Grapevine: Justice Prevails in Wine Counterfeit Criminal Trial

Nick Antonaccio
Nick Antonaccio

“for some, small solace”

Over two years ago I reported on the arrest of a wealthy wine aficionado. His crimes were ones of passion, of greed and unbridled ego. And one other that eventually got him arrested: selling counterfeit wines.

Rudy Kurniawan, a 37-year-old self-proclaimed multi-millionaire, was arrested in 2012 by the F.B.I. on charges that he attempted to sell tens of millions of dollars of counterfeit wine.

Last week, after an extensive trial and guilty verdict that included testimony from the entire spectrum of the wine world from counterfeit experts to scammed producers to bilked wine investors, Mr. Kurniawan was sentenced to 10 years in prison.

Mr. Kurniawan had diligently worked at building a reputation in every aspect of the exclusive club of high-end wine lovers. For 10 years before his arrest, he played a major role in the wine auction market and was highly regarded as a sophisticated aficionado, wine connoisseur, collector, dealer and authenticity expert.

One of the wealthiest collectors/dealers in the world, Mr. Kurniawan enjoyed a lavish lifestyle. He was known to spend up to $250,000 a night on wines at expensive restaurants. Court papers indicate he racked up $16 million on his American Express card from 2006 to 2011.

It is believed he owned 50,000 or more bottles of very expensive wine. At one time, he was considered the world’s most active wine buyer, influencing the prices for wines. He engaged in wine churning: buying and selling authentic – and counterfeit – wines to support his lifestyle.

In Mr. Kurniawan’s home, the F.B.I. found empty bottles of famous, and very expensive, wines, shipped to him by restaurants that he patronized. Apparently he re-filled the bottles with inexpensive California wines, offering them at auction as the original wines (and guaranteeing their authenticity).

The trial was looked upon quite differently within the segmented inner circles of the wine industry. Certainly high-end investors who unwittingly purchased these counterfeit wines felt a small amount of solace – and retribution. Several, including billionaire Bill Koch, have been publicly embarrassed for being so gullible in pursuing personal passions, after having built a reputation (and fortune) for their acumen and savvy in corporate matters. Mr. Koch has personally spent huge sums – on purchasing several million dollars of counterfeit wines and spending approximately $25 million in legal bills to recover his investments.

At Mr. Kurniawan’s sentencing last week, his defense attorney, Jerome H. Mooney, presented him as a victim of the legal system. While acknowledging his crimes, he asserted that many wine frauds have been perpetrated, and discovered. This was the first wine counterfeit trial ever prosecuted; Mr. Kurniawan was being singled out as a poster child for a vast undercover industry.

Mr. Mooney then pleaded for a reduced sentence, stating, “Nobody died. Nobody lost their job. Nobody lost their savings.” Judge Richard M. Berman responded: “Is the principle that if you’re rich, then the person who did the defrauding shouldn’t be punished?” Chalk one up for the one-percenters.

What makes this tale enticing to me is that, while checks and balances work well at most levels of our society, the wealthiest can be the most gullible. Essentially Mr. Kurniawan was at the center of each check and balance in the wine world’s self-policing system.

Many in his closed circle regarded Mr. Kurniawan as generous and possessing impeccable standards. His arrest rocked the very foundation of the world of wealthy collectors of high-end French Bordeaux and Burgundy wines.

But not all is lost for those defrauded. Recognizing the fortune that Mr. Kurniawan had accumulated during his nefarious career, Judge Berman ordered repayment of $28.4 million in restitution to victims. It is estimated Mr. Kurniawan has accumulated over $20 million in property, including luxury homes, a winery, high-end watches and numerous works of art. It seems that, for the rest of his life, he will likely be drinking the same swill he sold to collectors – same wine, different bottle.

Nick Antonaccio is a 35-year Pleasantville resident. For over 15 years he has conducted numerous wine tastings and lectures. 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.

 

 

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