More than four years after Rudy Kurniawan was put behind bars, the aftershocks of his wine-counterfeiting activities are still being felt. An investment firm based in Singapore filed a lawsuit in a New York state court on May 19, charging that 132 bottles of Domaine de la Romanée-Conti (DRC) wines it purchased for $2.45 million in 2011 were not authentic. Rather, they were fakes made by Kurniawan, aka Dr. Conti, who is now serving 10 years in federal prison.
But the suit doesn’t stop with Kurniawan. It accuses some prominent names in the collectible wine business of being Kurniawan’s co-conspirators, including Richard Brierley, former head of Christie’s North American wine department and head of Vanquish wine auctions at the time in question; Xavier Nebout, CEO of a Bordeaux wine firm called Cep’Age; and Marc Lazar, a Missouri-based wine dealer and wine-storage facility owner. The lawsuit alleges fraud and negligent misrepresentation and asks for $2.45 million plus punitive damages.
“The defendants were fully aware that the bottles of wine they were selling were fakes that had been specifically engineered by a notorious counterfeiter, Rudy Kurniawan, to create the appearance of having the characteristics of real DRC wine, but which were actually forged bottles containing concoctions of lower quality wine,” states the complaint.
“The allegation that I in any way would be in involved in handling counterfeit wines is scurrilous and untrue,” said Brierley in an e-mail to Wine Spectator. Lazar did not respond to messages asking for comment. Nebout told Wine Spectator that he was merely an “intermediary” in the transaction, that Brierley approached him and he had no idea there might be questions about authenticity.
The scheme described in the suit begins in 2011 with the effort by Hrothgar, an investment entity registered in the British Virgin Islands, to purchase a significant parcel of DRC wines. The principal of Hrothgar (named for a legendary Danish king) is Stephen Diggle, an Oxford-educated Englishman operating from Singapore. He's cofounder of the hedge fund Vulpes Investment Management, with assets ranging from real estate in Germany to the largest avocado farm in New Zealand.
Kurniawan often used fake identities to move his wines, especially after he was caught trying to sell counterfeit Domaine Ponsot Burgundies at a 2008 auction. The lawsuit alleges that Kurniawan conspired with Brierley, Lazar and Nebout to sell Hrothgar a collection of 132 bottles of DRC wine, including 44 magnums and one jeroboam, ranging in vintages from 1961 to 1990. The lawsuit alleges that Kurniawan sent the wines to New York using the alias Dar Saputra, the name of one of his brothers.
Using various companies, including Lazar’s, the suit alleges, the assembled wines were shipped to Wine Cellarage, a facility embedded behind the thick walls of the former American Banknote Building in the South Bronx. The nominal renter of the storage space was Saputra. Prior to Kurniawan’s 2012 arrest, he and his brother shared the same American Express card account, according to evidence produced by federal prosecutors at Kurniawan’s 2013 trial.
Two wine brokers, James Ross, of New York’s Oakwood Advisors and an unidentified broker in Washington, D.C., reached out to Mission Fine Wines, a Staten Island wine dealer catering to serious collectors that had previously traded with Hrothgar, to offer the DRC wines. Hrothgar’s managers were interested.
But first, they wanted Mission’s owner, Joseph Palmiotti, to learn the provenance of the bottles. “The defendants intimated to Palmiotti, through the New York broker, that the seller [was] one of the foremost collectors in the world, Don Stott.” Stott was one of the world’s most voracious Burgundy buyers—in 2015, two Sotheby’s auctions of Stott’s wine, primarily Burgundy, fetched $13.6 million.
The final step prior to sealing the deal was for an expert to inspect the wines. On behalf of Hrothgar, New York retailer Geoffrey Troy visited the storage facility to look over the bottles. Prior to his inspection, “the defendants made sure that all references to ‘Dar Saputra’ were removed from the parcel to maintain the fiction that the seller was Stott,” says the complaint. It also quotes an e-mail from Kurniawan to an unknown addressee, later obtained by prosecutors, dated three days before Troy’s inspection, reading that he “employ[s] the services of Richard Brierley for Europe buy and Marc Lazar for USA buy” and “they will help me inspect my wines.”
On July 28, 2011, Troy arrived at Wine Cellarage, meeting Brierley, Nebout and Alex Gelleri of Mission Fine Wines. Troy told Wine Spectator he estimates he spent three hours examining the bottles. Hrothgar’s complaint states that Troy “concluded that the final parcel was authentic.”
But a copy of Troy’s two-page report, obtained by Wine Spectator, only gives a brief description of the bottles and their condition. Based on his report, it appears he assessed the wines’ condition, not provenance. Troy told Wine Spectator he asked the sellers about the provenance and received a vague response. One week after Troy’s inspection, Hrothgar wired full payment.
Six months later, Diggle grew concerned about the sale after seeing that 20 lots of DRC wines were withdrawn from a London auction held jointly by Spectrum and Vanquish. Brierley wielded the gavel at the sale. One of the bottles, a magnum of Romanée-Conti 1971, bore the same serial number as one of Hrothgar’s magnums.
Three weeks after the Spectrum-Vanquish sale, a co-owner of Mission wrote to Aubert de Villaine, head of Domaine de la Romanée-Conti, asking if he would inspect samples of the Hrothgar purchase, including magnum #0048. Diggle and Palmiotti brought the wines to Burgundy.
After his examination, de Villaine reported back to Mission that, “Each bottle or magnum shows elements that tend to be doubtful regarding the authenticity of the labeling and other elements that seem to conform to the original labeling.” In July 2014, as prosecutors attempted to assess the losses incurred by Kurniawan’s victims, they hired Maureen Downey, a well-known wine authenticator, to inspect the Hrothgar bottles. She declared them all to be counterfeit.
Collectible wine experts have told Wine Spectator that many Kurniawan bottles may still be at large. And because of his aliases, it’s unclear how many other sales he made. A trial date has not been set for this lawsuit.