The Wine Forger’s Handbook: A Brief History of Wine Forgery (Chapter Four)

The astronomical increase in value of both fine art and fine wine, even in times of economic recession, prompts investors and entrepreneurs, legitimate and illicit alike. The surge in demand for fine wine over the last decade, particularly in Asia, has motivated fraudsters. Anything that is valuable, whether it is a painting or a bottle of wine, is in danger of being faked.

（Continue from last issue）

Rudy Awakening

An article in the Los Angeles Times of December 1, 2006, reported on the wine buying activities of 30-year-old Rudy Kurniawan, an Indonesian-born scion of a hugely wealthy Chinese family.

The Burgundy expert Allen Meadows was quoted in the article: “The market has changed radically. I used to go out and buy old Burgundy whenever I wanted to. It was cheaper than the new stuff. Now, older wines are selling for 20 times what I used to pay only a couple of years ago.”

Kurniawan’s activities demonstrated how one person’s spending spree could grossly distort the international market, much like Ryoei Saito’s art purchases in the 1980s. Meadows believed that Kurniawan’s heavy buying had been a significant factor in the escalation of auction prices.

For Kurniawan, money was no object in his pursuit of the finest and rarest wines. He was reported to have spent $1 million a month and acquired so much Domaine de la Romanée-Conti that he was nicknamed “Dr. Conti”, though his louche lifestyle suggested that “Gatsby” would be more appropriate.

The anonymous vendor of New York auction house Acker Merrall & Condit’s two record-breaking “THE Cellar” sales in 2006 was Kurniawan, who amassed his astonishing collection in only six years. His palate quickly became renowned: He could frequently identify wines tasted “blind”, with no information given about the expensive liquid in his glass.

Two days before Acker Merrall’s April 25, 2008 auction in New York, William Koch filed a lawsuit against the firm, accusing it of selling him counterfeit wines in 2005 and 2006. Adding to the drama, during the sale itself auctioneer John Kapon announced that 22 lots of Domaine Ponsot Clos de la Roche and Clos St-Denis were being withdrawn “at the request of the domaine and with the consent of the consignor.” Laurent Ponsot had contacted Kapon after hearing about the sale, and claimed that some of the wines were from vintages that the domaine never bottled. To ensure that the wines were withdrawn, Ponsot unexpectedly turned up at the auction.

The consignor of these bottles was Rudy Kurniawan. Asked after the sale where he had acquired the wines, he said, “We try our best to get it right, but it’s Burgundy, and sometimes shit happens.”

Fall guy or thief? Ponsot gave him the benefit of the doubt, even though Kurniawan was known to have insisted on empty bottles of his wines being returned to him after restaurant blowouts with other high rollers. And, unknown to many people, Kurniawan had already run afoul of a top wine estate. In April 2007 he consigned six magnums of Le Pin 1982 to Christie’s Los Angeles. The owners of Le Pin, one of the most expensive and sought-after wines of Bordeaux, contacted Christie’s then head of wine in North America Richard Brierley to say that, based on the auction catalogue’s cover image, the magnums were not genuine. The wines were pulled from the sale.

Spectrum is Green

In February 2012 there was huge controversy about a London wine sale conducted jointly by Spectrum Wine Auctions, an Orange County-based auction house hitherto known for numismatics, and London wholesaler Vanquish Wines. It was alleged that the consignor of many of the wines was Kurniawan, who had more or less vanished from public view since the Acker-Ponsot controversy and had been spending money on art rather than wine.

Rumors of Kurniawan’s reemergence into the fine wine market led to close scrutiny of the catalogue. Doubts were cast about several wines and twelve lots of Domaine de la Romanée-Conti and one of Château Latour à Pomerol 1961 were withdrawn after label and capsule discrepancies were pointed out.

Spectrum categorically denied that Kurniawan was the consignor. “It is Vanquish’s policy to respect confidentiality and neither confirm nor deny consignees. However, considering that Spectrum have already said that Rudy is not a consignee, Vanquish can confirm the same,” Richard Brierley—formerly of Christie’s but now at Vanquish—said.

Vanquish approached DRC’s UK agent Corney & Barrow to assist in verifying the wines. In a press release issued on February 12, only one day before the sale, Corney & Barrow asserted that it is “not an official authenticator” of DRC wines, and the Domaine de la Romanée-Conti will only authenticate wines that have come “directly from itself via its authorized agents”.

For Kurniawan, who used to refer witheringly to traditional merchants like Corney & Barrow as “dusties”, the game was nearly up. On March 8, one month after the London auction, the FBI arrested Kurniawan in Los Angeles on five counts that included “Scheme to Defraud a Finance Company”, “Scheme to Defraud the Finance Company and a New York Auction House”, and “Attempt to Sell Encumbered Wines at an International Auction House”.

The Sealed Complaint of “United States of America v. Rudy Kurniawan a/k/a ‘Dr. Conti’” laid out in forensic detail Kurniawan’s parlous finances and his illegal resident status in the USA. Millions of dollars flowed into and out of his bank accounts between 2006 and 2011, with $16,322,170.45 racked up on his Amex card alone in this period. He borrowed over $11 million in 2011.

His counterfeiting methods were also described, such as his retention of empty bottles from his wine blowouts and subsequent purchases of inkpads, glue, and white Ingres paper. All of this evidence was found and photographed, with dozens of old labels, corks and capsules, and bottles soaking in sinks to remove their labels, at 9638 East Naomi Avenue, Kurniawan’s Arcadia home. Here, for the first time, fine wine fraud on an industrial scale had been exposed—not just a few bottles but hundreds.

Kurniawan's attorneys tried to exclude evidence found during a warrantless search of his home but this claim was rejected on November 6, 2012. By the end of the year Kurniawan was facing multiple fraud charges. His motives remained obscure, though a former colleague suggested that he was a young man in a hurry, desperate to prove himself to his family.

A spokesman for William Koch, who was doubtless feeling vindicated by his relentless litigation, said, “This is nowhere near the end of the story. They found thousands and thousands of labels in his home. We’ll never know the extent of this guy’s damage. We don’t know what he’s done.”

Koch’s man has a point. With Kurniawan, or any other fraudster, there is always a supply chain in which other people, whether knowingly or unknowingly, are complicit. After all, Kurniawan made the fake wines but he didn’t sell them.

The bars are closed

Sentencing of Kurniawan was delayed in April 2014 after authorities requested more time to handle the case. Meanwhile William Koch was interviewed on the ABC News 20/20 program about his relentless pursuit of wine fraudsters. Not known for sentiment, at one point Koch burst into tears when he explained his love of fine wine. Could a wine ever be worth thousands of dollars? “The art, the craftsmanship that goes into it, is worth that,” he replied.

In July, Koch settled out of court with Acker Merrall & Condit, who he had accused of selling him counterfeits. The fee was undisclosed, though as part of the deal Acker agreed to accept returns of “suspect or counterfeit” wines even if there were disclaimers in its auction catalogues. Acker would also submit any pre-1970 wines to third-party authentication.

Finally, on August 7, 2014, having already spent two years in jail, Kurniawan was sentenced to ten years in prison, with a $20 million fine and a further $28.4 million in compensation to be paid to his victims. As long as Kurniawan remains incarcerated he will be required to pay $150 per month toward restitution to his victims. It could take a while to pay the $28.4 million restitution in full. He was the first person ever to be jailed in the USA for selling fake wines and will be deported once his sentence has been served.

The judge was unimpressed by a letter of contrition sent to him by Kurniawan. He also pointed out that “we need to know that our food and drink are safe and not some witches’ brew.”

Laurent Ponsot, who had done as much as anybody to expose Kurniawan’s fraud, said after the sentence had been handed out that “twenty years would have been more satisfactory, considering how he has sullied the image and integrity of the wine appellations of Burgundy, Bordeaux, and beyond. Kurniawan gave the entire planet the impression that falsifying wine can make you a whole lot of money, so the sentence had to be very, very severe.”

Kurniawan agreed to pay Koch $3m in damages and tell “everything he knows” as part of an out-of-court settlement.

In November 2015, US marshals started to sell-off nearly 5,000 authenticated bottles of wine that belonged to Kurniawan. The marshals stated, “While there can be no guarantee with 100% certainty in any situation such as this, to the best of our knowledge, the wines we are selling are genuine.”

It is ironic that the US government was selling “authenticated” wines that belonged to a convicted wine fraudster.

With potentially thousands of Kurniawan’s bottles still in the market, this story is not yet over.

 

(To be continued)