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The Wine Show: episode eleven – wine fraud

The Wine Show: episode eleven – wine fraud

by Amelia Singer 13 July 2016

Amelia Singer delves into the world of wine fraud, looking at a case that shook the industry to its core and the problems surrounding proof of authenticity.

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In episode eleven we explore the complex and fascinating area of wine fraud. Although there are many cases of fraud which happen at the lower end of the market; our production team were particularly drawn to a story which shook the fine wine world. The most recent high profile case of fraud involved Indonesian-born Rudy Kurniawan and it contains all the elements of a sensational crime story – think a geeky version of The Thomas Crown Affair. An individual’s obsessive passion to be accepted by high heeled, discerning drinking society turns into a slippery slope of swindle and deceit. But is it as simple as that? The case of Rudy is a fascinating one – partly as it reveals the precarious nature of buying wine from a secondary market. But ultimately it reveals the often more precarious psychology and motivations of the actual fine wine buying circles themselves.

We really wanted to portray this story in as balanced a light as possible and therefore on the show we interviewed three people caught up in this scandal, all with different viewpoints on the case. We also wanted to have Rudy’s ‘voice’ in the story. This proved a little trickier as he was already in prison. Therefore the framework for this episode is based on the letter he wrote to the judge in his case before he was sentenced. In doing this, we hoped to show this story not as a simple paradigm of good vs evil. Life is not that simple; especially in the nebulous world of secondary markets for luxury goods.

What everyone can affirm is that from 2004 to 2012, Rudy engaged in a systematic scheme to defraud collectors and others by selling counterfeit bottles of rare and expensive wine. In the episode, we see a picture of Rudy’s fake wine factory which he set up at his home in California. In the house which he shared with his mother, he would use empty rare bottles, print fake labels and spend thousands of dollars on traditional French wax. There he would buy large stocks of négociant Burgundy and re-label them as more expensive wines. Maureen Dooney, a wine fraud investigator describes him as ‘a mad scientist’ with his liquid concoctions. He was determined to be a big player in Southern California’s legendary and extremely elitist drinking circles. He enjoyed the celebrity status and attention. As his letter poignantly expresses, ‘my passion was all-consuming – I lost myself in it.’

The wrong wine

Counterfeiting relies on an attention to detail – a photographic memory of the various labels, bottle shapes, glass indentations etc. of the various wines produced from a certain estate or Chateau throughout the ages. In 2012, Rudy famously consigned several lots of Clos St Denis from Domaine Ponsot from vintages long prior to any recorded production of Ponsot wines from that vineyard. The auction lots were withdrawn prior to bidding and Rudy’s cover began to crumble. He was arrested in March 2012 and at his sentencing in August 2014, a federal judge said his victims lost close to $30 million. The man who was known for ‘arguably the greatest cellar on earth’ will now forever be remembered as the greatest perpetrator of wine fraud that ever lived.

Jerome Mooney, Rudy’s lawyer, offers a less simplistic portrayal of his client. He does not dispute Rudy’s guilt of the crime. He asks us to think about whether the sentence Rudi was given is fair, arguing that Rudi only damaged wealthy people’s hobbies.

Rudy helped the wine auction house Acker Merrall & Condit rise to unbelievable financial heights. At two Acker auctions in 2006 he had unloaded wines worth an astonishing $35 million, and it has been argued that he was ‘used’ by them to keep on buying wine so that they could keep getting stellar sales in auction. If an auction house knows that they can make millions in one sale when Rudy’s name is associated with the wine collection – would they wish to pry into the provenance of those bottles? Equally, some winemakers may not wish to alert auction houses if they think fraudulent bottles of their estate are being sold. They might see it as damaging their reputation to future buyers of their wine.

Wine fraud hits at all levels of the market – from auctions to wine merchants and supermarkets. Even the untouchables, Angelina and Brad Pitt were affected. Their Miraval rosé, which sells in M&Sfor £18, now has a hallmark engraved in the glass because it was discovered that fakes were being produced and distributed in China. Four years ago, a consignment of counterfeit Jacob’s Creek, made in China and being sold in the UK, was uncovered. The forgers had spelt Australia wrong on the label. It is a murky world that is far more widespread than anyone realises.

Even with the recent light shed on these fine wine scams due to the Rudy Kurniawan case and even with all these guidelines – I can’t help thinking that wine fraud will keep on happening and that it will always be far more elusive than art fraud or copying a Rolex. It is partly due to wine’s organic and evolving nature that makes it harder to discern authenticity. However, it is also partly due to human nature too. We want to believe something’s real and don’t want to admit that our taste can’t discern a fake. Most of us would be too embarrassed to say anything if we thought something didn’t taste ‘quite right’ and definitely would not want to make that call in front of others. It’s tough enough to send back a corked wine in a restaurant for most people. It is that unnecessary mystique behind the subject of wine that enabled Rudy Kurniawan to sell his wine at such giddy prices. It is that same mystique which can’t help but make me think of The Emperor’s New Clothes.

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The Wine Show: episode eleven – wine fraud


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