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NEW YORK (Reuters) - A federal jury in New York on Friday awarded $12 million in punitive damages to U.S. billionaire William Koch in his dispute over the alleged misrepresentation of 24 bottles of wine he bought at auction.
Koch, 72, said he may use the proceeds to establish a fund to confront auction fraud and wine fraud.
The founder of Oxbow Group energy company, Koch had accused tech entrepreneur Eric Greenberg of knowingly selling him counterfeit bottles of wine at a 2005 Zachys auction.
"There's been a huge code of silence in this industry," Koch said after the jury decided on the damages in U.S. District Court in Manhattan. "My purpose is to shine a bright light on it."
Koch filed a federal lawsuit in 2007, accusing Greenberg, the San Francisco-based founder of several Internet companies, of fraud and misrepresentation and seeking $320,000, the amount he paid for the 24 bottles.
The jury on Thursday evening returned with a verdict that Koch should be compensated for the amount he spent on the wine, and on Friday the panel decided on the $12 million in punitive damages.
Koch shook hands with jurors and thanked them as they left the courtroom, saying he was "out of sight, over the moon" over the damages award.
Greenberg had denied the charges, saying any forgeries from his wine cellar got to the auction house by mistake. In closing arguments on Thursday, his attorney Arthur Shartsis said his client did not knowingly sell fakes.
"Clearly, the verdict is a disappointment because I believed all the consigned wine to be authentic," Greenberg said in a statement after the verdict.
He said he had offered Koch a full refund of his money when he learned that Koch "had issues with some of the wines he had purchased" and said he intended to appeal the verdict.
"We believe that we acted honorably and tried to do the right thing for all concerned," Greenberg said in the statement.
Experts for both sides agreed that the wine in one of the 24 bottles was fake. The authenticity of the other 23 bottles was unclear, although expert witnesses testified that some of the labels were copies of the originals.
None of the bottles had been opened nor had the wine been tasted.
In court, Greenberg's attorney argued that the New York-based Zachys auction house had sold the bottles "as is," meaning the buyer accepted the product in whatever condition it was at the time.
Koch's lawyer John Hueston said in court that Greenberg withheld information about the provenance and authenticity of his wine collection.
Koch, whose brother David Koch is a major supporter of conservative political causes, settled a separate lawsuit with the auction house in 2011, details of which were kept private.
Additional reporting by Atossa Araxia Abrahamian; Editing by Ellen Wulfhorst and Phil Berlowitz