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Federal Court Rejects Wine Counterfeiter's Appeal

Rudy Kurniawan is running out of options after a three-judge panel ruled the evidence obtained in an FBI search of his home was admissible

Peter Hellman
Posted: December 23, 2015

Convicted wine counterfeiter Rudy Kurniawan is running short on options. A federal appeals court announced yesterday that a three-judge panel had rejected his appeal of his 2013 conviction for mail and wire fraud arising from schemes to sell counterfeit wine.

The judges from the U.S. Second Circuit Court of Appeals announced their ruling with a summary order, a bad sign for Kurniawan. "A summary order is not for close decisions," said a lawyer familiar with federal appellate practice. "It signals that the judges didn't feel that this was a real close case and that the trial judge got it right. So a lengthy explanation is unnecessary. This order was slick and quick."

Kurniawan has a few legal options remaining, but they're not promising. "He could petition for a rehearing from this panel," said Brian Jacobs, a former deputy chief of the appeals bureau in the Southern District of New York. "Or he could ask for a full review en banc [by all the judges on the second circuit bench]. He could also petition the U.S. Supreme Court. The bottom line is that none of these options is likely to succeed. It would be very unusual to have an en banc or Supreme Court review based on a four-page summary order."

The ruling, coming less than two weeks after the judges heard oral arguments in the appeal, dismissed Kurniawan's central argument that his Fourth Amendment rights were violated by the search of his house on the morning of his arrest in March 2012.

FBI agents searched the home Kurniawan shared with his mother, including a locked room that turned out to be a counterfeiting workshop, claiming they had to carry out a "protective sweep" to ensure that nobody lurked within who might do them harm. Only later in the day did the agents return with a search warrant.

But the appeals court found that didn't matter. "We assume, as the district judge did … that the protective sweep of Kurniawan's home was illegal," the appeals panel wrote in the order. Therefore, "the evidence observed in plain view by the agents during the sweep should not have been included in the subsequent search-warrant affidavit." But, even without that evidence, "there was still probable cause to issue the search warrant." That probable cause was based on detailed evidence of Kurniawan's counterfeiting activities collected by the prosecution and the FBI before the arrest.

The judges also rejected Kurniawan's claim that the prosecution had improperly lumped together a "string of mailings" into a single count of mail fraud. The judges found that the multiple mailings could be bundled into a single count if they could be characterized as a "single ongoing scheme."

Jason Hernandez, the former assistant U.S. Attorney who lead the prosecution in the Kurniawan case, told Wine Spectator that he felt relieved by the appellate decision. "There's always some chance you'll be reversed, but you feel good when that chance is brought down to almost zero," he said.

Reflecting on the decision, Mooney said, "I sort of expected this result, but I didn't expect it this terse and this quick."

What's next for his client, who is currently serving a 10-year sentence in a federal prison in California? "I've reached out to him," said Mooney. "He could ask the court to reconsider, or he could claim that he had improper representation, and get another attorney. As an Indonesian national, he could also apply for a transfer to his home country to serve out his sentence. It's up to him."

Mooney also took issue with the destruction of more than 500 bottles of Kurniawan’s wine at a Texas recycling facility on Dec. 10, calling it "surprising and stupid." He argued that the bottles, stamped as counterfeits, still had "intrinsic value as collector’s pieces and could have been sold to benefit the victims."

"Rudy had a reputation for creating great blends," said Mooney. "I'll bet there are lots of people who would have bought these bottles with the intention of uncorking them to find out how they tasted."

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