In early March, Rudy Kurniawan’s house in southern California was raided by the FBI. But Kurniawan wasn’t wanted for any of the usual crimes such as bribery, extortion, or robbing a bank. Kurniawan was wanted for counterfeiting fine wines worth $1.3 million, and charged with five counts of fraud.
After he was arrested, photographs of his counterfeiting equipment, including labels of Châteaux Pétrus, Lafleur and Lafite, were circulated. The arrest is the culmination of years of work by the FBI’s art squad, which investigates fraud in high-priced collectibles.
The Los Angeles Times notes that Kurniawan amassed one of the world’s premier wine collections, estimated at its peak to be more than 50,000 bottles of the most celebrated Bordeaux and Burgundy wines of the last century.
Kurniawan had claimed certain wines were produced between 1945 and 1971 from the Clos St. Denis vineyard of Domaine Ponsot, but the winemaker did not produce wine from that vineyard until 1982.
Kurniawan also engaged in “multiple fraudulent schemes to obtain millions of dollars in loans from a finance company by understating his debts and attempting to use artwork and wine as collateral when he had already used the items as guarantees to an auction house.”
According to the New York Times, the photos taken from Kurniawan’s home showed reams of printed labels for some of the most expensive wines in the world, like Château Pétrus, Domaine de la Romanée-Conti and Château Lafleur, as well as corks, foils, rubber stamps with vintage dates and bottles that prosecutors said were being prepared as counterfeits.
The NYTimes notes that after paying thousands of dollars for rare, old wine in restaurants, Kurniawan would often ask that the empty bottles be mailed to his house.
“In a decade when the issue of counterfeit wines had begun to haunt many collectors, such a request could not help but raise suspicions, as rare bottles with intact labels could easily be filled and sold fraudulently.”
In a statement, U.S. Attorney Preet Bharara said, “As alleged, Rudy Kurniawan held himself out to be a wine aficionado with a nose for a counterfeit bottle, but he was the counterfeit, pawning off prodigious quantities of fraudulent wine himself to unsuspecting auction houses and collectors.”
Writing for Wine Spectator, Peter Hellman said the complaint alleges that for years Kurniawan financed an extravagant lifestyle by buying and selling millions of dollars of wine and borrowing cash from multiple sources without fully repaying.
“The complaint also reveals that Kurniawan has been living in the U.S. illegally since 2003, when an immigration court ordered his deportation.”
In the 50-page complaint, “Kurniawan was accused of attempting to defraud potential bidders by using a nominee to consign wines to the Spectrum auction. Those wines, supposedly from Domaine de la Romanée-Conti and Comte Georges de Vogüé, included the most expensive lot in the catalog: a case of Romanée-Conti 1971, estimated at $125,000. If authentic, the 78 total bottles were estimated to sell for approximately $736,500.”
Kurniawan played a major role in the wine auction market over the past decade. Hellman writes that in 2006, New York-based auction house Acker, Merrall & Condit sold about $38 million of wine at two auctions, all of it consigned by Kurniawan. The second of those auctions fetched $24.7 million, still a record for a single sale.
“Provenance Becoming More Important By The Day”
Jancis Robinson reporting for Financial Times claims that a year from now, with the 2012 vintage, first-growth Château Latour will stop selling its wine en primeur.
“Its luxurious wines will be sold only direct from the château, with increasing concerns about provenance being a significant factor in this decision,” writes Robinson.
Robinson notes that C&B has been offering a discreet authentication service for those who have doubts about a bottle of Pétrus. It is free, but those taking advantage of it agree in advance that any contentious bottle will be confiscated.
Robinson adds that the policy of the biggest London fine wine trader, Farr Vintners, is to steer clear of vintages older than 1982. The same is true at Bordeaux Index.
“If we cannot genuinely trace the bottle right the way back we avoid it. Better safe than sorry,” says managing director Gary Boom, who expresses surprise that “the auction scene sails on, blissfully unaware”.