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Man indicted in costly wine fire

Sausalito entrepreneur is accused of setting the multimillion-dollar warehouse blaze to hide theft from his clients.

March 20, 2007|Eric Bailey and Lee Romney | Times Staff Writers

SACRAMENTO — A colorful wine industry entrepreneur has been accused of setting a $200-million fire at a Vallejo wine storage warehouse to cover up a scheme to steal and then sell his clients' wine, federal authorities announced Monday.

The October 2005 blaze at Wines Central, which rocked Northern California's wine industry, destroyed millions of bottles of premium wine, obliterating entire wine libraries as well as some highly rated blends that had not yet been tasted by the public.

Numerous boutique wineries were forced out of business when their inventory was decimated.

The investigation quickly turned to Mark S. Anderson, a longtime Sausalito resident and civic leader. Monday, nearly a year and a half after the conflagration, authorities unsealed a 19-count indictment that alleges Anderson, 58, set the fortress-like facility ablaze.

At a news conference crowded with investigators from multiple agencies, U.S. Atty. McGregor Scott said the fire broke out in the part of the 240,000-square-foot warehouse where Anderson rented space to store wine owned by clients of his firm, Sausalito Cellars.

Anderson, whose business specialized in climate-controlled storage of premium vintages, was seen at the warehouse in the hours before the blaze, Scott said.

"Mark Anderson put lives at risk to cover his tracks," Scott said. "Due to his greed and deceit he now faces ... many, many years in prison."

The indictment, issued by a federal grand jury last week, includes a single felony count of arson and multiple counts of interstate transportation of fraudulently obtained property, mail fraud, use of a fictitious name and tax evasion.

A well-known figure in the upscale if eccentric Marin County town of Sausalito, Anderson was a Rotary Club member and served on the city's arts and parks and recreation commissions.

He told residents he was once a sumo wrestler and worked in the music industry. Fluent in Japanese, he headed Sausalito's Sister City Committee, which arranged a trip to Sakaide, Japan, a few years back.

He's "very socially engaging," said Sausalito Police Chief Scott Paulin, who belonged to the Rotary Club with Anderson and spearheaded the embezzlement portion of the investigation. "Prior to the criminal activity coming to light, he was well received."

Paulin called Anderson "a very good con man."

Anderson is accused of stealing more than $1.1 million in wine from his clients.

In 2003, the first victim came forward, reporting that five pallets of wine Anderson had been storing were missing. Two criminal cases are now pending against Anderson in Marin County Superior Court, alleging that he stole wine from 11 collectors.

Anderson's firm originally stored wines from several customers in Sausalito, but later moved most of the merchandise to the Vallejo warehouse, a former Navy torpedo storage facility on Mare Island, about 35 miles northeast of San Francisco.

The Vallejo blaze, which occurred just as police scrutiny of Anderson was intensifying, burned for six hours.

The structure's 3-foot-thick concrete walls and steel doors -- perfect for keeping the wine cool and secure -- thwarted attempts to quickly extinguish the inferno.

Flames destroyed about half a million cases of "ultra-premium" wines.

Also among the losses were so-called "library wines" that vintners store as a virtual genealogical record of year-to-year changes in each appellation.

Anderson came under immediate suspicion after the blaze.

Over the months that followed, a team made up of investigators from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the IRS and local police and fire agencies probed the case.

Scott and the investigators declined to say how they linked Anderson directly to the crime.

The indictment accuses Anderson of using a second business, Kansai Partners, to fraudulently sell his clients' wine to a Chicago company between September 2004 and October 2005.

During the transactions, Anderson is accused of using assumed names, including Joseph Throckmorton and Peter Martin. He is also accused of failing to pay taxes on more than $800,000 in income from 2001 to 2004.

Federal agents arrested Anderson without incident last week. He appeared Monday morning in U.S. Magistrate Court in San Francisco and is being held without bail pending transfer of his case to Sacramento.

Jack Krystal, chief executive of Wines Central, said his business has still not recovered. Rebuilding will probably take another nine months. Dozens of his customers were ruined by the blaze.

"Making wine is like farming. You plant it, you harvest it, you make it, you bottle it, and you nurse it along. It's like a baby," he said. "The damage was horrible, and not only monetarily but socially -- on families and employees, on all of us.

"We feel like I imagine an individual who may have been raped or shot walking down the street feels," Krystal said. Douglas Due was among those whose business and dreams were destroyed in the blaze.

Up in smoke were more than 800 cases of wine from his Domain Ladue -- at least 90% of his inventory.

"We're basically out of business," said Due, 39, who last year took a job as director of business services for a company that builds and manages recreational facilities. "All of our capital was tied up in our inventory, and our inventory burned up."

Like others whose wines were damaged, he believes he may end up in court with his insurer, who has not yet paid up.

"Getting the perpetrator is a nice consolation prize, but it's not going to change the cards I hold or the process I have had to go through," Due said.

eric.bailey@latimes.com

lee.romney@latimes.com

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