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Wine Counterfeiter Rudy Kurniawan's Sentencing Is Delayed

Convicted fraudster asks judge for leniency; Judge asks prosecution for more information

Peter Hellman
Posted: May 29, 2014

Convicted wine counterfeiter Rudy Kurniawan will have to wait a little longer to find out how long he will sit in prison. Kurniawan's sentencing, scheduled for May 29, has been postponed until July 17. And part of the delay stems from the inability—or unwillingness—of some of his victims to detail how badly he ripped them off.

A Manhattan jury found Kurniawan guilty last year of schemes to counterfeit wine and defraud a finance company. He faces a maximum sentence of 20 years on each count and possible fines. In filings preparing for sentencing, Kurniawan's defense team asked the court to sentence their client to time served—nearly 27 months—while federal prosecutors called for a term of 14 years, plus a financial judgment of $20.7 million, based on what it estimates Kurniawan made from making and selling fakes. Meanwhile, the probation department's pre-sentencing report recommended he serve 10 years. Upon his release from prison, Kurniawan is expected to face deportation to Indonesia.

Updated: Late on May 29, the court released a letter from Kurniawan apologizing to Federal District Judge Richard Berman for his actions. (See the complete letter here.) "Judge Berman, it is important for me to tell you that I understand what I did was wrong and that I am genuinely sorry for everything that I have done," Kurniawan wrote. "Please allow me to return to my mother. She is 66 years old and in poor health. She needs me."

Judge Berman devoted much of May 29th's hearing to questions he has for both the probation department and the prosecutors. In particular, the judge questioned how the government had arrived at its $20.7 million estimate of actual losses Kurniawan's victims suffered and $35 million of losses Kurniawan intended to inflict. A few major purchasers of Kurniawan's fake wine have been identified, but a "handful who bought $10 million combined are more hesitant to come forward," prosecutor Jason Hernandez told the judge. "We could subpoena them, but it would take months to go through their wine. That would not be a wise use of resources."

Defense attorneys Jerome Mooney and Vincent Verdiramo argued that evidence suggests Kurniawan only sold $7 million worth of fakes. They dispute the Justice department's claim of intended losses of $35 million, an amount that could lengthen Kurniawan's sentence. That intended loss is based mainly on Kurniawan's failed effort in 2008 to sell real estate mogul Michael Fascitelli two collections of wine for $30 million. Mooney said of the government's intended loss calculaton, "So much has been thrown in that we think is improbable."

Prosecutors included a chart detailing $20.7 million worth of actual losses, listing some of the collectors who bought from Kurniawan. One of the victims, Florida energy executive Bill Koch, had experts examine his cellar and report that at least $2.2 million of the wine is fake, but others are less specific. Quest Software founder David Doyle, who owns a $40 million wine collection and the Rockpool Bar & Grill in Sydney, reported that he bought $14 million of wine from Kurniawan and estimates $8 million to $10 million is fake.

Early in his wine-dealing career, Kurniawan did not always use his real name. Calling himself Leny Tan, a shortened form of the name of his mother, Lenywati Tan, Kurniawan sold at least $1.5 million to Brian Devine in 2003. Zachys later rejected those wines for consignment, saying many were fake but, as the defense lawyers point out, Devine does not know exactly how many were counterfeits. Numerous other collectors who bought Kurniawan's wines at Acker, Merrall & Condit auctions later returned them. As the defense states, it's unclear how many were actual fakes.

Many other collectors simply haven't stepped forward. As Koch wrote in a filing to the court, "As I have learned, collectors who know they have purchased counterfeit wine frequently refuse to assist in uncovering the fraud because they are either embarrassed or because they simply want to get their money back." Auction houses routinely re-consign returned wines.

The government also filed a spreadsheet detailing Kurniawan’s often frenetic wine dealing from 2004 until 2012, which shows that Kurniawan purchased $40.6 million in wine from dozens of auctioneers, dealers and private collectors in the U.S. and Europe. In the same period, he took in $39.7 million in income, mostly from Acker, Merrall & Condit, where he frequently consigned wine and also took out loans on future consignments.

In his memo delaying the sentencing, Judge Berman also criticized the probation department for not detailing much of Kurniawan’s “personal history” and for “offer[ing] little insight” into his behavior in its report. Berman also complained that “no family members (mother, brothers), neighbors or friends appear to have been interviewed.”

Still to be addressed is the prosecution's request that Kurniawan’s property, including two homes, three cars, a hoard of jewelry, and a share in a Burgundy land company, be forfeited.

Bruce Nichols
Naples, Florida —  May 29, 2014 4:21pm ET
Hope the prosecutors have - and are willing to use - shovels and picks. They need to use this time digging a little deeper into collaborators (no way he was working completely alone here) and picking through the deposits on his bank accounts...

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