Trying to Auction More Wines, Rudy Kurniawan Arrested by FBI on Numerous Fraud Charges

Rudy Kurniawan, who for years was active in wine circles as one of the world’s wealthiest, collectors and dealers was arrested by the FBI in Los Angeles.  Kurniawan, a resident of Los Angeles was taken into custody on 3 counts of wire fraud and 3 counts of mail fraud charges.  The charges were filed in New York. It is expected that the United States attorney in Manhattan, New York, would seek to extradite him to New York to face charges.

Rumored to live in the expensive, Los Angeles community of Bel Air, Kurniawan moved to California to attend Cal State Northridge in 1995. At the time, he was a resident of Arcadia, a Chinese language speaking area of Los Angeles. Chinese by birth,  Kurniawan, the youngest son in the family was born in Jakarta, Indonesia.  Kurniawan claimed his father gave him an Indonesian surname that is different from the family’s Chinese name in order to let Kurniawan keep his autonomy and privacy.

It is said that at his peak, Kurniawan was spending as much one million dollars a month on wine. He could drop $250,000 for a single night of wine and dinner and treat everyone at his table. At one point in time, he might have owned as many as 50,000 bottles of very, expensive wine. At the time, he was the world’s most active wine buyer. His purchases drove the collectible wine market! In an article published by the Los Angeles Times, Kurniawan told reporters,  “I’m not a collector. I’m a drinker.” Based on the charges and rumors, this looks like Kurniawan could also be forger.

This news of his arrest has been greeted with enthusiasm from numerous members of the wine collecting community stung by the purchase of counterfeit wine.  Kurniawan is known to have sold tens of millions of dollars worth of wine.  In 2006, he sold 35 million dollars worth of wine through Acker Merrall auctions.  Those auctions were referred to as “The Cellar I” and “The Cellar II.”   After the auctions were concluded, Acker Merrall refunded what is purported to have been millions of dollars to consumers that purchased wines from those sales due to potential fraud.  wine  Acker Merrall later obtained a judgment of more than ten million dollars against Kurniawan.

The first issues arising from the possibility of selling fake wine by Kurniawan stem from an auction in 2008, where  Kurniawan offered over 80 bottles of rare, never before seen Ponsot wine. The owner of Ponsot, one of the most famous producers of Burgundy wine offered testimony the wines were not authentic. Kurniawan also offered for sale a bottle of 1929 Ponsot that was estate bottled.  Problems arose when it was discovered the estate did not begin to bottle at the domain until 1934. Perforce the bottle should not exist! Ponsot was not the only wine in question. 6 magnums of 1982 Le Pin, the famed wine from Pomerol were also removed from the sale! Kurniawan claimed in an article published by the Los Angeles Times that he was duped when he purchased the wines.

Most recently, an agent of Kurniawan, Antonio Castanos, was thought to have tried to place on offer, numerous lots of wine, that were rumored to have been owned by Kurniawan, in a London auction held by Spectrum and Vanquish, February 12. Thanks to the efforts of Los Angeles collector, Don Cornwell, many of the lots in question were pulled from the sale. Some of the items included bottles selling for thousands of dollars each from Domaine Romanee Conti in large format sizes. Those unique bottles are pried by collectors due to their rarity.  Cornwell pointed numerous problems with the bottles consigned to the Spectrum, Vanquish auction which included a lack of provenance, inconsistencies in the printing and information on labels, inaccurate numbering on bottles, spelling errors on labels and other problems with the bottles and labels. According to experienced collectors, these mistakes should have been spotted and the wines should have not been placed in the sale in the first place.  It should be pointed out that not every contested bottle was pulled from the Spectrum, Vanquish auction.

The well known billionaire wine collector William Koch also filed suit against Kurniawan. . This story will be watched and read all over the world by numerous wine collectors. Wine collectors have been dismayed by the efforts of law enforcement to curtail fraud in the wine world. Much of this is due to the accused German collector, wine dealer, Hardy Rodenstock. Rodenstock has been accused of fraud, but so far, nothing has taken place to bring finally bring Rodenstock to court to face charges. Collectors and dealers possibly stung by Rodenstock wonder and hope if he’s finally going to be brought to court.  Time will tell.

Bail has not been granted to the defendant. Due to the almost limitless wealth that is available to Kurniawan, prosecuters convinced Judge Stephen J. Hillman to not yet grant the defendent bail.

According to the New York times, Mr. Kurniawan’s lawyer, Luis Li of Munger, Tolles & Olsen LLP in Los Angeles, said he was evaluating the charges, but declined to comment further at the moment.

http://www.thewinecellarinsider.com/2012/03/rudy-kurniawan-arrested-by-fbi-on-numerous-fraud-charges/