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A Sausalito man who embezzled wine from his clients was sentenced to 27 years in prison today for fraud, tax evasion and the arson of a Vallejo warehouse where millions of bottles of wine were destroyed in a fire more than six years ago. U.S. District Judge Lawrence K. Karlton in Sacramento also ordered Mark C. Anderson, 63, to pay $70.3 million in restitution, U.S. Attorney Benjamin B. Wagner said.
The Oct. 12, 2005 fire at the two-story, 24,000-square-foot warehouse destroyed 4.5 million bottles of premium wine conservatively estimated at $200 to $250 million, Wagner said. Anderson stored the wine there for wineries and collectors for a fee. Many of the wineries were small family-run businesses that housed their complete inventory at Wines Central because they lacked storage capacity of their own, Wagner said.
In September 2005, Anderson was charged in Marin County with 10 counts of embezzlement after several of his clients reported their wine missing, prosecutors said. The clients never gave Anderson permission to sell the wine and received no compensation for it, the U.S. Attorney’s Office said. Several clients asked Anderson to return their wine or to view it to verify it was still at the warehouse, prosecutors said.
Anderson said the wine was temporarily misplaced or offered other excuses, but he admitted he embezzled the wine when he pleaded guilty on Nov. 16, 2009 to 19 counts in an indictment alleging arson, mail fraud, use of a fictitious name, tax evasion and interstate transportation of fraudulently obtained property, the U.S. Attorney’s Office said.
Anderson also admitted he failed to report more than $800,000 in income from the sale of the embezzled wine, thereby avoiding $290,000 in taxes, the U.S. Attorney’s Office said. “In an effort to hide his income from the IRS, Mr. Anderson set fire to his warehouse to destroy the evidence. His outrageous conduct not only cheated the government of income taxes but ruined the livelihood of many people,” IRS Criminal Investigation Special Agent in Charge Marcus Williams said.
The U.S. Attorney’s Office said the warehouse contained primarily premium wine from 95 Napa Valley wineries.Assistant U.S. Attorney R. Steven Lapham said insured claims totaled $65 million and there were 29 uninsured claims.Arson investigators determined the fire originated in an area of the Mare Island warehouse occupied only by Anderson, who was being evicted at the time for failing to pay several months’ rent, the U.S. Attorney’s Office said.
Anderson was at the warehouse on the day of the fire, ostensibly to dismantle the rest of his wine racks and to remove his clients’ wine, prosecutors said. Anderson’s sentencing was delayed when he unsuccessfully tried to withdraw his plea and hired another attorney.Lapham said Anderson, who suffers from back problems, again lay down on a bench in court for the sentencing today. Lapham said prosecutors discussed a 15-year, 8-month term for Anderson when he pleaded guilty more than two years ago, but when Anderson fought to change his plea,he lost his credibility for assuming responsibility for the offenses.
“That has consequences,” Lapham said regarding the 27-year prison term imposed today.The term is at the low end of the sentencing guidelines for the offenses, Lapham said. Anderson is not likely to pay the $70 million restitution unless he is released from prison and wins the lottery, Lapham said.”He got what he deserved,” Lapham said.Anderson’s attorney Jan Karowsky did not return a call for comment this afternoon.
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