California dealer found guilty of wine fraud
Rudy Kurniawan was able to convince the world’s leading wine enthusiasts, including billionaire yachtsman, entrepreneur and wine investor William Koch, that the bottles he peddled were genuine. He sold $35 million in wine in 2006 alone.
The Associated Press
NEW YORK — A California wine collector and influential peddler of rare vintages was convicted Wednesday of fraud for manufacturing fake old wine in his kitchen.
Rudy Kurniawan, whose family gained wealth operating a beer distributorship in Indonesia, was convicted of mail and wire fraud for selling more than $1.3 million worth of counterfeit bottles to other wealthy collectors.
Sentencing was set for April 24, when Kurniawan faces up to 40 years in prison.
In an eight-day trial in U.S. District Court in Manhattan, in which prosecutors showed jurors fake wine labels, new corks and other items that they said were tools of Kurniawan’s trade, the jurors returned a guilty verdict after less than two hours of deliberation.
Kurniawan was also convicted of a second count of fraud, for securing a $3 million loan using his wine and art collections as collateral when he had already pledged them as collateral for another loan.
In a business where the product itself is shrouded in dark glass and doubts about authenticity are endemic, Kurniawan was able to convince the world’s leading wine enthusiasts, including billionaire yachtsman, entrepreneur and wine investor William Koch, that the bottles he peddled were genuine. He sold $35 million in wine in 2006 alone.
After Kurniawan, 37, was led out of the courtroom by U.S. marshals, attorney Jerome Mooney said his client was disappointed.
Mooney said the trial had revealed the “don’t ask, don’t tell” culture in the high-end vintage-wine business over what was being sold.
In closing arguments a day earlier, prosecutors said Kurniawan put on a “magic show” to fool aficionados into thinking he had access to the world’s rarest wines.
They said he made millions of dollars from 2004 to 2012 by manufacturing fake vintage wine in his Arcadia, Calif., kitchen, even though he had been ordered to leave the country in 2003.
Mooney said the government had discovered the suburban Los Angeles home of a hoarder when they arrested the Indonesian-born defendant last year, mistaking the hundreds of corks and other winemaking paraphernalia stuffed in drawers and closets as evidence that the home had been converted into a fake-wine factory.
Prosecutors said money from the fraud paid for a lavish lifestyle in suburban Los Angeles that included luxury cars, designer clothing and fine food and drinks. Mooney said all of Kurniawan’s assets have been seized or have had liens placed against them.
Billionaire Koch said in testimony he was conned and cheated by Kurniawan into paying $2.1 million for 219 fake bottles of wine.
Michael Egan, a fine-wine expert hired by Koch to determine how many of the 43,000 bottles of wine he owns are fake, testified during the trial for the government that evidence collected from Kurniawan’s property included 19,000 counterfeit wine bottle labels representing 27 of the world’s best wines.
Outside court after the verdict, Egan said the investigation and trial have highlighted an area of the wine-resale market that’s now been cleaned up, thanks in part to increased awareness from winemakers who now “defend their brands and defend French winemaking in general.”
Material from The New York Times is included in this report.