Rudy Kurniawan, a high-flying California-based wine dealer and collector who once bought and sold millions of dollars worth of wine annually, was arrested by the FBI at his southern California home on the morning of March 8 and charged with five felony counts of wire and mail fraud. The charges center on sales of allegedly counterfeit wines.
In a statement, U.S. Attorney Preet Bharara said, "As alleged, Rudy Kurniawan held himself out to be a wine aficionado with a nose for a counterfeit bottle, but he was the counterfeit, pawning off prodigious quantities of fraudulent wine himself to unsuspecting auction houses and collectors." The complaint alleges that for years Kurniawan financed an extravagant lifestyle by buying and selling millions of dollars of wine and borrowing cash from multiple sources without fully repaying. The complaint also reveals that Kurniawan has been living in the U.S. illegally since 2003, when an immigration court ordered his deportation.
Kurniawan's attorney Luis Li of Munger Tolles & Olson told Wine Spectator that the charges "are being evaluated." Shortly after Kurniawan's arrest, a judge initially ordered him released on a $175,000 bond, secured by property. But after prosecutors expressed their concern that he would flee, the judge stayed his decision, pending appeal. At that hearing, prosecutors said a search of Kurniawan’s home had turned up materials used in the counterfeiting of wine bottles, according to news reports. A hearing is scheduled for April 9 concerning the Justice Department's request to send Kurniawan to New York for trial. If convicted on all charges, he faces a maximum of 20 years in federal prison.
Kurniawan played a major role in the wine auction market over the past decade. 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. But Kurniawan has been at the center of controversy since a 2008 Acker sale when the auction house withdrew 84 bottles of Burgundy he had consigned, allegedly from Domaine Ponsot .
The arrest is the result of years of work by the FBI's art squad, which investigates fraud in high-priced collectibles. A key piece of evidence emerged last month, when California-based Spectrum Auctions withdrew more than 100 bottles of wine attributed to two of Burgundy’s most prestigious domaines from a London auction. Before the sale, a California collector and Burgundy lover, Don Cornwell, had voiced his suspicion on several websites that the wines had originated with Kurniawan. After the proprietors reviewed photos of the bottles and determined that they were not authentic, Spectrum pulled them. Jason Boland, Spectrum’s president, denied that Kurniawan had been the consignor.
The FBI has come to a different conclusion. In its 50-page complaint, filed in a New York federal court, Kurniawan, believed to be 36, was accused of attempting to defraud potential bidders by “using a nominee to consign wines” to the Spectrum auction. Those wines, supposedly from Domaine de la Romanée-Conti and Comte Georges de Vogüé, included the most expensive lot in the catalog: a case of Romanée-Conti 1971, estimated at $125,000. If authentic, the 78 total bottles were estimated to sell for approximately $736,500.
Little is known about Kurniawan's origins, but he became a fixture at wine auctions in the early part of the past decade. He claimed to be the son of a wealthy Chinese-Indonesian businessman. Kurniawan quickly became known for buying huge amounts of collectible Bordeaux and especially Burgundy. He was also an art collector.
For most of the players in the Kurniawan imbroglio, money is the main issue. But that’s not the case with Laurent Ponsot, who continues to try to identify the source of the wines that Kurniawan tried to pass off as precious old wines from the family domaine. "For two years now, I have been in close contact with FBI agents devoted to the case of fake wines. And we have had multiple meetings in New York to work on this together," Ponsot told Wine Spectator. "And now, I think that his accomplices should also be identified and arrested, if they are in France, Hong Kong or anywhere on the planet. Rudy has been advised by someone with extensive knowledge of Burgundy." Ponsot believes he knows who those accomplices may be, and says the investigation is not over.
Click to enlarge these photos, provided as evidence by the U.S. Attorney's office for the Southern District of New York when it requested a stay of the bail conditions for Rudy Kurniawan. The U.S. Attorney's office stated in the bail appeal document that the images were taken when the FBI searched Kurniawan’s home and found and seized, among other things, the following:
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