RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

[Don Cornwell]

I've just been adding some Clos St Denis from Ponsot to my CT inventory and noticed listings for 1959, 1962 and 1971 vintages. 8-9 bottles of each. No mention of the source....

Steve:

We know the source.... I know that Rudy sold some to "California Collector" a/k/a Andy Gordon and I believe he also sold some to the other California collector, who bought a similar amount, whose story was not mentioned in the initial complaint. Just one more example of how easy it was for Rudy to pull this off.

[Bill Boykin]

But if a shop isn't on her "good guys" list, I'd be wary.

Understandable how you could/would say that,but it's too simplistic and subjectively narrow.

[Charlie Carnes]

This story is so amazing. I am thinking of the cast of Margin Call to play all of the characters in the upcoming movie.

Don incredible effort here in all of this. I have a 1947 Petrus and a 1953 Margaux I bought back in 2007 that I might need you to take a look at.

Wendy, your article is excellent. An awesome read, it is so well written, and I might add well put together. Is it time to start taking Playboy again?

Laurent Ponsot's part in this is amazing and he deserves a ton of credit for his persistence in this matter. When this is all settled the WB nation should simultaneously salute him by drinking one of his wines.

[Anthony Hall (Online)]

Great post and some deep thought from you Curtis. Thank you. Loved the "time to put lipstick on this pig" quote.

Feel free to correct me if I am wrong, but I am unaware of any significant changes to wine auctioning law that have been either enacted or asked for by the major auction houses.

You are spot on. The auction industry needs to adopt a new charter that self regulates itself out of this mess. Then our choice as consumers is simple - only do business with auction houses that obey the berserker charter.

[John Morris]

However in February of this year, in conjunction with my investigation of the Rudy Kurniawan wines being offered for sale in the Spectrum/Vanquish auction, I learned from a third party about Acker’s sale of an alleged OWC case of 1962 Romanée Conti at its December 8, 2011 auction in Hong Kong. ...

The catalog represented that the wine was “AN ORIGINAL WOODEN CASE OF THE LEGENDARY 1962 DRC ROMANEE CONTI. This gorgeous case comes to us from deep within the heart of Switzerland, where it has been nestled away safely under ideal conditions, waiting for this moment.” The lot description further stated that “Upon inspection, Gil called me to tell me … that it was ‘the most beautiful case of RC I have ever seen!’”

In truth, the wine had been located in Los Angeles in January of 2011, where it was offered by Antonio Castanos to his customers. The wine was then shipped to the UK, where it was offered by Farr but then withdrawn from sale after Farr learned the source of the wine. The wine then somehow managed to find its way to Switzerland, from which it was then consigned to auction in Hong Kong with Acker. Two different brokers communicated with Acker in November 2011 before the sale to convey the above facts along with photographs of the bottles offered by Castanos and Farr with matching bottle numbers and the identical alleged OWC. Acker refused to withdraw the wine, claiming that Gil Lempert-Schwarz had personally spoken with Aubert de Villaine and that that Aubert knew the owner and was familiar with this particular case of wine and that it was legitimate. When Doug Barzelay and I spoke with Aubert on February 25 in San Francisco, Aubert told us that he has never met Gil Lempert-Schwarz, has never spoken with him on the phone, and most certainly did not vouch for the case of alleged 62 Romanée Conti or their alleged owner in Switzerland.

Wow! The plot really thickens again. Presumably this was the same supposedly impeccable Swiss source of the 57-vintage vertical of Petrus held recently on Long Island that Jay McInerney wrote about in his column on the tasting in the WSJ. Those wines, too, were acquired at an Acker auction in Hong Kong last year and McInerney quoted Acker attesting to their authenticity. He said he had dispatched his staff who inspected the cellar in Switzerland.

[Nick Ryan]

Apparently some random guy with a good-looking cellar in the Swiss mountains is making nice money laundering wine through it. Heh...

[Todd F r e n c h (Online)]

I'm cleaning up this thread to retain its importance as a truly historical thread on wine

[Andrew L.]

If you don't want them on this thread, which I fully understand as it is thread drift, please re-post them in another topic thread.

viewtopic.php?f=1&t=70716

[David Glasser]

But if a shop isn't on her "good guys" list, I'd be wary.

Understandable how you could/would say that,but it's too simplistic and subjectively narrow.

To clarify, since subsequent responses have been moved, I agree with this. My original statement was over-generalized and too simplistic. My larger point and meaning was that one needs to generally be wary/cautious if in the old/rare market. A list of "safe" auction houses and retailers does not imply that all others are suspect. Nor is it a guarantee that those on the "safe" list will always be 100% correct in detecting fakes.

[Don Cornwell]

From original post by Don Cornwell:

I learned from a third party about Acker’s sale of an alleged OWC case of 1962 Romanée Conti at its December 8, 2011 auction in Hong Kong. I’ve previously posted about this particular lot many pages back, including a list of several discrepancies which lead me to the conclusion that the wine is counterfeit...

The catalog represented that the wine was “AN ORIGINAL WOODEN CASE OF THE LEGENDARY 1962 DRC ROMANEE CONTI. This gorgeous case comes to us from deep within the heart of Switzerland, where it has been nestled away safely under ideal conditions, waiting for this moment.” The lot description further stated that “Upon inspection, Gil called me to tell me … that it was ‘the most beautiful case of RC I have ever seen!’”

In truth, the wine had been located in Los Angeles in January of 2011, where it was offered by Antonio Castanos to his customers. The wine was then shipped to the UK, where it was offered by Farr but then withdrawn from sale after Farr learned the source of the wine. The wine then somehow managed to find its way to Switzerland, from which it was then consigned to auction in Hong Kong with Acker. Two different brokers communicated with Acker in November 2011 before the sale to convey the above facts along with photographs of the bottles offered by Castanos and Farr with matching bottle numbers and the identical alleged OWC. Acker refused to withdraw the wine, claiming that Gil Lempert-Schwarz had personally spoken with Aubert de Villaine and that that Aubert knew the owner and was familiar with this particular case of wine and that it was legitimate. When Doug Barzelay and I spoke with Aubert on February 25 in San Francisco, Aubert told us that he has never met Gil Lempert-Schwarz, has never spoken with him on the phone, and most certainly did not vouch for the case of alleged 62 Romanée Conti or their alleged owner in Switzerland.

Frank Drew wrote:
I'd rather not make any assumptions based on incomplete information, so I'd love to hear some follow up to this matter. It should not have been difficult for John Kapon to verify whether or not Lempert-Schwarz spoke with de Villaine; I'd think it would have been in both Kapon's personal and commercial interest to provide a public clarification. Did he? Did Lempert-Schwarz make any public statements about it?Did the case of wine sell at the Hong Kong auction, and, if so, did the story of its questionable provenance reach the ears of the buyer?

Frank:

The 62 Romanee Conti sold for $199,875 including premium. To the best of my knowledge, Mr. Kapon and Mr. Lempert-Schwarz never disclosed publicly that the two brokers (or anyone else) had questioned the authenticity or the true origin of the wine. The explanation about Gil Lempert-Schwarz's alleged conversation with Aubert de Villaine was not offered publicly (to my knowledge). Instead, this was the excuse given to the brokers (and confirmed in emails) for not pulling this case out of auction. Mr. Kapon received my letter of March 25, 2012 informing him of what Aubert de Villaine told Doug Barzelay and I in our meeting in SF on February 25. Mr. Kapon wrote back to me stating that he disagreed with my letter in unspecified respects but he did not address any of the facts in the letter (which are described in my initial post.) To the best of my knowledge, Mr. Lempert-Schwarz has not publicly made the claim to have spoken with Aubert de Villaine about the wine except in emails and phone conversations with the two brokers.

I was told by a friend that the buyer of the wine was Asian. I don't whether the buyer was ever informed about my belief that the wine is counterfeit or that it came from Rudy and Castanos, but I doubt it.

[Todd F r e n c h (Online)]

An extensive Huffington Post article on the Kurniawan affair just published:

http://www.huffingtonpost.com/2012/08/0 ... p_ref=wine

[JLLeDu]

An extensive Huffington Post article on the Kurniawan affair just published:

http://www.huffingtonpost.com/2012/08/0 ... p_ref=wine

Great article. In retrospect, it is pretty ironic that Rudy would have chosen as aliases the names of old iconic Indonesian Badminton stars, a sport that gained notoriety at the last Olympics for match fixing.

[Todd F r e n c h (Online)]

An extensive Huffington Post article on the Kurniawan affair just published:

http://www.huffingtonpost.com/2012/08/0 ... p_ref=wine

Great article. In retrospect, it is pretty ironic that Rudy would have chosen as aliases the names of old iconic Indonesian Badminton stars, a sport that gained notoriety at the last Olympics for match fixing.

Perhaps it was he who inspired them!

[Brad Kane]

An extensive Huffington Post article on the Kurniawan affair just published:

http://www.huffingtonpost.com/2012/08/0 ... p_ref=wine

Btw, I'm sure a bunch of folks here know the author. Dan was a long time participant on the Squire's Board from its inception and I think he might've been part of the Compuserve group before that, though I'm not sure. Nice to see a wine knowledgeable person behind the piece. Well done, Dan.

[Zev R]

"Kurniawan also hosted lavish tasting dinners in Los Angeles...these dinners were taken to be an example of his well-publicized generosity. Less well known was that he charged dinner guests $5,000 each, according to two people who were invited to these dinners."

I'm pretty sure this is the first time I ever heard this.

[NickWittman]

"Kurniawan also hosted lavish tasting dinners in Los Angeles...these dinners were taken to be an example of his well-publicized generosity. Less well known was that he charged dinner guests $5,000 each, according to two people who were invited to these dinners."

I'm pretty sure this is the first time I ever heard this.

Remember getting an invite as well, make it three people. An easy pass . . .

[Bruce Leiserowitz]

"Kurniawan also hosted lavish tasting dinners in Los Angeles...these dinners were taken to be an example of his well-publicized generosity. Less well known was that he charged dinner guests $5,000 each, according to two people who were invited to these dinners."

I'm pretty sure this is the first time I ever heard this.

I also seem to recall that, earlier in this thread, Don Cornwell himself made reference to Rudy charging for at least some of his tastings.

Bruce

[Don Cornwell]

"Kurniawan also hosted lavish tasting dinners in Los Angeles...these dinners were taken to be an example of his well-publicized generosity. Less well known was that he charged dinner guests $5,000 each, according to two people who were invited to these dinners."

I'm pretty sure this is the first time I ever heard this.

I also seem to recall that, earlier in this thread, Don Cornwell himself made reference to Rudy charging for at least some of his tastings.

Bruce

Bruce:

Yes, the first Romanee Conti vertical that Rudy organized back in 2002 or 2003, where Rudy claimed to have bought all of the wines from Europe, was $5,000 a seat. I declined to attend.

[Andrew Kaufman]

Yes, the first Romanee Conti vertical that Rudy organized back in 2002 or 2003, where Rudy claimed to have bought all of the wines from Europe, was $5,000 a seat. I declined to attend.

Don I am so proud of your efforts in this matter. You give our profession a positive and proactive (and more accurate) portrayal.

[Curtis Raskin]

Yes, the first Romanee Conti vertical that Rudy organized back in 2002 or 2003, where Rudy claimed to have bought all of the wines from Europe, was $5,000 a seat. I declined to attend.

Don I am so proud of your efforts in this matter. You give our profession a positive and proactive (and more accurate) portrayal.

+1

[Don Cornwell]

Yes, the first Romanee Conti vertical that Rudy organized back in 2002 or 2003, where Rudy claimed to have bought all of the wines from Europe, was $5,000 a seat. I declined to attend.

Don I am so proud of your efforts in this matter. You give our profession a positive and proactive (and more accurate) portrayal.

Thank you Andy.

By default this turned into my biggest pro bono matter. But its something I felt compelled to do. I'm just hoping that the Justice Deparment and the the FBI follow through witth additional arrests and charges because the problem is obviously bigger than just Rudy.

[Ken V]

An extensive Huffington Post article on the Kurniawan affair just published:

http://www.huffingtonpost.com/2012/08/0 ... p_ref=wine

...Wine Berserkers, the most popular online wine board and a gathering place for Burgundy lovers.

[Ken V]

Yes, the first Romanee Conti vertical that Rudy organized back in 2002 or 2003, where Rudy claimed to have bought all of the wines from Europe, was $5,000 a seat. I declined to attend.

Don I am so proud of your efforts in this matter. You give our profession a positive and proactive (and more accurate) portrayal.

Thank you Andy.

By default this turned into my biggest pro bono matter. But its something I felt compelled to do. I'm just hoping that the Justice Deparment and the the FBI follow through witth additional arrests and charges because the problem is obviously bigger than just Rudy.

Don, could you explain this part:

Don Cornwell says he got his first real look at wine counterfeiting in 1986 as a young attorney working in Los Angeles when the manager of a local wine store ushered him into the store's basement.

Why would the manager have shown you that? Did he know you were an attorney?

[Don Cornwell]

Don, could you explain this part:

Don Cornwell says he got his first real look at wine counterfeiting in 1986 as a young attorney working in Los Angeles when the manager of a local wine store ushered him into the store's basement.

Why would the manager have shown you that? Did he know you were an attorney?

Ken:

Yes, he knew I was an attorney with both litigation and employment law experience. The manager knew that he was likely to be fired because he had protested to the store owner when, literally overnight, 10 cases of 1982 Jaboulet La Chapelle had become 10 cases of 1983 La Chapelle. He called me in the middle of the day at my office and requested that I come immediately to the store telling me that it was a legal matter and extremely urgent and that it could not wait. When I arrived he brought me downstairs to the cellar and showed me the evidence -- not just of the the Jaboulet but of a lot of 81 and 83 bordeaux that had been turned into 82 bordeaux. It was amazing and appalling at the same time. The cardboard cartons on the La Chapelle showed very obvious indications of chemical erasure where the 1982 had been removed and 1983 stamped in its place. The labels looked fine on the surface, but I discovered later that there were some differences in the colors. The labels on the bordeaux (with fewer colors and simpler designs) looked correct (but I didn't have good exemplars to make a side by side comparison at the time), but when I looked at the wooden boxes it was obvious that someone had sanded off the 83 and then burned in 82 and the numbers didn't match.

The manager said he knew from the owner's reaction to what he had said that he was going to be fired. A day later, he was. I bought a bottle or two of the relabeled 83 Jaboulet as evidence. (I already owned legitimate examples of both the 82 and 83 -- and the 82 was a fine wine, but it was $10 a bottle cheaper -- $29.95 instead of $39.95. YES the store owner relabled the wine in order to make $10 a bottle x 10 cases, or $1,200). When I got the wine home and compared it with my 82 and 83 I discovered something I hadn't noticed in the store. Between 82 and 83 Jaboulet had changed its bottles and one bottle was nearly a third of an inch higher. (I don't remember which at this point.) When you put the legitmate 83 next to the fake 83 it was really obvious. There were also some obvious color differences in the two labels, especially on the neck label with the multicolor chapel drawing.

With the help of another former manager of that same store (who also knew that counterfeiting had been going on there for years but had not told me previously) we reported the Jaboulet situation to the local rep for Frederic Wildman. I also contacted the attorney in charge of the consumer fraud division of the Los Angeles District Attorney's office. The DA's office opened an investigation and, for about three or four weeks, Wildman was gung ho to pursue the matter. Another former employee of the store who had quit working there told me that the owner regularly sent employees to a certain printer to pick up labels he had printed and that the owner had a professional corking machine and other equipment in his garage at home.

But after Wildman's senior management got involved and started talking to the DA's office, they got cold feet. They decided that it would be bad for the Jaboulet brand if it was disclosed that a retailer was involved in counterfeiting their wines (technically, relabeling the 82 as 83.) So they told the DA's office they no longer wanted to pursue the matter from their end. The DA's office determined that without Jaboulet's assistance and testimony there was no case. The DA's office elected not to pursue the counterfeit bordeaux issue further either. So my initial experience with wine counterfeiting had a very unsatisfactory ending. The whistleblower got fired and the store owner got away with it.

[Anthony Hall (Online)]

So my initial experience with wine counterfeiting had a very unsatisfactory ending. The whistleblower got fired and the store owner got away with it.

Well that was before beserkers !

[Ken V]

Don, could you explain this part:

Don Cornwell says he got his first real look at wine counterfeiting in 1986 as a young attorney working in Los Angeles when the manager of a local wine store ushered him into the store's basement.

Why would the manager have shown you that? Did he know you were an attorney?

Ken:

Yes, he knew I was an attorney with both litigation and employment law experience. The manager knew that he was likely to be fired because he had protested to the store owner when, literally overnight, 10 cases of 1982 Jaboulet La Chapelle had become 10 cases of 1983 La Chapelle. He called me in the middle of the day at my office and requested that I come immediately to the store telling me that it was a legal matter and extremely urgent and that it could not wait. When I arrived he brought me downstairs to the cellar and showed me the evidence -- not just of the the Jaboulet but of a lot of 81 and 83 bordeaux that had been turned into 82 bordeaux. It was amazing and appalling at the same time. The cardboard cartons on the La Chapelle showed very obvious indications of chemical erasure where the 1982 had been removed and 1983 stamped in its place. The labels looked fine on the surface, but I discovered later that there were some differences in the colors. The labels on the bordeaux (with fewer colors and simpler designs) looked correct (but I didn't have good exemplars to make a side by side comparison at the time), but when I looked at the wooden boxes it was obvious that someone had sanded off the 83 and then burned in 82 and the numbers didn't match.

The manager said he knew from the owner's reaction to what he had said that he was going to be fired. A day later, he was. I bought a bottle or two of the relabeled 83 Jaboulet as evidence. (I already owned legitimate examples of both the 82 and 83 -- and the 82 was a fine wine, but it was $10 a bottle cheaper -- $29.95 instead of $39.95. YES the store owner relabled the wine in order to make $10 a bottle x 10 cases, or $1,200). When I got the wine home and compared it with my 82 and 83 I discovered something I hadn't noticed in the store. Between 82 and 83 Jaboulet had changed its bottles and one bottle was nearly a third of an inch higher. (I don't remember which at this point.) When you put the legitmate 83 next to the fake 83 it was really obvious. There were also some obvious color differences in the two labels, especially on the neck label with the multicolor chapel drawing.

With the help of another former manager of that same store (who also knew that counterfeiting had been going on there for years but had not told me previously) we reported the Jaboulet situation to the local rep for Frederic Wildman. I also contacted the attorney in charge of the consumer fraud division of the Los Angeles District Attorney's office. The DA's office opened an investigation and, for about three or four weeks, Wildman was gung ho to pursue the matter. Another former employee of the store who had quit working there told me that the owner regularly sent employees to a certain printer to pick up labels he had printed and that the owner had a professional corking machine and other equipment in his garage at home.

But after Wildman's senior management got involved and started talking to the DA's office, they got cold feet. They decided that it would be bad for the Jaboulet brand if it was disclosed that a retailer was involved in counterfeiting their wines (technically, relabeling the 82 as 83.) So they told the DA's office they no longer wanted to pursue the matter from their end. The DA's office determined that without Jaboulet's assistance and testimony there was no case. The DA's office elected not to pursue the counterfeit bordeaux issue further either. So my initial experience with wine counterfeiting had a very unsatisfactory ending. The whistleblower got fired and the store owner got away with it.

Thanks, Don. It wasn't clear to me from the article that it was the owner and not the manager who was doing the counterfeiting. I'm glad I asked because it is an interesting story that illustrates how hard this problem can be to stop.

[Al Osterheld]

Ironically, I think the 1982 La Chapelle turned out to be the better wine (the latter got a larger RP score, the former got better and better over the years).

-Al

[John Morris]

I haven't had the 82 in years, and never had them side by side, but the 82 certainly outperformed expectations.

[Claude Kolm]

but the 82 certainly outperformed expectations.

That's because someone reporting back then got the 1982 vintage wrong in the Northern Rhône; oh, and Burgundy, too, and 1981 in the Southern Rhône, and . . . .

[Tom Blach (Online)]

One of those rather rare people, in fact, who manage to be wrong about everything.

[Todd F r e n c h (Online)]

One of those rather rare people, in fact, who manage to be wrong about everything.

A meteorologist??

[Bill Boykin]

One of those rather rare people, in fact, who manage to be wrong about everything.

To whom are you referring?

[David Glasser]

How many posts before this offshoot gets clipped and re-planted as its own thread?

[Roberto Rogness]

Don, didn't he actually get caught doing the same with some Montrachet once but the wine was already out of the country?

[Chuck Miller (Online)]

Is this person still active ITB?