New York magazine has a lengthy piece by Benjamin Wallace (author of The Billionaire’s Vinegar) on counterfeiting wine and the saga of Rudy Kurniawan. Grab a magnum of coffee and check it out.
Rudy Kurniawan, aka “Dr. Conti” aka “Mr. 47,” was indicted on four counts of counterfeiting, mail fraud and wire fraud in federal court yesterday. Mike Steinberger posted the 25-page indictment signed by US Attorney Preet Bharara to his blog.
The indictment largely covers the same ground as the documents filed when Kurniawan was apprehended in his home in L.A. in March. It fails to name the auction house where Kurniawan was the consignor of wines in 2008 where Laurent Ponsot dramatically stopped the sale in the room even though it has been widely reported. Nor does it mention the London auction house where he allegedly sold fraudulent bottles through a front man even though it was widely discussed. The front man’s identity at that auction is not revealed; the New York City restaurant that shipped empty bottles to his home remains anonymous and several collectors are mentioned but not named. Further, the “relatively recent” California wines that were to indicated to pass off as older Bordeaux and Burgundy have not been named. So there are still some gaps to the story. But details will emerge as the legal proceedings continue; also, two articles in major, non-wine magazines are in the works.
The case is U.S. v. Kurniawan, 12-MAG-606, U.S. District Court, Southern District of New York.
Mike Steinberger, friend of the blog, started a series of posts on his blog wherein he plays Wine Ethicist, answering (or posing) questions on etiquette in the wine world. Since Mike has fallen off the face of the internet (actually, I think he’s traveling) and has let his blog idle this week, we’re happy to pick up the slack on etiquette with a timely topic: the serving of counterfeit wine.
The arrest of Rudy Kurniawan was all the buzz everywhere I went this week (well, except my local grocery store, where nobody cared). As the talk led to counterfeiting, many in the wine world shared stories with me of dodgy or legendary bottles they’d had, the suspicious people they’d met, or why, like those at my grocery store, they couldn’t give a rip. I largely agree with that last point: while the tale of bling, duplicity and gullibility has undeniably enticing details and wine is deliciously multifacted, I spend my professional life tasting wine and writing about principally because I like to drink it with dinner. I’m not interested in chasing down magnums of ’47 Lafleur; I’ll stick with Lapierre Morgon because it’s not only more affordable but there’s there no chance of it being fake.
One sommelier told me this week that he opened a bottle that a collector had brought in. Although it had a celebrated 1947 Bordeaux was written on the label, when he pulled the cork, it read 1966 Rioja. So, here’s the etiquette question/ethical quandary: should the somm have alerted the diner to the fake right away or let the him and his companions enjoy the wine as if it were what was on the label?
Hit the comments with your thoughts. And I’ll share what the somm did after you’ve had a chance to weigh in.
The story of Rudy Kurniawan’s arrest on charges of selling counterfeit wine has been all over the news since the FBI arrested him on Thursday. Here’s some of the recent action:
* WineDiarist and Wine Spectator have published photos from federal prosecutors taken from the scene of the alleged crime; one of those, with stacks of Petrus 1950 and Lafleur 1947 labels among others, is reproduced above.
* The complaint states that Kurniawan had been living illegally in the US since 2003. He tallied $16 million in American Express bills between 2006 – 2011. He ran up $11 million of debt in 2007 alone. At the time of the arrest, he had a Lamborghini, a Mercedes-Benz and a Range Rover in the garage.
* Eric Asimov writes in the NYT about the arrest and recalls the go-go days, when Rudy Kurniawan apparently used his tasting ability to make him an arbiter on what on the table was fake and what was not. Asimov also tweeted a link to this 2008 Men’s Vogue piece by Jay McInerney on “billionaire winos.”
* Dirty South Wine wonders which California wines were found at the scene that were intended to be passed off as Bordeaux?
* Be sure to check out that fascinating comments on WineDiarist, where Bill Klapp calls the whole thing a “victimless crime,” Laurent Ponsot says he has been working with the FBI for years, and Paul Wasserman describes his former association with Rudy K. at the Wine Hotel, an LA wine retail and storage facility.
UPDATE: Robert Parker posted this on this site over the weekend: “It will be interesting to discover if RK was just an independent operator or part of an entire network….I can’t remember the exact date when two FBI agents spent much of a day with me discussing fraud in fine wine after I had written an article about it in my Bordeaux book, but I think it was the early or mid-90s…while they revealed little of what they knew, it was apparent this was an active case,and centered around the fabrication of fraudulent bottles…I wonder if the RK case is part of that same investigation of nearly 17-18 years ago….any ex-FBI people out there that know how long they will keep a case open?”
The FBI arrested the man known as Rudy Kurniawan at his home in Arcadia, California yesterday on charges of selling counterfeit wine. Inside the home, the authorities found materials used for making counterfeit wine bottles. They charged him with selling $1.3 million of fake wine but in 2006 alone, Kurniawan sold $33 million of wine at auction. They also charged him with “fraudulently obtaining millions of dollars in loans to finance what prosecutors called his ‘high-end lifestyle.” Check out all the details to this fascinating story in this piece at nytimes.com.
One thing that baffles me is how a fraudster could sell wines that, in fact, were never made. One example: the feds have charged Kurniawan with selling a bottle of 1929 Ponsot but Ponsot only started estate bottling in 1934. If one were to make and sell fake wine, don’t you think you’d take the time to make sure that the wines you were counterfeiting actually existed? And what of the auctioneers, did they not this or did they turn a blind eye to it? It will be interesting to learn more details as they emerge.
For those who think the FBI just roots around for terrorists, there’s apparently an elite unit that targets fraud in art and collectibles. I don’t know about you, but I can’t wait for the movie version of this story. Against a background of wealth porn, a brash young collector emerges on the scene; a go-go auction atmosphere; duplicity and gullibility; an angry billionaire seeking vengeance; and members of the elite FBI unit. We’ve discussed casting options for the first part of this saga before but hopefully someone in Hollywood will give this project a green light. I’m ready to head over to Starbucks right now with my Mac to play the part of screen writer right now!
The case is U.S. v. Kurniawan, 12-MAG-606, U.S. District Court, Southern District of New York.
The 2008 vintage of Henschke Hill of Grace has not yet been released. But when it comes out, the wine that is arguably Australia’s finest single-vineyard wine, and priced at around $500, will be sealed with neither screwcap nor cork; It will be closed with Vino-Lok.
Stephen Henschke became enamored with the technology when he presented a paper at a conference in Germany in 2004. He brought some of the glass closures back to Australia and tested some bottles of Hill of Grace with Vino-Lok in collaboration with the Australian Wine Research Institute (AWRI). Now with five years of testing and bottle age, Henschke is pleased with the evolution and will convert half of the 2008 production of Hill of Grace to Vino-Lok. The past few vintages have been entirely under screwcap.
“We have always viewed screwcap as a transitional closure, poised between cork and, well, we don’t know what,” Henschke told me in New York yesterday.
Vino-Lok, known (if at all) as Vino-Seal in the US, is a glass stopper that has an inner elastic ring that forms a seal with the bottle. Over on the Vino-Lok site, they say that it opens with a “click.” Henschke says they look “cool.” He’s so pleased with the closure that he has just installed the first Vino-Lok bottling line in Australia at his winery.
Vino-Lok touts its ability to age wines. And Henschke agrees that the evolution is slow, akin to magnums that are considered the ideal size for cellaring. “I call a [750 ml] bottle under Vino-Lok a half a magnum,” he says. “That’s how well it ages.”
Is the world of fine and collectible wine ready for a new closure? We will find out in the next year or so with the release of the 2008 Hill of Grace.
Wine investment fraud may run £30 million a year according to a source in a BBC investigative segment that aired last night. It’s interesting, though hardly surprising, to note the fraud story moving beyond simply counterfeit bottles.
The segment on wine fraud highlighted an investor group that lost 50,000 when the wines it purchased were never delivered. While it is tragic, it’s even more tragic that one of the bilked investors admitted that he couldn’t afford to lose the money. Perhaps he should have bought wines to drink, rather than ones for speculating on.
Simon Staples of BBR in London cites 400 percent returns on wine in 18 months. Jim Budd notes that he keeps a list of 60 merchants that he wouldn’t deal with and cited the £30 million a year figure. What do you think of that estimate–low or high?
Nordic divers have found a cache of old champagne bottles on a shipwreck in the Baltic Sea. Christian Ekstrom (pictured above via BBC) and his dive partners could not contain their enthusiasm at finding the intact bottles that may date from the late 18th century. So they brought one to the surface, uncorked it, and had a swig. Which statement below captures their reaction?
A) “Damn, it’s only nonvintage yellow label, which hardly keeps from one Christmas to the next. Oh, and the bloody thing is corked!”
B) “It was fantastic… it had a very sweet taste, you could taste oak and it had a very strong tobacco smell. And there were very small bubbles.”
Well, if you guessed (B) then you are right! I personally hate it when the oak doesn’t integrate after 220 years though.
In shades of Rodenstockian abundance, a Reuters story says that the diver does not yet know the number of bottles in the cache. The same story quotes Champagne expert Richard Juhlin saying that he thinks it is late-18th century, from the Clicquot house, and valued at about $68,000 a bottle.
Related: “Cristal at 20,000 leagues under the sea“