Grapevine
In previous columns I’ve reported on the prevalence of wine fraud perpetrated on high-end collectors. There are numerous examples of wily crooks taking advantage of gullible investors. It seems that social status or wealth does not necessarily bestow greater traits of common sense or wariness than on us 99 percenters.
One such scam has been unfolding over the last few days. The trial of Rudy Kurniawan has just concluded in New York.
The saga of Kurniawan’s exploits has surfaced as fodder for a blockbuster movie. All of the obvious elements are present: the allure of the young, wealthy social-climber; the intrigue in the form of the titans of American industries being drawn into his world of deception; his rise to the heights of blind worship; his desperate efforts to continue the façade he created; and his fall to the depths of a common criminal.
The background: Kurniawan, 37, presented himself as the son of a wealthy Chinese businessman. He developed an inner circle of wealthy wine collectors, constantly plying them with rare, expensive wines, principally French Bordeaux and Burgundy. His notoriety and prestige spread quickly as he purchased the finest wines at auction and then shared them with his associates.
The government’s charges alleged Kurniawan knew that wines he sold were counterfeit and that he intended to gain financially from his activities. From what I’ve read of news reports spewing forth from the media covering the trial, I’ve developed my own, admittedly subjective, theory of a possible scenario. Draw your own conclusion; the trial outcome is at the end of this report.
The alleged facts: He was an illegal alien, residing in the United States for the past 10 years. When his funds began to dwindle, he resorted to financial loans to sustain his social “habit.” As his need to be the center of attention grew, he ultimately resorted to crafting counterfeit wines. His target market? His elitist counterparts in the fine wine stratosphere, many of whom knew him personally.
The alleged plan was first to build a reputation as a high-end collector–which Kurniawan did–all the while purchasing wines at higher and higher prices to increase auction values. It was reported that at one point his monthly purchases exceeded $1 million.
Then he began selling those wines and others at auctions–which he did–at significant profit, thereby fueling his seemingly insatiable habit. In 2006, he sold wines at auction for over $35 million, a record that still stands.
Next, he interspersed counterfeit wines, crafted in his home, with genuine bottles – which he did – selling these wines at auctions and artificially driving prices skyward. At his trial, several witnesses testified that he attempted to sell old, rare wines that had never been produced. One potential auction lot contained 38 bottles of highly regarded Burgundy, ranging from 1945 to 1971. The winery owner intervened, stating that the wine was not produced until the 1980s.
The compelling evidence: FBI agents raided Kurniawan’s house the day he was arrested in 2012. They found a veritable counterfeit factory, replete with hundreds of fake labels for high-end wines, sealing waxes, a cork-bottling device and shelves of empty bottles.
The defense: Attorneys relied solely on the testimony of one witness, a wine expert, who was asked to opine on the authenticity of 50 bottles submitted as evidence by the prosecution. He stated that 80 percent were counterfeit.
The defense summation to the jury was that Kurniawan did the crime but shouldn’t serve the time. He was simply one of many who have sold counterfeit wines amongst themselves. It is those (unnamed) parties that are looking to make Kurniawan a scapegoat for their crimes.
It took the jury just two hours to convict Kurniawan. He faces up to 20 years in prison, just for his self-serving allegation of being a victim of the wine world’s avarice.
Nick Antonaccio is a 35-year Pleasantville resident. For over 15 years he has conducted 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.
