Wine Counterfeiter Rudy Kurniawan Sentenced to 10 Years in Prison

Indonesian wine collector ordered to pay $28.4 million in restitution
Aug 7, 2014

Rudy Kurniawan, the first person to be tried and convicted in a U.S. federal court for counterfeiting wine, was sentenced today to 10 years in prison. Once dubbed Dr. Conti by his fellow collectors for his love of Domaine de la Romanée-Conti, the 37-year-old Indonesian, dressed in prison blue and gray sweats, stood with his head bowed and hands clasped as U.S. District Judge Richard Berman pronounced the sentence. Berman also ordered Kurniawan to pay $28.4 million in restitution to seven of his victims and to forfeit $20 million in property.

Before passing sentence, Judge Berman, unimpressed by a letter of contrition sent to him by Kurniawan, said that the defendant "took no specific responsibility for the crimes he had committed." Berman also noted, alluding to the fake contents of the thousands of Kurniawan counterfeits, that "we need to know that our food and drink are safe and not some witches' brew."

Midway through the proceedings, Kurniawan was asked by Berman if he had anything to say. In a low voice, Kurniawan said that he meant everything he'd said in his letter, and that he wanted to go home to take care of his mother. At no point during the trial had Kurniawan shown any emotion, but after making his brief statement, he dabbed at his eyes and hung his head.

The U.S. Justice Department had asked Berman to imprison Kurniawan for up to 14 years, pointing to a decade-long career as a counterfeiter of iconic wines, some of which he sold for tens of thousands of dollars per bottle. In the prosecutors' view, Kurniawan was motivated by a “thirst for a life of luxury and status,” according to a presentencing filing. During the trial, the jury was shown copies of Kurniawan’s American Express charges at the Hermès boutique in 2007 and 2008 totaling $575,000.

The prosecutors argued that Kurniawan’s crimes were in no way mitigated simply because his wealthy victims could afford the losses, and that “rich or poor, everyone is entitled to get what they paid for.”

Kurniawan's defense team, led by Los Angeles lawyer Jerome Mooney, argued for a sentence of just under two and a half years, the time Kurniawan served since his arrest by FBI agents in March 2012. They portrayed Kurniawan, who arrived in California in the mid-1990s on a student visa, as a lifelong outsider who found acceptance and popularity after he discovered a gift for tasting and identifying high-end wines. They argued Kurniawan wanted to fit in with the privileged circle of ultrawealthy collectors he tasted with. But sourcing the rarest authentic bottles became increasingly difficult.

"If he could not find the wines to give him acclaim, he would create them,” his lawyers wrote in a memo asking for leniency. They also argued that while Kurniawan did sell millions of dollars of counterfeits, his victims were so wealthy that their losses made no real dent in their fortunes.

How much money they lost remains a source of contention that delayed today's sentencing multiple times. Berman repeatedly asked prosecutors for more specific information on how many people had been victimized by Kurniawan's schemes, who they are, and how much money they lost. Some victims hesitated to come forward, not wanting to admit they had been duped or that their cellars contained fakes. Not all of them had hired qualified authenticators to inspect their holdings.

As long as Kurniawan remains incarcerated and in a work program, according to the defense, he will be required to pay $150 per month toward restitution to his victims. "That should get them paid back quickly," quipped defense lawyer Mooney.

Kurniawan surfaced in rare-wine circles more than 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. Soon he was scouring cellars in America and Europe, looking for collectible wines, and selling many thousands of bottles at auctions and in private sales.

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.

More doubts surfaced soon as other collectors questioned wines Kurniawan had sold. When FBI agents knocked on Kurniawan’s door in 2012, they found hundreds of bottles, corks, stamps and 18,000 fake wine labels. Kurniawan's lawyers have argued that the search, carried out as a protective sweep before a search warrant was obtained, was illegal and may use it as grounds for appeal. The physical evidence formed the foundation of the prosecution’s case.

At Kurniawan's sentencing, Judge Berman thanked a trio of top Burgundian winemakers who testified at the trial, especially Ponsot, who said that he had at first been complimented that his wines were being faked, calling it "a bit of glory." But he quickly realized that "somebody will open a bottle and be disappointed." Ponsot's bottom line: Counterfeiting "dirties the spirit of the appellation of Burgundy."

Unless an appeal keeps him in a Brooklyn detention center for now, Kurniawan can be expected to report to a federal prison soon. Judge Berman has signed a provisional order requested by the prosecution requiring Kurniawan to forfeit property, including two houses (one in the exclusive Bel Air section of Los Angeles), an interest in the vineyards and wines of a Burgundian wine company, collectible artworks, 21 watches, including 11 by Patek Philippe purchased for $638,680, and a Montblanc pen he purchased for $17,945.

The defense lawyers were clearly shaken by what they considered a too-lengthy sentence. Lead defense lawyer Mooney told Berman that it was "harsh." And co-counsel Vincent Verdiramo later said, "I've had murderers who got less time. It's practically a guarantee that we will appeal."

Collecting Crime Fraud France Burgundy News

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