From the Napa Valley Register on 1/27/2015:
The former owner of an online wine auction company was sentenced Tuesday to 18 months in jail in connection with the theft of more than $500,000 worth of wines stored in south Napa County.
Napa County Superior Court Judge Michael S. Williams also ordered Joshua Krummenoehl, 41, of Brooklyn, New York, to spend 22 months under Napa County probation’s supervision program.
Krummenoehl, who had been out on bail, was booked into the Napa County jail right after the hearing.
Krummenoehl was president of WineGavel.com until April 2012, three years after he started the online and live auction business. From 2011 until 2012, authorities alleged he kept wine and profits entrusted to him in consignment, according to court records.
He was arrested in July and extradited from New York to Napa, where he was charged with multiple counts of grand theft involving a dozen alleged victims from as far away as New York City, Denver and South Carolina.
In November, he agreed to plead no contest to one count of embezzlement and admitted a special allegation. At sentencing, a no contest plea carries the same weight as a guilty plea.
“I’m deeply sorry,” Krummenoehl told the court Tuesday, as he sat next to his attorney, Doug Pharr.
Pharr told the judge his client should not spend more than one year in custody. Krummenoehl’s mistake had been to treat the clients who had consigned the wine as investors into the company. “All along in this process, he was trying to make this company work,” Pharr said.
But California Deputy Attorney General Johnette Jauron argued Krummenoehl should serve three years and four months, the maximum term under the plea agreement. Krummenoehl, the prosecutor told the court, had shown no remorse and has made no efforts to pay the money owed.
Pharr countered that the restitution order had not been issued yet. His client has been earning only $16 an hour and had no money to pay restitution, he said. “He’s going to pay for this for the rest of his life,” Pharr said of the money owed.
Krummenoehl filed for bankruptcy in May 2013, according to court records.
WineGavel.com, also known as Bridgeview Enterprises LLC, had an office in San Francisco, according to court records. He used a warehouse on North Kelly Road in south Napa County, said Carl Chapman, supervising inspector for the Northern California Computer Crimes Task Force, a multi-county effort based at the Napa County Sheriff’s Office.
Chapman began investigating the case in May 2012 when a client reported WineGavel.com never paid him more than $41,300 for sales and unsold wine. Other consignors said they were in the same situation.
The company’s operating expenses exceeded its profits from the beginning, Chapman wrote in a court filing. Former employees said Krummenoehl solely controlled all the money generated and made all the financial decisions, according to Chapman. By 2010, Krummenoehl used the profits from the wine on consignment to pay his own expenses, he alleged in the court document.
The victims included Robert Dale and Robbie Hardy, who lived in North Carolina and placed their wine in consignment because they needed the money. The couple now lives in Napa. Their wine was sold online at half value to only one bidder, they said.
“This was intentional,” Dale told the court.
Another victim, Robert Cunard, had consigned 86 cases of old valuable wines against his wife’s wishes to WineGavel.com to pay for their son’s education. He estimated his losses at about $75,000, according to court records.
Harry Cooper, a Sonoma County resident, reported he lost $50,000 while he was unemployed, according to his statement filed in court. Krummenoehl does not realize “what he was doing to people’s lives,” Cooper said as he walked out of the courtroom Tuesday.
Dale and Hardy have sued Krummenoehl, the company, and another company officer, Jorge Parra. Napa County Superior Court Judge Elia Ortiz ruled in August 2013 that Dale and Hardy are owed $207,000.
Dale and Hardy said they have not seen any payments. They went further into debt in order to file the civil lawsuit, they said.
“We’re glad to see him serve time,” Dale said after the hearing.
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