Jeffry Hill, a former vintner in Napa Valley, plead not guilty last week in Federal Court to eight charges of mail and wire fraud.

Mail fraud is any attempt to commit some type of fraud using the United States Postal Service or private commercial interstate mail carrier. Wire fraud, similarly, involves a scheme to defraud by using wire, radio, or other electronic means of communication in interstate commerce.  Hill was indicted for selling grapes and bulk wine as Napa Valley Cabernet Sauvignon, when in fact the grapes were not grown within the AVA (and sometimes weren’t even Cabernet grapes).  Hill is alleged to have created false records purporting to document the wine as Napa Valley cabernet, intercepted trucks hauling grapes to change paperwork and instructed employees who picked grapes to mislabel the origin and varietal they picked, according to the indictment.  Hill’s victims claim to have paid more than $1.5 Million for the mislabeled grapes and juice.  Hill’s attorney has stated in court documents that the the charges are attributable to miscommunication, confusion and misunderstanding.

An AVA name can only be used on a wine label if:

1. Not less than 75% of the volume of the wine is derived from grapes (or other agricultural commodity) grown in the labeled appellation of origin;

2. The wine is fully finished (except for cellar treatment and/or blending which does not alter the class and type of the wine) in the labeled appellation of origin; and,

3. The wine conforms to the laws and regulations of the labeled appellation of origin governing the composition, method of production and designation of wine produced in the labeled appellation area.

Thus a winery pays a premium for grapes or juice (an “other agricultural commodity”) originating in Napa Valley so that it can use the AVA on its labels, provided the wine is also finished in Napa Valley and conforms to the AVA standards. In a civil suit, the defrauded wineries could seek to recover damages, however, Hill’s company filed bankruptcy after the initial investigation resulted in the surrender of his licenses, and the mail & wire fraud charges could each carry up to a 20 year prison term.


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