A Postmortem on the Rudy Kurniawan/Sour Grapes Saga
In my previous two columns, I’ve reported on the greatest fraud in wine collecting history. Rudy Kurniawan, the darling of the world’s high-end collectors from the early 2000s to 2012, was both a buyer and a seller of the world’s most prestigious and rare wines. His notoriety came to a head when a collector, Bill Koch (of oil magnates Koch brothers fame), sued Rudy for fraud.
In March 2012, Rudy was arrested for selling counterfeit wines to the world’s wealthiest Masters of the Universe. He was convicted in September 2014, sentenced in August 2014 and is currently serving a 10-year sentence in a Federal prison.
Here’s a perspective I found mind-boggling: In all, Rudy, over a number of years, purchased more than $40 million of authentic wine at auctions and from private collectors. In one year, 2006, he sold more than $36 million of counterfeit wine.
A recently released movie, “Sour Grapes,” chronicles the misadventures of Rudy. In reviewing the movie last week, I expressed my dismay at the gullibility of wealthy individuals, who seek fame and glory, at times contrary to logic and intuition. However, the movie was fascinating; I heartily recommend it for its subject matter (rare wine), entertainment value (the infatuation of intelligent people with an improbable fraudster) and drama (the incredulity, denial and stress of one-per centers that they could be duped).
This week my thoughts ran to the aftermath of Rudy’s debacle. At his sentencing, in addition to incarceration, he was ordered to reimburse victims $24.8 million in losses.
Federal agents were charged with selling Rudy’s confiscated assets.
I had a flashback to the final scene in the movie: a giant 6,000 pound magnet at a Texas waste disposal site, circa 2015, slowly descended on a large-format bottle of French wine. As I watched in awe, the bottle was slowly crushed, with wine and glass spreading in every direction.
But I’m getting ahead of myself. Herewith is an accounting of the results of the government’s efforts to recover the court-mandated restitution judgement.
First, Rudy was ordered to pay the sum of $150 per month until the $24.8 million judgement is repaid. This conjures up a carryover from the days of debtor prisons.
Next, to the liquidation of Rudy’s substantial assets.
- His cars – $310,000.
- His collection of 21 luxury watches – well in excess of $600,000
- Two homes in California, including the valuable art collection on the walls – undisclosed millions.
- His 23% ownership in a winery in Burgundy, France – $726,000.
- Finally, the wines. The wines? They must have been all counterfeit, you’re thinking. Not quite. Not all of the confiscated wines were counterfeit. More than 5,000 bottles were stored in a private warehouse. Only 392 bottles were counterfeit and in the movie are shown being destroyed by Federal agents at the above mentioned Texas waste disposal site.
To quote Federal marshals: “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.”
The top lot of the 4,711 bottles auctioned, three bottles of 1911 Domaine de la Romanée-Conti, fetched $45,200 – even though all three bottles were missing their main labels.
The auction results? More than $1.5 million was raised.
Is this a fitting end to the largest wine fraud in history, or a portent of the eventual outcome of future frauds? As long as there is avarice and the inflated egos in the rarified community of high-end wine collectors, I fear the latter. And by the way, it is estimated there are still 10,000 bottles of Rudy’s counterfeit wines in collector’s cellars. Who knows when these may show up at an auction or on a dinner table? In all likelihood, no one.
Nick Antonaccio is a 40-year Pleasantville resident. For over 20 years he has conducted numerous wine tastings and lectures. Nick is a member of the Wine Media Guild of wine writers. He also offers personalized wine tastings and wine travel services. Nick’s credo: continuous experimenting results in instinctive behavior. You can reach him at nantonaccio@theexaminernews.com or on Twitter @sharingwine.
