updated 3/19/2007 7:20:05 PM ET 2007-03-19T23:20:05

Federal prosecutors on Monday announced a 19-count indictment against a San Francisco Bay area businessman for starting a 2005 blaze that destroyed a warehouse and 6 million bottles of wine.

The prosecution of wine entrepreneur Mark Anderson marks the first charges stemming from the Oct. 12, 2005, fire that burned the Wines Central warehouse on Mare Island, a former naval base in Vallejo about 30 miles northeast of San Francisco.

It destroyed inventories from 92 wineries valued at the time at about $100 million. That included entire inventories of some small wineries, as well as some private collections of rare wines.

U.S. Attorney McGregor Scott said Anderson started the fire to cover up for embezzling wine he was storing at the warehouse for other clients. He said Anderson was selling the wine without permission.

"Mark Anderson put lives at risk to cover his tracks," Scott told reporters during a news conference. "Due to his greed and deceit, he now faces 19 felony counts."

He was joined at the federal courthouse in Sacramento by agents from the federal Bureau of Alcohol, Tobacco, Firearms and Explosives and the Internal Revenue Service.

Arson, tax evasion, mail fraud, more
The charges against Anderson include arson, tax evasion, mail fraud, using a fake name and interstate transportation of fraudulently obtained property. Scott said he did not expect anyone else to be charged in the warehouse blaze.

The indictment had been under seal since it was issued last Thursday by a federal grand jury in Sacramento. Anderson, 58, was arrested the next day at his home in Sausalito, a wealthy Marin County enclave across the Golden Gate Bridge from San Francisco.

He appeared Monday morning before a judge in San Francisco and will remain in San Francisco County Jail until a hearing scheduled for Thursday. He will then be transferred to Sacramento, where he is expected to enter a plea.

Anderson had been under investigation since the fire because he was at the warehouse when the blaze erupted and the fire began in the area where Anderson stored his wine, Scott said. Investigators searched his home shortly afterward.

Former sub repair facility thought to be fireproof
Winemakers from Napa and Sonoma counties stored wine inside the warehouse, a former submarine repair facility. It was thought to be fireproof because of its thick concrete walls and floors.

Anderson had been storing some of his wines at Wines Central but removed most of them after being asked to do so by business managers several months before the fire.

Douglas Rappaport, Anderson's attorney at the time, denied his client was involved in the blaze. Anderson would not have had any reason to damage the building because he had removed most of his wine, he said.

Rappaport is no longer representing Anderson. The federal public defender in Sacramento, Matthew Bockmon, declined to comment on the case Monday.

Ted Hall, president and co-owner of the Long Meadow Ranch winery, was pleased to hear about Monday's announcement. The winery's losses included two vintages of cabernet sauvignon and the entire "library" collection going back to the winery's first vintage of 1994.

Long Meadow had insurance, but that doesn't cover the more intangible effort and energy involved in re-establishing Long Meadow wines in restaurants and other markets, he said.

"What's really stupendous about this is the size of the loss," Hall said. "It'll take us years to recover because of our inability to remain in the marketplace."

More charges in separate case
Anderson also faces charges in a separate case involving his own wine-storage business, Sausalito Cellars.

He is awaiting trail on 10 felony counts of embezzlement related to missing wine valued at more than $1 million. Marin County prosecutors believe he sold rare bottles of wine to distributors from collections stored at his own facility.

That case is on hold because a further charge has been filed against him based on new evidence that was not admitted in the earlier hearing. A preliminary hearing is scheduled for March 27 that would bring the total embezzlement charges in the Marin County case to 11, Barry Borden, Marin County's chief deputy district attorney, said Monday.

Anderson is being represented in that case by Marin County Public Defender Eva Bennet, who did not immediately return a telephone call from The Associated Press.

‘Wiped out by an insane act’
Meanwhile, cleanup continues at the Wines Central warehouse, which likely will not reopen for another nine months.

Wines Central chief executive Jack Krystal said the fire ruined a lot of hard work for him and for the people who stored their wines there.

"These things don't just come out of the air," he said. "It takes a lot of sweat and a lot of time and a lot of effort to just be wiped out by an insane act."

Vallejo fire officials said total damage from the fire, including the value of the wine and the destruction of the warehouse, is between $200 million and $250 million.

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