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“
How far would you drive to taste some vintage port? That’s most often a rhetorical question but I actually confronted it head on last week as a rare vertical tasting including some legendary wines came on the agenda in Montreal. Since I tucked away some 2003 Fonseca from one son’s birth year, I thought this would at the very least offer a something of a preview of how it will taste when we drink it together in 2024 and beyond. So I hopped in the car. Read more…
After three years of very rapid growth — placing it among the top 15 fastest growing private companies in the SF Bay area from 2006 to 2008, Vinfolio experienced a much more difficult sales environment during 2009. A few weeks ago, we found ourselves in need of additional capital on a very near-term basis. The company investigated several options but new capital could not be obtained on a necessarily compressed timetable. Because of the situation, and to safeguard the interests of our customers and creditors (including for wine purchases, wine sales, and wine stored with Vinfolio), the board of directors and the shareholders of Vinfolio approved and undertook a form of restructuring known as an Assignment for the Benefit of Creditors (the “Assignment”) on Friday evening, January 15, to provide the business with the flexibility to develop the appropriate course of action going forward.
The San Francisco-based company had just raised $4.5 million in September, they said to fund an expansion in Asia. According to the same article, the company, founded in 2003, had raised $6.1 million in previous rounds of financing (both debt and equity).
The company sources fine wine from collectors, wineries and has an importer’s license. Their other offerings include VinCellar, a system for wine inventory management, both on computers and as an iPhone app. The company also has 17,000 square feet of temperature-controlled storage for customers. Last July, the company launched VinFolio Marketplace, an online marketplace where not only wineries and importers could list wines for sale, but individual collectors could sell wines from their collection to one another. When launched, the company proclaimed that it enabled “access to the $500+ million in wine” making it the “world’s largest fine wine marketplace.” At the time of launch, in any given Marketplace transaction, the seller incurred a fee but the buyer did not.
In his post, Bachmann said that operations will continue during Assignment, a state-level insolvency measure. But in the eBob forum, several commenters on eBob debated whether collectors with wine in storage should arrange for immediate pick-up of their wines.
You just brought home a mixed case of wine from the store. Already, things are looking good. But what if you could scan each bottle as you unpack it and have the information appear in a database for managing your inventory? Or just for keeping all your tasting notes handy and organized?
To find out if it’s time for wine lovers to belly up to the barcode, I tested two newish products that claim to zap and upload: the IntelliScanner mini and the new version of Cor.kz, an iPhone app. Read more…
William I. Koch, the billionaire wine collector at the heart of the story The Billionaire’s Vinegar (buy on amazon), has taken yet more legal action in the world of fine wine. In an extensive complaint lodged in Los Angeles court last week, Koch makes some significant allegations. The complaint is available here as pdf and it makes for great reading. In the name of fairness and balance, these are simply allegations and it will be interesting to see how it all plays out. Whether or not you are into the fine and collectible wine market, these are fascinating developments as the cast of characters expands beyond those in The Billionaire’s Vinegar.
Koch alleges that five bottles he purchased through Acker Merrall & Condit were fake. The bottles were: 1947 Château Pétrus, a bottle of 1945 Comte Georges de Vogüé Musigny Cuvée Vielles Vignes, 1949 Lafleur, and two bottles of 1934 Domaine de la Romanée-Conti. Koch paid Acker $77,925 for the five bottles, purchased through private sales and auctions. He now claims they all came from Kurianwan but that source was not stated at the time of purchase.
Koch maintains that Kurniawan was the source of two Acker auctions in 2006 hailed only as from “THE cellar.” The two auctions grossed over $35 million. The complaint points to this LA Times profile of Kurniawan, which describes his preferred wardrobe is jeans and gray tshrits but that he has a Bentely and a Ferrari. The article also says that he got into wine only in the year 2000 but had already amassed a cellar of 50,000 bottles and that, “Since he started buying, prices for rare wine have skyrocketed.”
In reference to the two 2006 auctions, the filing says, “Buying and selling the same wine at the same time could also be an effort to manipulate wine prices, a scheme to pump up the price and then dump wine into the inflated market.”
Koch’s filing also states that Kurniawan owed Acker and Acker clients $10.4 million as of a November 2008 court proceeding. Acker accepted fine art and wine as collateral. Emigrant Bank also lent Kurniawan $3 million, according to the filing, and sued Kurniawan to get it back.
The filing also elaborates on sales of magnums of 1982 Le Pin and 122 bottles of red Burgundy from Domaine Ponsot. However, both sets of wines were withdrawn after winery principals raised doubts about the authenticity of the wines. Jancis Robinson has since called Laurent Ponsot “Burgundy’s Sherlock Holmes.” But where Kruniawan got those bottles remains unknown.
And to think that the movie rights for The Bilionaire’s Vinegar have already been sold! Looks like they’d better get working on the sequel already…