Updated Aug. 2

On June 27, French police in Marseille took Guillaume Ryckwaert, the chairman of the giant bulk-wine merchant Raphaël Michel, and several company managers into custody in Marseille. They were held for 48 hours, and then Ryckwaert was indicted on criminal charges before a tribunal in Carpentras, accused of fraud and deception and violations of the consumer and tax codes.

It's an investigation that has rocked the Rhône Valley. Ryckwaert stands accused of masterminding a massive fraud for more than three years, allegedly sourcing the equivalent of nearly 4 million cases of table wine and reselling it as premium wine from Rhône appellations, including Côtes du Rhône and Châteauneuf-du-Pape.

Philippe Pellaton, president of the Syndicate of Vignerons of the Côtes du Rhône et Côtes du Rhône-Villages, told Wine Spectator that they had known the company was under investigation since last fall. "Investigators were asking the vignerons to confirm sales contracts, verifying information, and asking questions about Raphaël Michel," said Pellaton. "Then in June, Ryckwaert was taken into custody, and we said, 'Oh-laa, this is serious.'"

In response to the allegations, the French supermarket chain Carrefour has suspended all supply contracts with Raphaël Michel.

Most details of the investigation remain confidential, but what is known is that agents from the Marseille bureau of the powerful National Customs Judicial Service (SNDJ) noticed a great number of violations when they audited Raphaël Michel in early 2016. SNDJ investigators were tipped off, deputy prosecutor Jean-François Mayet told Wine Spectator, when the paperwork filed by the company didn’t stack up, setting the investigation in motion. The fraud reportedly covers a period from October 2013 to March 2017.

Raphaël Michel was founded in 1899, and acquired by Ryckwaert in 2002. The company expanded rapidly under his leadership, particularly after he raised outside capital. Raphaël Michel trades in bulk wine, which it sources from more than 4,000 growers in the Rhône Valley, Provence, Languedoc-Roussillon, Chile and Argentina. It buys from 15 wine cooperatives in the Rhône.

The company then creates blends before selling the finished wine to bottlers. Its facilities in Piolenc have four loading stations that can pump the equivalent of 6,500 cases of wine per hour into tankers. The company reported annual revenues of $94 million and sold the equivalent of 10 million cases of wine last year.

The Syndicate of Vignerons of the Côtes du Rhône and Côtes du Rhône-Villages, and more recently the Union des Maisons de Vins du Rhône (UMVR) and the Federation of Syndicates of Producers of the AOP Châteauneuf-du-Pape, joined the case as plaintiffs, allowing them access to the investigators' dossier.

"It's unthinkable for us to not be party to a lawsuit that directly endangers our vignerons," said Pellaton, who is also president of a local cooperative. "We will not allow our vineyards to be defrauded or our appellation to be usurped."

Mayet said it was too early to know whether vignerons were complicit in any way. "I want to emphasize that the auditing process worked. The agents conducted a deep investigation. The mechanics of the fraud have been stopped. The problem is behind us," said Pellaton.

However, the case could drag on for a year or more, according to Mayet, who appointed a juge d’instruction, or magistrate, to pursue the criminal investigation. “It’s going to be long. There are other people within the company who need to be questioned,” Mayet said.

The other Raphaël Michel managers were released without charges, but more indictments could follow. Mayet argued that the volume of wine in question could not have been manipulated by only one person.

Ryckwaert was released on a $1.2 million bail, placed under court supervision, and is prohibited from managing Raphaël Michel. The bail not only acts as a deterrent to fleeing the country, but could be used toward eventual fines if found guilty. “We’re talking fraud in the millions,” said Mayet.

Raphaël Michel's attorney Olivier Morice denies any wrongdoing by his client. A spokesperson for the company told Wine Spectator that no official statement has been issued.

The Rhône syndicate has opened a hotline for vignerons who sold their crops to Raphaël Michel. "At the moment, we don't have any serious cases," said Pellaton. But "there is a lot of concern about the future of supply contracts with the company."