Wine Fraud Rocks Switzerland

Wine fraudster Cédric Flaction once drove showy cars including two Aston Martins, two Ferraris, two Porsches, an Audi and a BMW. The Swiss winemaker, however, has become better known for being the first vigneron in the Valais, Switzerland’s biggest wine region, to be convicted of wine fraud and forgery.

On September 2, 2024, a court in Sion sentenced Flaction to three-and-a-half years’ imprisonment, and ordered him to pay 1.94 million Swiss francs ($2.34 million) in compensation costs. Flaction is alleged to have bought 750,000 liters of Spanish bulk wine and 105,000 liters of Pinot Noir from Schaffhausen – a less-prestigious Swiss appellation – between 2009 and 2016, which he then sold on as Valais appellation wine.

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Prior to Flaction’s conviction, Swiss police had seized 13 of his cars, blocked 15 bank accounts and seized other financial assets. Last week, ahead of Flaction’s appeal against his conviction, a court in Sion confirmed that Flaction’s cars would remain under police control, his accounts and assets frozen. On April 29, Christophe Bonvin (an appropriate surname, in this case), General Secretary of the Courts of Valais in Sion, told Wine-Searcher that Flaction’s appeal against the sentencing would start in July this year.

It’s an appeal aimed at reducing the severity of his conviction; after all, in the run-up to his trial last August, Flaction had admitted to creating false invoices and selling more Valais AOC appellation wine than legally allowed in relation to the maximum production volumes permitted.

Yet, he denied having sold Schaffhausen wine or Spanish wine as AOC Valais wine.

Flaction’s lawyer claims his defendant sold his Schaffhausen Pinot Noir as Vin de Pays and Swiss table wine. But, during her sentencing, presiding judge Sophie Bartholdi Métrailler said: “Cheating had become habitual and commonplace. He [Flaction] only very partially acknowledged his wrongdoing, and did not take responsibility for his actions.”

Flaction, a winemaker, merchant and owner of the former Cave des Cailles, (now known as Maison Rouge), located in the picturesque Valais village of St Pierre-de-Clages, is reported to have acquired Spanish bulk wine at 1.5 Swiss francs (CHF1.5) per liter and Schaffhausen Pinot Noir at CHF3 per liter from a wine merchant. Flaction then, allegedly, sold on fake Valais appellation wine priced at between CHF9 and 13 per liter.

Written instructions showing percentages of each type of wine to use in blends were reportedly found at his winery. To cover his tracks, Flaction created 52 fake invoices to show that Valois wine companies had acquired wine from him.

According to the court’s indictment report, cited by Swiss newspaper Le Nouvelliste, Flaction’s fraud scam generated profits of close to CHF1m ($1.2m), from a total turnover of almost CHF12m.

Fraudulent industry insiders
Whether it’s in Switzerland, France, or Spain itself, over the past decade there have been increasing numbers of wine industry insiders caught up in wine fraud cases involving the illicit use of Spanish bulk wine.

Fraudsters often blend quality bulk wine made from the same or similar grape varieties as appellation wine. In each case, lengthy investigative phases drag on for years and years. In the notorious Bordeaux case involving 34,000 hectoliters of Spanish bulk wine sold as Vin de France and Bordeaux appellation wine, sentencing against the French fraud ring led by wine merchants Michel Gilin and Jean-Sébastien Laflèche did not take place until January 2023, close to a decade after the fraud had been committed.

In November 2022, Judge Diego De Juan, presiding over a fraud case involving allegedly more than 10m bottles of wine sold by Reserva de la Tierra in Spain over a three-year period, set a bail sum of €65m on six defendants, including the directors and employees of the company who are suspected of committing mass fraud.

The judge’s order, obtained by Wine-Searcher, shows how, ahead of a wine board inspection at the company’s winery in Tarragona, Reserva de la Tierra’s sales manager, Noemi Vives, instructed employees on how to hide the company’s fraudulent activity, including the closure of the main storage unit of the winery, in an email dated September 2021.

Close to three years after bail was set, the case remains in its investigative phase.

Espionage, extremism, fraud and forgery
Back in Valais, whatever the outcome of Flaction’s appeal, the story of fraud and the use of Spanish bulk wine to hoodwink consumers over the origin of wine and illegally undercut local rival wine producers is also far from over.

During his court hearing, Flaction claimed that he had delivered the Spanish bulk wine he’d acquired to Dominique Giroud, a notorious Swiss winemaker and criminal businessman, who had previously been convicted on tax fraud and espionage charges.

In April 2023, the Swiss Federal Court confirmed a conviction against Giroud, which had showed how he’d hired a detective and a hacker to spy on two high-profile Swiss journalists. A friend of his, an ex-Swiss secret service agent, was involved in the scam. In the appeal ruling, the court confirmed a fine of CHF10,000, but quashed a six-month prison sentence. Similarly, a nine-month suspended prison sentence given in 2018 for tax evasion involving the Giroud Vins company was quashed in an appeal in 2020, yet the charges of tax evasion were upheld, with Giroud penalized with a fine.

Giroud, aged 54, the former owner of Giroud Vins – the company’s name was changed to Château Constellation in 2014, following the allegations of fraud – remains under criminal investigation, in a fraud case very similar to that of Flaction. Details of Giroud activity and convictions are documented in Alain Bagnoud’s book, L’Affaire Giroud et Le Valais of 2015. The book needs an updated edition.

A highly contentious figure, Giroud is widely known in the Valais, as the son of local vigneron who dubiously built up a multi-million turnover wine company. Prior to the current wine fraud investigation against him, Giroud was known as a former chairman of the far-right Citadelle organization, according to several Swiss newspapers including Le Temps, and for his links to Switzerland’s influential and controversial, ultra-Conservative Christian movement.

In 2000, Giroud was fined by a court in Sion over his role in the creation of controversial anti-abortion posters in 1997 and was widely condemned locally for buying and creating a page of homophobic advertising in the Le Nouvelliste newspaper in 2021.

Giroud did not face any charges in the Flaction fraud case, yet the two cases are clearly linked. Of Flaction’s 52 wine invoices in question, 43 were reportedly made in the name of the companies owned or run by Giroud, for a total of CHF3m. Conversely, according to the criminal investigation against Giroud, he reportedly created fake invoices in Flaction’s name.

In June 2024, the Swiss canton of Valais named Swiss lawyer Charles Navarro as Procurer Extraordinaire prosecutor specifically for the Giroud affair, highlighting the extreme nature of the case. Navarro replaced public prosecutor Beatrice Pilloud, who was reportedly removed from Giroud’s case partly due to her previous role, in which she had defended Flaction’s wife and another convicted Swiss winemaker.

“I hereby confirm that I have initiated a criminal investigation against Mr Dominique Giroud, which is still ongoing. However, I will make no further comment on this case,” Navarro told Wine-Searcher in April.

The criminal investigation into Giroud’s activity, allegedly involving tens of thousands of liters of wine, comes in the wake of a legal complaint filed against him by the Swiss Valais wine trade body, the IVV (I’Interprofession de la Vigne et du Vin de Valais) back in 2015.

“Our legal claim is based upon declarations that Giroud made to Switzerland’s Federal Tax Administration in 2014; Giroud admitted to buying non-appellation grapes used to make and sell Valais appellation wine,” Yvan Aymon, Chairman of the IVV told Wine-Searcher. Approached by Wine-Searcher, Giroud and Flaction declined to comment on their cases.

In a further fraud allegation, the Canton of Valais launched a legal complaint against Château Constellation in May 2022 over the sale of 30,000 liters of 2019 AOC Valais wine to Caves Orsat. Regional wine trade inspectors suspect the wine was blended with non-AOC wine.

Swiss solutions to fraud
“The first victims of fraud are the vignerons impacted by lower prices from competitors who cheat, by buying in bulk wine from Spain or elsewhere, and selling it off as appellation wine. Here in the mountainous Swiss Valais wine region, production is heroic due to the altitude; our production costs, are naturally, much higher when compared to making wine in the vast plains [Castilla la Mancha] in Spain,” said Aymon.

Aymon reckons greater government controls and new local wine rules mean wine fraud is less likely to occur in the future in Switzerland, where around 60 percent of wines sold are imported wines.

New wine rules mean that the level of production rights of each producer is set for each grape variety, rather than establishing a maximum amount for all grapes. There is now a single unit for canton control of wine production.

Canton Valais authorities say isotopic testing on wines on sale in the market have been ramped up. Indeed, rather than controls on truck movements moving wine, Aymon argues that isotopic testing of wines is the most efficient way to combat fraud.

“We are calling for isotopic wine samples to be legally recognized,” he said. A broader database of isotopic samples than currently exists is required for Swiss courts to acknowledge such samples as evidence in criminal trials.

Article Credit: https://www.wine-searcher.com/m/2025/05/wine-fraud-rocks-switzerland