Last week, Rudy Kurniawan, who accumulated one of the world’s premier wine collections worth more than 50,000 bottles of the most celebrated Bordeaux and Burgundy wines of the last century, went on trial in Manhattan federal court.
Kurniawan was charged in 2012 with mail fraud for creating and trying to sell counterfeit wine, and is also charged with wire fraud for allegedly using counterfeit wine as collateral to secure a $3 million loan.
The case is being tried in New York because some wine was sold through Manhattan auction houses and the company Mr. Kurniawan secured a loan from is also based there.
According to federal prosecutors, Kurniawan turned his suburban Los Angeles home into an assembly line for counterfeit wine where Kurniawan forged labels of rare, expensive vintages and affixed them on bottles that he filled with a blends of cheaper wines.
He used wax and old corks to create the illusion of authenticity.
Kurniawan’s attorney, Jerome Mooney, said his client unwittingly bought counterfeits that he later sold. Mooney said experts will testify about a poorly kept secret of rare-wine collecting.
“There’s an awful lot of bottles of counterfeit wine bought and sold as vintage,” said Mooney.
Many of Kurniawan’s victims were friends who believed him when he said he had found a “magic cellar” in Europe.
Mooney said much of the case was about Kurniawan, a native of Indonesia with Chinese parents, trying to belong to a group that accepted him.
Kurniawan’s arrest was the culmination of years of work by the FBI’s art squad, which investigates fraud in high-priced collectibles.
Kurniawan had claimed certain wines were produced between 1945 and 1971 from the Clos St. Denis vineyard of Domaine Ponsot, but the winemaker did not produce wine from that vineyard until 1982.
Kurniawan also engaged in multiple fraudulent schemes to obtain millions of dollars in loans from a finance company by understating his debts and attempting to use artwork and wine as collateral when he had already used the items as guarantees to an auction house.
In 2006, New York-based auction house Acker, Merrall & Condit sold about $38 million of wine at two auctions, all of it consigned by Kurniawan. The second of those auctions fetched $24.7 million, still a record for a single sale.
The website Dr. Vino notes the prosecution will call two more witnesses on today and then likely rest.
In the hallway outside the courtroom during a break, people from the gallery were shocked at the poor quality of the defense counsel. One observer called it a “Mickey Mouse defense.” Another said, “there is no defense.”
When the authenticity of a bottle of Chateau d’Yquem that sells for more than $16,800 was in question, Stephen Williams, president and chief executive officer of Antique Wine Co. in London, sent it to The Center for Nuclear Studies in Bordeaux Gradignan to be examined by a particle accelerator.
At the center, the glass bottle is analyzed using ion-beam analysis that determines the age and history of the bottle.
The center also tests wine by measuring the amount of radioactivity that it emits. But the center can only test wine where the grapes were grown after the atomic bomb on Hiroshima was dropped in 1945.
The radioactivity in the soil declined after 1945, but increased again in 1961 and 1986 from nuclear testing, and the failed Chernobyl nuclear reactor.