SACRAMENTO -- Delicato Vineyards of Manteca, Calif., the nation's 10th-largest winery, has agreed to pay a $1 million fine after admitting that it altered records to support a massive fraud in connection with its 1988 white zinfandel production.
Anthony Indelicato, 62, president of the family-owned winery, also agreed to plead guilty to his part in the fraud, to divest himself of hisone-sixth ownership in the company, to resign as company president and to play no meaningful role in the company's affairs for five years.
Two other top officers of the winery agreed to plead guilty to lesser false-records accusations.
The charges were filed Monday in Sacramento federal court as part of a plea agreement announced by U. S. Attorney George L. ZTC O'Connell. No date has been set for arraignment of the defendants.
Yesterday's action was the latest development in the investigation of the California wine industry's worst scandal in two decades.
Three San Joaquin Valley grape brokers and two growers have been convicted for their part of a complex plot that resulted in the misrepresentation of millions of dollars worth of common wine grapes sold to Delicato as premium varietals.
Delicato was notified in 1988 by U.S. Bureau of Alcohol, Tobacco and Firearms agents that it had been victimized. Company officers were told to isolate the cheap grapes because wine made from them could not be marketed as zinfandel.
Instead, the winery altered records to falsely reflect that the cheap grapes had been confined to a few vats, according to R. Steven Lapham, the assistant U. S. attorney who has headed the prosecutions.
The alterations caused wine to be sold to wineries and ultimately to the consumer that did not comply with federal regulations concerning varietal content, O'Connell said. Federal law requires that wines labeled with a varietal designation such as white zinfandel must be at least 75 percent from the specified grape.
Delicato bottles varietal wine under its own label and sells varietal wine in bulk to other major California wineries such as Sutter Home and GlenEllen.