course of several years. And with the rise of technology, what we've really seen as a move away from that kind of traditional relationship And you have a lot of people who have a lot of access to information. Everybody's an instant expert. The role of the vendor has changed where, you know, we no longer have a couple of very big vendors who take things very professionally and seriously, you know, have a whole world of, you know, black market brokers who often don't even ever see the wine that they're trading. They trade emails and collect money. So what I saw was that there were there was a need to step in on behalf of these people who really wanted to make sure that they were getting authentic wine of good provenance, and that when they did decide to liquidate or they did have to liquidate because of death, disease, divorce, debt, all the deeds that cause people to sell wine, that they were looked after in a in an appropriate way in in that sit situation as well. Okay. So So that was starting roughly when. Two thousand and five, I started Chey Consulting. And, the ramp up of counterfeit wine was really it was at a it was at a pretty strong point by two thousand five. We were aware, abundantly aware of of counterfeit wine in the wine industry. As of two thousand to two thousand and two, two thousand and two was the first time that I that I called out, specifically John Cape Bon at Acramarily Condet Rudy Curniawan and Eric Greenbergberg as being people who were involved in the sale of of counterfeit one and and knowingly so. And of course, Rudy wasn't arrested until twenty twelve. But, by by two thousand four, two thousand five, it was a known fact within the fine wine industry that Rudy Cranilla won and John Capon and Eric Greenberg, and a and a couple of other of their colleagues were up to no good. The press didn't cover it, because the press wanted to go to the big parties. And if they had covered it and exposed the fraud and protected consumers the way they're supposed to, they wouldn't have been got they would not have gotten the invitation to the next DRC dinner, and they wouldn't have been able to drink the next fake nineteen forty five Rominae Conte that Rudy opened. So there was no, there was no coverage. And at the time, it was really frustrating for me because I continued to hammer on the fact that this was going on. And, very few people in the industry took me seriously. Janis Robinson in two thousand and seven finally took me seriously and and and wrote an article about it in the Financial Times. And then in two thousand and eight, Rudy had that Ponceau sale at Acar where, Laurent Ponceau had to show up at the sale before John Capon would pull the counterfeit wine. If if if Laura Ponce had not shown up, John Capon would have sold it. It was not on the Arada sheet, the addendum sheet. It had not been withdrawn from sale until he did so at the podium. So, you know, the shenanigans just kept going. That the wine that was actually never made? Ponceau actually never made this wine. Exactly. And and Laurent Ponceau had called John Cape on to say, you can't sell this and John had said, yeah. Okay. But Ponceau got a very strong impression that Capon had no intention of pulling the hundreds of thousands of dollars worth of line, that Ponceau had pointed out. So he showed up at the sale. And it wasn't until somebody told John that that Ponceau was at the sale that that they withdrew the wine. It's it's, it's actually worse than that. There were some of the bottles were actually in the room to encourage bidding. So, Yeah. The cat the carrot, Dankton carrot. Exactly. Exactly. So You know, the those kinds of shenanigans unfortunately didn't stop after the Ponceau sale. You know, Christie's and and Charles Curtis, who was at Christie's at the time, and Richard Briarley, and a number of other people who continue to be, you know, successful in the line and We're we're happy to continue to sell Rudy's wine. And, you know, right up until Rudy was arrested, there were still people who were willing to to work with him and sell his wine. And, you know, I was at the the trial every day, and I can tell you Rudy did not put on a defense. So a lot of us believe that there is a a large amount of hush money awaiting him in Hong Kong when he gets out in, in just a few months now. From To not to not rat on his. Correct. Yeah. Colleagues. Correct. He was in jail for quite a long time before the trial started because they the DOJ had actually wanted Rudy to roll on some of his co conspirators who they thought were benefiting from the fraud a lot more than Rudy was. So if you look at it this way, Rudy is currently in jail, you know, as an indigent, illegal alien, and there are people who have made tens of millions, if not hundreds of millions of dollars off of his fraud. The government was was highly interested in going after those people. But in order to prove fraud, you have to prove intent. And they had so much perfect evidence on Rudy without Rudy rolling on those other people, then you couldn't prove the intent. Right. Do you think they're ever gonna be brought to book these people? I think that crooks are crooks and crooks have a way of thinking that they are. I think there's a there's a pathology there where, you know, they believe they're above the law. You know, these are a lot of these people are heavily into drugs and prostitution and and other things that that kind of tell you that they believe they are above the law. The law does not apply to them. And so I don't think that they'll necessarily be brought down for wine fraud, but they will eventually get caught for something. Yeah. We'll get right back to the Italian wine podcast after a quick reminder that this episode is made possible by the book San Jose, Lambrusco, and other vine stories available on Amazon in Europe and Kindle worldwide. I know if I'd have done what you did, I probably wouldn't be sleeping at night. I'd be really paranoid about somebody coming after me, or not even just one, just others more more than one coming after me, even the fact that the majority seems of the people involved in the fraud and male, and you're obviously a female. And that, you know, just the male side would be make them even more angry than they got done by a, an investigative woman of that. How dare a girl ruin the party. Right? Exactly. So you know, how Especially with this misogynistic crew that think that women exist for their pleasure. And I here I am, you know, pissed on a campfire, I like to say. But how do you I mean, how do you sleep easy? You know, I sleep easy because I know that I've done the right thing. I'm driven by integrity and and doing the right thing. And, you know, there is a reality that I have been physically accosted. I've certainly been verbally accosted. I was you know, attacked online for ten years when I was one of the solo voices saying that this fraud existed. But I I I held firm. You know, there was even one point when my family said, you know, you gotta let it go. Nobody cares about this fake wine stuff. And I was a little bit stampy and said, no, because it's wrong. It shouldn't happen. But it it has occurred that I've been physically accosted. And now when I go to big tastings, I often do have to take a bodyguard because, I, you know, I just don't need to get beat up and address. So it's it's it's unfortunate, but it's the world that we live in. And I am a little bit more cautious than probably most other people are in, in public spaces because I'm aware that even though there are a lot of people that are very appreciative about what I've what I've done and what I've exposed and what I continue to do, there are also a lot of people who are very unhappy with me. So I need to I need to be a little bit, wary of of public interaction sometimes. It's terrible, though, isn't it? I mean, I can see why these these are these are, you know, criminals who stop at nothing ruthless, you know, scumbags, basically. I actually went undercover for the FBI once and, it was, you know, and when I in talking about it, I worked very closely with the FBI. Do you have a wire on me as well? I did have a wire on me at that time. And, you know, I I work with I've been working with it with a couple agents since two thousand and eight. So, you know, in talking about it, I didn't think anything of it. And then when the day actually came and they wired me up, and there were multiple carloads of FBI agents in flat jackets, and they all had their guns and stuff. I was like When you were there in your t shirt. Yeah. I was like, god, this this is a big deal. You know, and there was a safe, you know, there was a passcode where if I had said a certain thing they would have stormed the building. Safeway. Yeah. What was yours, Patrice? Is that right? Bill's not gonna like this? Those those those fez they got, they got a good set to you. Yes. Okay. So, how do you spot a fraudulent wine? What what are the things to look for? So the there there are two main things that that people need to understand about that. Number one, there's nothing that we can do from a photograph. So people are always sending in photographs and saying, oh, what do you think about this? There's nothing I can do with the photograph because We need to actually physically inspect the entire bottle. And we do so forensically. We we we we have to use our eyes, we have to use our hands. Sometimes you have to smell it to see if it's been falsely aged in coffee or tobacco or tea. But it's it's really kind of more like looking at a piece of art. So it's a combination of low tech and high-tech. You know, logic, pattern recognition, knowledge. We have an immense database that that we utilize. And we've built a software system now to go along with our our anti fraud solution, the Shea Vault, which authenticators can use. And then we use a lot of of more high-tech, you know, microscopes and different types of lighting to look at the different chemical compounds and, of paper glass glue. So there's a there's a forensic component. There's a high-tech component. And then there's a very low tech component that just comes down to logic. Yeah. I mean, it's, your toolbox is is, stuff that I would just never have thought of under the glue for the label. I mean, of course, that's a glue, isn't it? I mean, it's like a DNA almost. It it actually and it does it does two things. It can tell you where the, glue was assembled, how the glue was assembled, or, you know, put on the bottle, and more importantly when. So it we can date glue very easily. By doing some certain inspections. You know, so if a bottle is supposed to be from the nineteen forties and it's got glue that would not have been possibly produced until probably the nineteen seventies, you got an issue. So I often like to say that it's like looking at, you know, a person that has a twenty five year old face on a seventy five year old body. You know, there's been some work done. So Yeah. It's our job to figure out what that is. So I remember writing a book and having to contact, I mean, I'll name it Domaine Delaromone Conte, some original labels that for the photograph for the book. And I got a very nice email from Albert Davilen. He said, no problem. I'll send you that I was, do please send them back to me. Of course, I did send them back. And, and you think it's so funny, you know, it's like, for me, it's just a label for a book, a piece of, you know, that no one's gonna read. But for you, it could cost you a lot of money in terms of reputation because bottles of wine that are filled with beetroot juice of posing as DRC. Well, and if you look at, you know, the way the technology is today, you could take that label and, you know, scan it and put it into a computer and turn it into, you know, ten thousand bottles. You know, that would give you everything that you need to to know. So, it's very important that those things not get shared. And, you know, that's why there's such a a huge market for empty bottles, say, on eBay and things like that. So Wow. Yeah. It's kinda sad that we have to think like criminals, but but we do. And so, you know, we spend a lot of time trying to stay a step ahead, and that's you know, that's Can you do that? I mean, what is the next step ahead that you gotta think about? What do you got? Have you got up your sleeve? What's the next area of weakness for the fine wine trade? Well, so one of the things that I think that's happened recently that's really sad. It was done in the proper spirit. But there has been a move away from plate press, traditional plate press printing, and some of the more traditional ways of of making, producing the actual bottles, towards more high-tech ways of digital printing, that people can use anti fraud and they could print invisible ink. Unfortunately, counterfeiters can also print digital ink, and they have already started counterfeit printing all of these cosmetic solutions. So recognizing that cosmetic solutions are not a long term fix. Recognizing that most of the solutions that are out there today, are only solutions at the at the vintage level, not at the bottle level, and that they do nothing really to inform a consumer about the authenticity of a wine before they purchase it. We came up with my my team and I have come up with over the years, a solution that we're calling the Shea Vault. So Shea, of course, means cellar, vaults. It's a digital vault of of your cellar. And what we do here is, we layer on top of anything that a producer's already doing. But I because I believe any solution needs to be layered. Anything that's that's that's one layer is not enough. Just having invisible ink on your label, means that somebody could refill the bottle and substantiate the bottle. Just having a proof tag doesn't stop somebody from core of ending a bottle and refilling it. And furthermore, both of those things mean that you have to be in front of the bottle in order to prove that it's authentic. Almost no wine currently gets purchased in proximity to the bottle. Almost everything gets purchased online via auction as futures. So we wanted a solution that would empower consumers to know, and vendors as well that they were purchasing authentic bottles. And the other thing that's really important is is provenance. Because an authentic bottle that is is poor provenance, is just as bad sometimes to the producer as a counterfeit bottle. Anything that shows poorly is not good. So we have created the solution such that, online prior to purchase, somebody can view a ledger of authenticity and provenance that is blockchain secured, which tells them the known provenance of the bottle and that it's been authenticated. It's got a picture of the actual bottle, the condition of the bottle at that at the time of sale. So whenever the bottle is presented for sale, and the signature of the authenticator who authenticated it. And that person is personally taking responsibility for the authenticity of that bottle. So currently, those signatures would be myself, Siobhan Turner and and Hugh and Hugo O' doubt from my team and a couple of the other authenticators that have already passed our authentication training like Demona Young and in Hong Kong and Ettien Pompier, just outside of Geneva in France. So So how long does it take to to get if I would sign up to the course, how long would that take me to to it would depend on you. So Sivonne Turner, who was the executive director of the Institute of Masters of Line, for, I believe, eight years before she joined us, invigilates the program. It's eight online modules, which are about three hours each of presentation, a number of assignments and whatnot. At the end of a module, you'd have a a conversation with her to make sure that you understood everything, and it also gives the trainee an opportunity to ask questions. And then there are two different times, where the trainees have to work with us in a real life setting for, like, a week. So if they have a venue, we'll go and authenticate for them. But it's really a lot of hands on and, you know, there needs to be as it's it's as much art as science. So there needs to be logic. There needs to be pattern recognition. There needs to You know, that's not something you could take a, you know, a written test and pass and you're ready to go. You gotta get a feel. Right? Yeah. When you say patent recognition, so what does that what does that mean? Well, if if if you find in your program and you say Monte, you're a great student, but you're patent recognition sucks. If your pattern recognition sucks, you're not gonna be able to notice when something is different. So if you've got five things that are the same and one of them is slightly different. And that doesn't jump out to you, then you're probably not suited to be a very good indicator. She's saying like six bottles always say Chaturra nineteen fifty, whatever it is. And then one of them has got a little bit of a is just different from the others. Yeah. It could be a tiny bit of the the the The ink could be just a slightly different color. Or the font could be slightly different. Yep. So you gotta pick that up. Yeah. And you gotta pick that up in the small details, not just the big details. So that's the type of pattern recognition. And and that's how I really started because in in the olden days, you know, back in the early two thousands, wine auctions were not common in America. They only became legal in New York in in ninety six and only started in ninety eight. Yeah. So I started in two thousand. So I was kind of in the nascent. It was a nascent industry at the time, and people had been sold cases of wine by, you know, by people like Royal wine merchants who would take four bottles of petrus out and replace them with counterfeits. Most collectors would never put all twelve bottles up and look at them at once. So they'd have a bottle and they'd be, oh, it's the greatest wine ever. Then a few months later they'd have another one, and it wouldn't be so good, and they chalk it up to bottle variation. It wasn't until people started selling wine, and we put all twelve bottles up at once that we went, hang on. You know, consistently, there are four bottles. That are counterfeit in these cases. So we saw the pattern of the pattern. And, you know, that helped lead ultimately bill coked prosecuting or winning a good suit against worldwide merchants. And and other, you know, there are a lot of other merchants out there who are guilty of this, but these are the types of patterns that you need to be able to see. And it needs to not only be when it's right in front of you. When you've seen enough authentic, you know, nineteen eighty two Petris, When you see another one, if it if there are things that are strange about it, that should jump out to you. So that's, you know, the logic and the pattern recognition are very important skills. I have a little bit of OCD and a very fierce memory. That's a great combo for for a one authenticator. I mean, you're, you know, I've never interviewed anybody like you before after, sir. And I've I know we could contact each other ages ago, email, or whatever it was. I mean, you you, I mean, you are incredibly brave. I mean, brave in two senses. I mean, brave to do what you do, basically telling the industry you suck, and brave to do what you do because you got some extraordinary, really nasty people out there stop at nothing to damage you or hurt you physically or or whatever, and and not only that. You're standing. Well, I would say thank you. Well, you're standing up to that. And also, you're not only complaining about the situation, about the lamentable record that the wine industry has got on on this on this particular issue and it is lament lamentable. But you're actually finding coherent logical solutions that you can you can adapt, and that you can teach people so that we get a generation of Y merchants who do their job, who do what they're supposed to do. If you're a Y merchant, you should really know this shit. And, I could not agree more. And, you know, and it's funny when you talk about two thousand, we I won't go into too many specifics, but I remember that for me, that was almost like a almost everything that we're reading then. It was still just before the internet really kind of exploded if you wanna call it that way in terms of wine content. And there was a small fishbowl of little fish swimming around providing you content in written form and very careful what I say. You know, I've worked in Bordeaux and I've worked on the inside of Bordeaux and da da da da. And I did read some stuff. I think this is can't this is just not doesn't make sense to me. This one maybe I'm being skeptical or cynical as I am. I'm a little bit skeptical. I'm a little bit cynical, but that's a bit odd. So you're way ahead of the game. And, I mean, your your work is never gonna never gonna be ending because as soon as you come up with one solution block chain or whatever it is, those POSs are gonna come at you with another another tactic or to to get around the the security. It's, you know, this the one of the things that we recognize about the Shea Vault is, you know, just like the software that we've built to support it, You know, you don't you don't do that and it's done. You know, this is this is not a a one and done. This is a constant evolution. I think it helps that I come from Silicon Valley. You know, my father was one of the original designers of the integrated circuit. So I've seen Well, it's not just to remind everybody. The computer chip. Like, you know, there's Intel and AMD, and my dad was one of the founders of AMD. And, but he actually, you know, in the nineteen fifties, he was working on, you know, photo recognition of of, of numbers and letters so that so that, checks could be read. So, you know, he's been working on optical stuff, and, and then he got into, you know, semiconductor, but he he actually patented a couple different semiconductors. Well, he was working at GE or fairchild. But the point is that I come from a place where, you know, I recognize innovation. And whatever is, whatever is good today is gonna be fodder for school children tomorrow. You know, we when I was a kid, people we had Rubik's cubes, and now my friends have kids who are making, robots to solve the Rubik's cube. Right? So so I recognize that whatever we've got today it needs to be constantly updated all the time, and we're working with a software company to make sure that happens. And we're making sure that the hardware aspects that we're using are gonna be constantly updated. And we just have to keep, you know, logical and try to keep ahead of the crooks. One of the things that I hope happens as a result of this is, a little bit of a stratification of the industry in that the good guys I've been screaming about the bad guys for a long time, and they're still thriving. So maybe now if we give the tools if if if we create the tools and and the good guys can use the tools and they could be seen by consumers and by other people in the trade as using the tools. We can have a, you know, an industry of good guys and in an industry of some army guys. And, you know, if price is more important to you than provenance and authenticity, you know where to go. If you want, you know, to work with with upstanding people and and wine of good provenance, you know where to go. So I'm hoping that that that that we can at least create that much of a differentiation. Yeah. Final question. I mean, you've got I mean, everything that you know you've shared with other people. I mean, if you get hit by a bus, it's not like all your knowledge about this is is gonna gonna get lost because if, you know, I don't wanna he'll get it by a bus. Yes. But I mean, you'll do I'd rather say if I win the lottery and move to an island. Okay. Well, if you win the lottery and move to an island. You know, did did did does all your knowledge your knowledge will still be available for everybody? I know. So I'm trying. But, you know, people ask me that a lot of time, like, is, you know, is there anything that's in your head that's not on paper? And unfortunately, there is a lot of it. But I try to work with my colleagues and and train people and you know, one of the the aspects of the Shea Vault that's so good for the authenticators is that, all of my database and all of my learnings are going to be because wine fraud dot com has a very small amount of information. I mean, it's still got like fifty thousand images and we're we're redoing it. There will be even more. But there's so much more that we can't share with the public that only authenticators can know. So I'm in the process of trying to, to download that all out of my brain. But at least the there, you know, if I do end up on that island, there are at least a good number of people who have a really good start. It's interesting what you say about your father, about what he did. Yeah. Oh, I didn't know that. Yeah. I come I'm a Silicon Valley kid. So I have no idea. Yeah. So I'm I think I've learned most of my, my bad swear words as a kid, listening to my father complain about in the early eighties, the Japanese, counterfeiting, you know, the the circuits before AMD could even get him off the line. So, you know, counterfeits are something that I grew up, with an aversion to. And then, you know, I think getting beat up by my two older brothers all the time made me strong. So Okay. Put all of that together and you get me today. Yeah. Well, I'm very pleased to admit you, I have to say. Thank you. Me too. Absolutely. In interviews, both, inspiring and terrifying. It really is. I mean, it's, it's the flip side of the industry. And, but I've never met anybody that that that actually you've gotta have break. I mean, to get wired up by the FBI and, you know, that is not the normal part of a white merchant's beat. No. It really is not. It's out of it's just out of, you know, it's like asking a baker to jump out of a parachute, you know, with a plane and a parachute every morning before or she goes to work. It's just like, why would I just wanna do that? Yeah. Well, but there's so many baddies in the industry that we really need to do something about them. So, you know, I'll take one for the team. Okay. Maureen Nanny, thank you very much for coming in. Thank you. I'm sure we will meet again. I do hope so. Yeah, you're incredible, lady. Thank you. Yeah. Amazing. We always give applauders to, you know, safe little wine writer sitting at home with a lovely, warming, little laptop, and writing a cute, picky little articles about god knows what That's just, the kind of, that's like the parasites, which is what we are, and you're not your, you're somebody that's making sure that the food in this case, liquid is is clean and clear. Well, don't you? That's the goal. Thank you. Super super super. Absolutely brilliant. Thank you. Listen to all of our pods on Sound Cloud iTunes, iTunesify Himalaya FM, and on Italianline podcast dot com. Don't forget to send your tweaks to eta wine podcast. What is it? And what does it do? Don't get it wrong. Shay. Shea is French per seller. Shea Vault. What was it? Okay. Yeah. Yeah. Okay. Like Lemaitre Deshae. So it's Shea. I used to be a Metro Deshae. So Oh, well, there you go. So, okay. Let's do that again.