Château Sucker - alleged high-stakes wine fraud

Caught this great piece by Benjamin Wallace at NYMag.com. I'm guessing our more hardcore wine folks are already well-aware of this story but it was news to me and fascinating news, at that . . .

at NYMag.com, Benjamin Wallace wrote:Even at Rudy Kurniawan's coming-out party in September 2003, there were questionable bottles of wine.

A score of Southern California’s biggest grape nuts had gathered at the restaurant Melisse in Santa Monica that Friday for a $4,800-a-head vertical tasting of irresistible rarities provided by Kurniawan: Pétrus in a dozen vintages, reaching as far back as 1921, in magnums.

Although Pétrus is now among the most famous wines in the world, it gained its exalted status relatively recently; before World War II, it was virtually unheard of, and finding large-format bottles that had survived from the twenties bordered on miraculous. Paul Wasserman, the son of prominent Burgundy importer Becky Wasserman, is something like wine royalty, but before this event, the oldest Pétrus he had tasted was from 1975.

Nonetheless, two bottles left him scratching his head. The 1947 lacked the unctuousness of right-bank Bordeaux from that legendary vintage, and the 1961 struck him as “very young.” He briefly entertained the idea of “possible fakes”—’61 Pétrus in magnum has fetched up to $28,440 at auction—and jotted, in his notes on the ’47, “If there’s one bottle I have serious doubts about tonight, this is it.”

at NYMag.com, Benjamin Wallace wrote:That Kurniawan had assembled such wines, and such winos, and was considered an expert at all about wine in 2003 was extraordinary, considering that just two years earlier he’d been a newbie. But in the moneyed stratosphere of hyperrare collectible wine, merely opening one’s wallet is often lionized as an act of courage or virtue.

Kurniawan has dated his wine epiphany to 2001, when, celebrating his father’s birthday at a restaurant on Fisherman’s Wharf in San Francisco, he drank a 1996 Opus One. Twenty-five at the time and living in the Los Angeles suburb of Arcadia, Kurniawan became enthralled, and was soon combing L.A. for the wine, quickly amassing 200 bottles. He started attending weekly tastings at the Red Carpet, a wine store in Glendale. Early the following year, at a charity auction in Paso Robles, he made a stir when, bidding on a hotly contested lot of the cult California Syrah Sine Qua Non, he simply held his paddle aloft until he won.

at NYMag.com, Benjamin Wallace wrote:The following month, there was a breakthrough in a civil case Bill Koch had filed in 2009 against Kurniawan: After years of procedural bickering, a court referee cleared the way for discovery to proceed. The FBI had been building its own case against Kurniawan, and had determined that he had been living in the country illegally since 2003, when his application for asylum had been denied. Now concerned that he was a flight risk, they filed for an arrest warrant. At dawn on March 8, a half-dozen FBI agents arrived at his house in Arcadia.

Kurniawan answered the door in his pajamas. The only other person in the house was his elderly mother. Hours later, when the FBI searched the house, they found thousands of wine labels for top wines, including 1950 Pétrus and 1947 Lafleur, Lafite, and Romanée-Conti. There were hundreds of old and new corks, and a mechanical device for inserting them. There were lead capsules and sealing wax and rubber stamps with vintages and châteaux names, such as 1899 and 1900 Latour and 1992 Screaming Eagle. There were glue and stencils and pattern scissors and warm white Ingres drawing paper. There were detailed instructions for fabricating labels for 1962 Domaine Ponsot Clos de la Roche. There were bottles of cheap Napa Valley wine markered with the names of old Bordeaux wines they were apparently intended to impersonate, and there were more bottles soaking in the kitchen sink, their labels ready to be removed.

at NYMag.com, Benjamin Wallace wrote:Last week, Kurniawan was indicted in New York. He faces four counts of mail and wire fraud, and jail time of up to 100 years. Certain corners of the wine world are waiting for the inevitable revelations about Kurniawan and his magic cellar with urgency, but also dread. If his rise had demonstrated anything, it was how easily the urge to know more can be overpowered by the temptation to know less. In a recent phone interview, Rob Rosania, one of the staunchest Kurniawan apologists, spoke vaguely of his “disappointment” with “what has transpired in sum total” but seemed resistant to the evidence of his own eyes, referring to “allegedly the quote-unquote proof.”

Château Sucker

=R=

Yep...

I was at the Hospice du Rhone auction where he held his paddle up till he won the SQN lot here's the photo of that moment


and here's one of him with SQN owner / winemaker Manfred K.

Just sold the shots to CNBC TV show American Greed (produced here in Chicago by Kurtis Productions)

mhill95149 wrote:Just sold the shots to CNBC TV show American Greed (produced here in Chicago by Kurtis Productions)

Congrats!

I watch that show from time to time, if I spot something about wine fraud in the episode description in the future, I'm going to pull up this thread, hit pause at the point where your pics are shown, and point back & forth between the two until my wife gets tired and says, "yes, yes, that's very cool"

LOL!

I'm not sure if the mods have issues with links to other boards but here is the link to A great thread on this subject

http://wineberserkers.com/forum/viewtop ... =1&t=61172

Don's continued efforts are really going to shake things up in the auction marketplace
On the last page of the thread he details how wine critic Allen Meadows was under contract with an auction house that was selling the wines of the accused.

mhill95149 wrote:I'm not sure if the mods have issues with links to other boards but here is the link to A great thread on this subject

No problem at all. Thanks, for the link and for sharing your pics. Congrats on the sale, too. I sure hope CNBC pays more than the Sun Times does.

=R=

mhill95149 wrote:LOL!

I'm not sure if the mods have issues with links to other boards but here is the link to A great thread on this subject

http://wineberserkers.com/forum/viewtop ... =1&t=61172

Don's continued efforts are really going to shake things up in the auction marketplace
On the last page of the thread he details how wine critic Allen Meadows was under contract with an auction house that was selling the wines of the accused.

My favorite thing about Wine Berserkers is all of the admirably knowledgeable elder statesman of wine using animated emoticons all over the place, including in the middle of ad hominem attacks. Thanks to you both for the great story and thread links.

Santander wrote:My favorite thing about Wine Berserkers is all of the admirably knowledgeable elder statesman of wine using animated emoticons all over the place, including in the middle of ad hominem attacks. Thanks to you both for the great story and thread links.

Here you go getting off topic....



WB'ers started due to the heavy moderation at another wine board (eRobertparker) and has become "the place" for wine board chat here in the USA.

Just wanted to say Thanks Mel for the link to the Wine Beserker's thread on this story ... during a rather harrowing week of overwork plus moving apts, reading through that thread was my daily reward. Just an amazing tale and fascinating to read as events unfolded. I do find the emoticon usage rather ... surprising but a lot of good storytellers there and so much knowledge. Truly fascinating. I'm about to read Billionaire's Vinegar next - reading the earlier reports on Royal, Parker, etc and seeing how closely it parallels this latest ... wow.

I had previously read the article and its quite sobering.
This type of fakery is prevelent in EVERY type of collectable.
It's most prevelent when you have someone with a lot of resources that does not want to invest the time and effort to be able to discern a fake and them relies on 'Experts' to sell him the collectble.
I have never purchased wine at auction preferring to peruse the reputable wine shops and order futures. But the wine business is not what it was and I stopped futures with the 2000 Bordeaux and 2001 Sauternes. The valuation of the 2001 Sauterne increased so much that I was concerned that I may not get it but Sam's delivered.
Right now our favorite wine is Columbia Crest Two Vines by the case from Binney's.
As for other collectables, unless I commission a piece directly from the maker, if I purchase, it is coly after study to make my own decisions. In some cases, you simply cannot quantitatively evaluate to make a rational decision. In that case, you don't purchase.-Dick

Siun wrote:Just wanted to say Thanks Mel for the link to the Wine Beserker's thread on this story ... during a rather harrowing week of overwork plus moving apts, reading through that thread was my daily reward. Just an amazing tale and fascinating to read as events unfolded. I do find the emoticon usage rather ... surprising but a lot of good storytellers there and so much knowledge. Truly fascinating. I'm about to read Billionaire's Vinegar next - reading the earlier reports on Royal, Parker, etc and seeing how closely it parallels this latest ... wow.

I will be interested to hear what you think about "Billionaire's Vinegar" -- I thought it was a great read, but my husband did not find it engaging in the least and did not finish it. To me, it proved how willing people are to suspend disbelief when they really want something to be true.

Sharon

I loved reading it and only wished for more and a bit more detail at the end about what happened to those involved. I gather Hardy Rodenstock is still selling .. wine ... from Germany or so someone mentioned in the Wine Beserkers thread on Rudy. I actually have found that thread - http://www.wineberserkers.com/forum/viewtopic.php?f=1&t=61172 an even better read since the story unfolds day to day and several participants are so deeply involved in sorting out the fraud - plus a lot of the WB folks are just good witty writers. Don Cornwell there is one of my heros these days and i confess to checking daily to see if there are new developments rather like a serial novel!

budrichard wrote:I had previously read the article and its quite sobering.
This type of fakery is prevelent in EVERY type of collectable.
It's most prevelent when you have someone with a lot of resources that does not want to invest the time and effort to be able to discern a fake and them relies on 'Experts' to sell him the collectble.
I have never purchased wine at auction preferring to peruse the reputable wine shops and order futures. But the wine business is not what it was and I stopped futures with the 2000 Bordeaux and 2001 Sauternes. The valuation of the 2001 Sauterne increased so much that I was concerned that I may not get it but Sam's delivered.
Right now our favorite wine is Columbia Crest Two Vines by the case from Binney's.
As for other collectables, unless I commission a piece directly from the maker, if I purchase, it is coly after study to make my own decisions. In some cases, you simply cannot quantitatively evaluate to make a rational decision. In that case, you don't purchase.-Dick

Sorry to disappoint, but many fine wine stops (yes, including the 'most reputable') buy wines both on consignment from collectors (who knows where they got them....Eric Greenberg, anyone?) and from auction. Thus, buying from a "reputable retailer" does not ensure the bottle itself came directly from the Chateau, it could have come from Rudy, indirectly.

I'm not a novice in the wine purchasing arena so you don't have to be sorry or Post like you really know the wine business. I've been doing this for over 40years and do not frequent 'fine wine' shops' because what these shops supply is supposed knowledge and unique wines but what they really supply is whatever they can obtain at the lowest price and sell with the highest mark up.
I said reputable wine shops of which I would have listed Sam's(formerly), Zimmerman's ( now defunct), the original Gold standard shops(not Binny's) and a few others now with different management. None of those shops ever sold me wine that was not ordered as a future and not delivered.
In fact as I stated, Sam's delivered two cases of 2001 Sauterne that could have easily been sold at 2-3 times the future price but that is what futures are all about, not purchasing wine out of private cellers or auction houses, none of which I have ever done.
For a number of years Great Lakes Wine handled my importation of Hockhiemer Domdechaney wines direct from the winery and delivery was through Wine Discount in Highland Park(Joe Alter), a reputable shop in my opinion. Joe Alter has since moved on to open the Bottle Shop. I do NOT purchase the collector wines where the valuation is out of proportion to the actual value. My use of Great Lakes stopped when they would not deliver a shipment and claimed they didn't know what happened to the wines when I know they were in the container because of my direct contact with the winery. Great Lakes simply realized the value of the wines I had ordered at very attractive prices and took the wines to sell themselvs.
With most of what I would term 'reputable' shops and people I knew gone, I haven't ordered futures for a few years or do I plan to again with the vastly inflated market for futures.
I don't inhabit the wine shops and Auction Houses where the wines are suspect so I have no problems and have not been dissapointed by your condescending Post.-Dick
.

More wine fraud fun from Wine Berserker's:

http://wineberserkers.com/forum/viewtop ... =1&t=70716

I doubt this one will make (currently) 112 pages of reading material.

re-sold the photos to CBS News and the story ran this morning
CBS video

Nice to see Mel's photos being used - I'm still a daily reader of that thread at WB and now loving the updates direct from the trial by Don Cornwell.

mhill95149 wrote:re-sold the photos to CBS News and the story ran this morning
CBS video

Good video and some commonsense statements.
My belief is that as a 'Collector', you should not use an adviser to make decisions for you or help make decisions. This puts the burden on yourself for learning and making decisions. If you don't believe you have the expertise, don't collect.
I never purchase anything at Auction whether wine, cars or whatever. If it's good enough to sell, it doesn't require an Auction.
I stay out of Collecting now because of two factors. First factor is that the amount of Global Wealth has raised prices out of proportion to actual worth.
Second factor is that where there is money to be made and big money, invariably there will be chicanery and fakes.
As to older wines, especially French reds, in the 1970's the supply of older vintages was somewhat plentiful(at least there wasn't the frenzy of today) and we purchased cases and bottles of some very nice wines from the 1940's, 1959, 1961, 1970, 1975 and the list goes on.
Today most is gone but as the wine approached the 30-40 year mark it was often a pale shadow of its former self.
So from my experience anything older than 30years or so in a french Bordeaux or Burgundy is just not worth spending
money on. In fact at the price point for the Great Growths of Europe, none is worth the money these days.
There is very good wine to be had a reasonable prices from all over the world.
Thanks for the links provided as I don't follow the wine world anymore.-Dick

Found guilty in under 2 hours....


http://m.nydailynews.com/1.1551540#bmb=1

Here's a quote from the article cited above: "His lawyer said he doesn't want to go back to Indonesia because his wealthy, ethnic Chinese family, has owned a beer destruction business in the predominantly Muslim country, has been subjected to discrimination."

Okay, I'll bite: what's a "beer destruction business"?

Gypsy Boy wrote:Here's a quote from the article cited above: "His lawyer said he doesn't want to go back to Indonesia because his wealthy, ethnic Chinese family, has owned a beer destruction business in the predominantly Muslim country, has been subjected to discrimination."

Okay, I'll bite: what's a "beer destruction business"?

Other sources seems to suggest that the word there should be distribution, not destruction.

Gypsy Boy wrote:Here's a quote from the article cited above: "His lawyer said he doesn't want to go back to Indonesia because his wealthy, ethnic Chinese family, has owned a beer destruction business in the predominantly Muslim country, has been subjected to discrimination."

Okay, I'll bite: what's a "beer destruction business"?

How many grammatical, spelling, and usage mistakes can you find in the quoted sentence? Send your answer on a postcard to "Remember When Newspapers Cared About Literacy Oh Well You Can't Fight Progress, 123 Main Street, Anytown USA"."

Just watched the movie sour grapes and made me think of this thread. It's on Netflix and is a well done documentary on Rudy. The high end wine business is a fascinating industry.

Just watched ‘Sour Grapes’.
Great film!
Every collecting discipline I know of has at one time or another a scandal.
As to collectable wine, if you are not purchasing new vintages by the case from a reputable importer/seller, than it’s a crap shoot as you go up in price.
Sam’s, Zimmerman’s, and a few other retailers in the 70’s and 80’s were good sources of older bottles and I never had the suspicion of a fraud.
I never perused the auction market!
An auction has the same phycological profile as gambling, a few highs overshadowing many lows.
What’s interesting in the film is the attitude of many of the ‘players’, they really didn’t care as it was more about the ambience, camaraderie and thrill of the game.
I go to Woodman’s and Binny’s in Highland Park now and drink what I have purchased decades ago. The current market in new vintage collector market is overvalued and priced in my opinion. The world is full of good wine as Rudy has proved!
-Richard