The former owner of an online wine auction company has been charged with stealing more than $500,000 from a dozen clients, according to court records.
Joshua Krummenoehl of Brooklyn, New York, was charged in late June with multiple counts of grand theft involving alleged victims from various states, including California, Hawaii, New York and Colorado.
The wines were stored in Napa County, according to a court filing. As the majority shareholder at WineGavel.com, Krummenoehl is suspected of pocketing proceeds from wine consignment sales between February 2011 and April 2012, according to court filings in Napa County Superior Court.
One of the victims allegedly was owed more than $188,700, according to the complaint by the state Attorney General’s Office filed in Napa on June 26.
Krummenoehl was arrested in New York in early July after a warrant was issued for his arrest in Napa County. He waived extradition and was flown to California on a commercial airline, said Carl Chapman, supervising inspector with the Marin County District Attorney’s Office.
Chapman is assigned to the Northern California Computer Crimes Task Force, a multi-jurisdictional team that investigates computer crimes.
The 41-year-old Krummenoehl, who co-founded Wine
Gavel.com in 2009, was booked into the Napa County jail on July 17 and released a few hours later on $50,000 bail. He is due in court Aug. 28 in Napa County Superior Court.
None of the victims were Napa County residents, according to Chapman. However, while WineGavel.com’s offices were in San Francisco, the wines were stored in a building on North Kelly Road, Chapman said.
The California Attorney General’s Office, which has a unit assigned to computer crimes, filed the case in Napa County where the wine was stored and where most of the employees worked.
Krummenoehl, the majority shareholder, left the company in April 2012 after continuously hiring and firing experts, Chapman said in a court filing. The company’s operating expenses exceeded its profits from the very beginning of the business in 2009, Chapman wrote.
By 2010, Krummenoehl knew he could not pay his consignors for the wine he sold on their behalf, he alleged. Krummenoehl then began to use his clients’ profits to pay for his own expenses, according to Chapman’s declaration in support of Krummenoehl’s arrest warrant.
The investigation began in May 2012 after customers filed lawsuits in various jurisdictions against Bridgeview Enterprises LLC, also known as WineGavel.com, according to court records. Robert Dale and Robbie Hardy, of Hawaii, who are among the alleged victims, filed their lawsuit in Napa County Superior Court, according to court records.
WineGavel.com sold the collectors’ premium bottles online for about half of their value, according to court records.
According to Chapman’s court filing, WineGavel sold 537 bottles for about $31,000. That was “much less than the agreed upon minimum price,” he said in the document. The company also never paid the couple their $28,244, money owed for the sale of the wine, according to the document.
Dale and Hardy had built their collection during a span of three decades. “It was very important to them,” said their attorney, Kevin Block of Napa. His clients were left with the less valuable wine and a collection that had been broken apart, he said.
After a bench trial in civil court, the collectors won a judgment in August 2013 against Bridgeview for nearly $207,000, according to a court filing. That money included the costs of air fares, attorney fees and income lost, according to the order.
However, that money was never paid, Block said.
Krummenoehl filed for bankruptcy in May 2013 in federal court. The fate of the online auction house is unclear. Its website may have been removed recently.