Accused Wine Counterfeiter Rudy Kurniawan Guilty in Landmark Case

First federal prosecution for selling fake wine yields a conviction; Indonesian collector faces possible sentence of 40 years

Dec 18, 2013

Rudy Kurniawan did something unprecedented in the world of rare wines in 2006. An Acker, Merrall & Condit auction of his wines raised $24.7 million, the largest total ever for a single consignor. On Wednesday, Dec. 18, Kurniawan set another precedent. A federal jury pronounced him guilty of fraud for selling counterfeit wines and defrauding a finance company, making the 37-year-old Indonesian the first person tried and convicted for selling fake wines in the U.S.

Wearing an ill-fitting gray suit, Kurniawan stood tight-lipped, with his hands crossed in front of him, as a middle-aged woman, the forewoman for a 12-person jury, read the verdict. He gave no reaction. His lawyers did not look at him. The jury deliberated for about an hour and 45 minutes before returning at 10:55 a.m. with the decision.

Burgundy winemaker Laurent Ponsot, who has attended each day of the proceedings, told Wine Spectator after the verdict, "I feel no pity for him. It's good justice."

Kurniawan surfaced in rare wine circles a decade ago and quickly became a fixture at tastings and auctions, known for his passion for Burgundy and a talent for sniffing out fakes. Fellow collectors dubbed him “Dr. Conti” for his love of Domaine de la Romanée-Conti. Soon he was scouring cellars in America and Europe, looking for collectible wines, and selling hundreds of bottles at auctions and in private sales.

An Indonesian of Chinese ancestry, he had been living in Los Angeles for several years. (An immigration court ordered him to leave the country in 2003, but he appealed the case and it was pending.) Kurniawan was always vague about how he was spending millions of dollars on rare wines, as well as a Lamborghini and a wardrobe full of expensive watches. He said his family had done well in business in Asia.

But Kurniawan’s image as a savvy collector was tarnished when 22 lots of rare Burgundies supposedly from Domaine Ponsot were withdrawn from a 2008 Acker, Merrall & Condit auction at the request of proprietor Laurent Ponsot. As first reported by Wine Spectator, a collector with doubts on the wines’ authenticity had alerted Ponsot, who traveled to New York to make sure they were withdrawn. Asked where he had found the wines, Kurniawan was evasive.

More doubts surfaced soon as other collectors questioned wines Kurniawan had sold and it was revealed that he owed millions of dollars to Acker and some of its clients. Collector Bill Koch filed a lawsuit against Kurniawan in 2009. In February 2012, wines consigned by Antonio Castanos, a Los Angeles restaurateur and wine dealer, were withdrawn from a London auction by Spectrum after collectors raised doubts about them. Castanos testified in court this past week that he was a straw man for Kurniawan. A month after the Spectrum sale, FBI agents knocked on Kurniawan’s door, arrested him and conducted a protective sweep of his home. They found hundreds of bottles, labels, corks, stamps and notes that looked like the raw materials for making rare wines.

That physical evidence would form the foundation of the prosecution’s case, as Assistant U.S. Attorney Jason Hernandez and his team laid out boxes and boxes of the materials on a large table for the jury to see. An expert witness explained how labels had been copied and altered to create rare old bottles of Domaine de la Romanée-Conti and Château Latour. He added that he had examined at least 1,077 counterfeit wines over his career sourced from Kurniawan, including many at that 2006 sale and 267 bottles FBI agents seized from Kurniawan’s home. And three of Burgundy’s top vignerons took the stand to say that bottles Kurniawan sold bearing their winery’s labels were fakes.

The defense team, led by lawyer Jerome Mooney, tried to turn the suspicions toward the wine-collecting community, arguing that the market is full of counterfeits and that Kurniawan was being made a scapegoat. Mooney asked the winemakers whether the market was flooded with fake Burgundies. He tried to raise doubts about the credibility of the witnesses. In his closing arguments, Mooney claimed Kurniawan had merely been “reconditioning” and touching up the wines found in his home. And the labels, he argued, were for wallpaper in a home Kurniawan was building.

But the jury didn’t buy it. After the verdict was read, Judge Richard Berman set a sentencing date for April 24. Kurniawan faces a possible 40 years in prison, as well as fines. "He really just wanted to be accepted," Mooney said after the decision. "People were very supportive of him, but the moment he was arrested, everybody ran. My theory: He comes up with some wines that were truly rare. Suddenly people want to be with him. When he couldn't find more, he made it."