Rudy Kurniawan - The wine merchant who tricked them all (almost)
In the early 2000s a new name gained prominence in the Los Angeles wine scene. An individual with a great palate for the best wines, his ability to identify wines superior to most others, with a love for Burgundy wines.
This financial scandal is for one for wine lovers and financial wizards alike. This culprit, Rudy Kurniawan, managed to cheat wine connaiseurs and the wealthy out of millions of Dollars. In the process, he enjoyed many a nights drinking the finest of wines, mingling with the rich and powerful, and became known as "Dr. Conti", the man with one of the greatest noses for good wines on the planet. If you haven't heard of him yet, you should definitely check out Sour Grapes, a documentary about his doings.
Who was Rudy Kurniawan?
Kurniawan came to the United States as a student in his late teens to attend California State University. When his visa expired, Kurniawan, whose real name was Zhen Wang Huang, decided to stay in the USA as an illegal alien rather instead of returning to his homeland of Indonesia. This is where his journey and his rise in the world of fine, expensive wines began and where his subsequent fall would cause waves of deceit and disappointment in the world of exclusive wine. Kurniawan made sure he was always well dressed, a good pair of trousers, a nice dress shirt and a pocket square in his sports jacket gave him the aura and necessary flair to pass off as the wine expert with access to the best wines on the globe. His appearance and demeanor instilled the belief that he had the most refined taste buds in the world of top wines. His preference and ability to distinguish wines did indeed cement the impression that he was the go-to person when it came to buying and investing in some of the most expensive wines from the grandest domains in France and elsewhere.
How did Rudy Kurniawan pull of his scheme?
Kurniawan spent a lot of time honing his persona. At night he would drink wine worth hundreds of thousands of Dollars, during the day the apparent wine wizard sold bottles worth thousands and even millions. In one auction his bottles fetched a total of $ 24.7 million. Yes, you have read that correctly. One man, many bottles of wine, rich buyers, and over 24 million dollars exchanged hands at Acker Merrall & Condit, a wine auction house and merchant. In fact, according to their website, they are the oldest wine merchant in the USA, operating since 1820. The infinite supply of exclusive wines did not seem to raise any suspicion. Partly because Kurniawan used aliases and intermediaries to sell his wines. This disguise enabled him to keep suspicions at bay regarding his never ending supply of some of the best wines in the world.
Kurniawan dealt primarily in Burgundy wines. One of his favorites was wine from a vineyard in Vosne-Romanee in France that produces some of the finest and most expensive wines in the world. In fact, Kurniawan bought and sold such great quantities at auctions that part of the vineyard's name became his nickname "Dr. Conti". The wine estate's name Domaine de la Romanée-Conti. Their wines are valued at up to € 10,000 a bottle. in 2017 a bottle of Romanée-Conti 1990 sold for € 15,600 at a Parisian auction and a lot of twelve bottles of Romanée-Conti Grand Cru 1978 sold for a mind blowing € 380,000 at an auction in Hong Kong in 2013. That is over € 31,600 per bottle. If you fancied a slightly cheaper wine, a lot of twelve bottles of Romanée-Conti 1971 sold at a Sotheby's auction in Hong Kong for € 305,204 in 2018 - a meager € 25,433 per bottle.
Kurniawan made millions dealing wines until he made what would become a catastrophic mistake and unravel his wine expert persona.
He tried to sell a 1945 Grand Cru Clos St Denis lot from Domaine Ponsot, another fine and very valuable Burgundy. The only problem, the Domaine did not start producing that particular type of wine until 1982. Kurwanian became increasingly sloppy. At the beginning of 2012 two different magnum bottles, a Romanée-Conti 1971 and a bottle of Romanée-Conti from another lot, that was sold only months earlier, both bore the same serial number. The same number, yet two different bottles? Dealers, investors, auctioneers, and other experts became increasingly suspicious of Kurwanian's dealings.
His entire scheme really started to unravel when two men decided to investigate further. One of them was the owner of the above mentioned Domaine Ponsot. Upon noticing that "his" wine, the Cro Clos St Denis, was to be sold at a Acker Merrall & Condit auction, he traveled to New York to intervene personally. The lot was pulled, but it did not stop Laurent Ponsot to dig deeper into Kurniawan's doings. His eagerness to research the once hailed wine dealer and his back story earned him the nickname "Sherlock Holmes of Burgundy".
Ponsot was also one of the key witnesses that led to Kurniawan's conviction.
The second man to launch a thorough investigation was Bill Koch, brother of the infamous Koch brothers of Koch Industries and billionaire with a palate and interest for fine wines. Koch, with great amounts of financial means to fund an investigation, hired a private investigator, Brad Goldstein, after discovering fake bottles in his own collection. Goldstein quickly came across a fake 1947 Petrus magnum that, if it had been an authentic bottle, would have sold for $ 35,250 at a Christie's auction. Goldstein's discoveries also included two bottles of 1934 Domaine de la Romanée-Conti that, as of August 2019, were valued at € 22,793 per bottle.
With rising suspicions and two major players in the wine industry investigating the scheme, Kurniawan's activities soon came to an end.
Who were the victims?
Bill Koch, the billionaire and investor in fine wines, who eventually settled out of court with Kurniawan for a sum of $ 3 million.
Beside the damage to the reputation to the auction house, Acker, Merrall, & Condit were owed $ 3.5 million from Kurwanian's outstanding debt.
Many other investors and buyers of wine who have either invested or drunk inferior wine to the one they believed to have bought. Let us hope that they were unaware at the time of opening the bottles and enjoyed the wine nonetheless.
Even years after Kurniawan's fraudulent activities came to an end, his bottles are reportedly still being traded. In May 2016 a Singaporean investment firm filed a lawsuit that 132 Domaine de la Romanée-Conti bottles that they had purchased for $ 2.45 million were in fact Kurniawan's rebranded wine.
What was the aftermath of Rudy Kurniawan's wine fraud?
Rudy Kurniawan was detained on March 8th 2012 at his home in California by the FBI. Following the search of his house, agents found low-range wines that he planned to rebrand as old, valuable Bordeaux wines. From labels to corks, stamps to other utensils, Kurniawan had already laid everything out for his next gig.
Indicted on wire and mail fraud charges he was sentenced to ten years in prison on December 18th 2013 after a ten day trial. Rudy Kurniawan's earliest release date, according to his record, is January 9th, 2021, after which he is set to be deported to Indonesia.
There might still be bottles from Kurniawan's "collection" floating around today. Next time you buy any of the wines that he dabbled in, make sure you get a genuine bottle. It will definitely taste better and certainly be a better investment.