3 minute read
Your Money
The Jewish Home | JULY 21, 2022
Your Money Excuses, Excuses
By Allan Rolnick, CPA
Arecent poll from the Pew Research Center finds that 54% of Americans think violent crime is one of our country’s biggest problems. You would think the last thing we need is more of it. Yet millions are obsessed with true crime stories, whether we find them on cable TV, streaming video, or podcasts. If a podcast isn’t about murder, is it even a podcast?
Documentaries about Elizabeth Holmes, “Inventing Anna” Sorokin, and the “Tinder Swindler” prove that oldschool cons attract fans, too. Unfortunately for us, there aren’t a lot of true crime tax favorites. But New Yorker author Patrick Radden Keefe has just released a collection of stories (Rogues: True Stories of Grifters, Killers, Rebels and Crooks) where one of the bad guys throws the tax man under the bus to deflect some hard questions about his scam.
In 1985, a German wine dealer named Hardy Rodenstock came across a collection of bottles he claimed had been bricked up behind a wall in an old building in Paris. The bottles were labeled “Lafitte,” dated 1787, and marked with the initials “Th.J.” Thomas Jefferson, who had served as our second Ambassador to France, had spent the equivalent of hundreds of thousands of dollars in today’s currency building a collection of French wine. Naturally, Rodenstock offered the wine as Jefferson’s. Christie’s auctioned one bottle for a record-setting $157,000. Three years later, Bill Koch – brother of the political activists Charles and David – spent $311,486 for four more.
Years later, Koch decided to track down the provenance of the bottles. (Uh oh. True
crime fans know where this is heading.) Jefferson kept meticulous accounts of everything he spent. But archivists at Monticello found no record he had ever bought any 1787 vintages. They also pointed out that Jefferson wrote his initials as “Th:J.,” rather than “Th.J.” Carbon-dating one bottle (yes, that’s a thing) suggested it contained a mix of wines, with nearly half dating after 1962. Engraving experts concluded that the initials were too uniform to have been made in the eighteenth century. Koch’s investigators discovered that “Hardy Rodenstock” was actually Meinhard Goerke. Oh, and Rodenstock’s former landlord found a collection of empty bottles and stack of blank wine labels in his apartment.
Vintage wines have gotten expensive enough that counterfeits are common. But Rodenstock maintained his innocence,
despite refusing to reveal where the stash actually came from. If Christie’s said the bottles were legit, that was good enough. If the engraved initials were modern, it was because the finder had re-engraved them because the originals were illegible. Blah, blah, blah.
But Rodenstock saved his best excuse for the lack of any paper trail connecting him to the seller who found the bottles behind that Paris wall. “If you pay in cash, then people don’t have to declare the sale for tax purposes,” he told an interviewer. “Two hundred thousand dollars in cash can sometimes be better than a million-dollar check.” There you have it. France’s Ministry of Economy and Finance didn’t make him do it . . . but they gave him a skirt to hide behind.
In 2005, Koch sued Christie’s for promoting the wine as genuine. Sadly, fraud claims age like milk, not wine, and the court ruled Koch had waited too long to pop the cork on his case. A year later, he sued Rodenstock and won a default judgment. But there was no way to enforce the judgment on the German, who died without having paid.
The lesson here isn’t new, but it always bears reinforcing. Just be aware, as you make your way through our scam-filled world (Bernie Madoff! Enron!), that if something sounds too good to be true, it usually is. And when someone uses the tax man as an excuse for not backing up their claims, watch out!
Allan J Rolnick is a CPA who has been in practice for over 30 years in Queens, NY. He welcomes your comments and can be reached at 718-896-8715 or at allanjrcpa@aol.com.
