RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

[Todd F r e n c h]

I'm guessing that there was so much money made (by Kapon and others) that they were more than willing to take the risk. I'm guessing also that they expect nothing more than a slap on the wrist or a fine (that is far less than the profits made from this behavior)

[Charlie Fu]

Way to do due diligence....surprising really they are still in business....

Nearly as bad as Spectrum....

I am not sure how much capital Spectrum had at risk (other than the potential commissions) but it is clear that Kapon and his gang had a lot of capital at risk and therefore the incentive to participate in the scam was quite high

I think Ackers looks far worse than Spectrum in this. You have a history of deliberate ignorance of fake wine by Ackers.. pretty rough stuff.

[Lewis Dawson]

I think Ackers looks far worse than Spectrum in this. You have a history of deliberate ignorance of fake wine by Ackers.. pretty rough stuff.

If one accepts Don's direct, first-hand evidence that Spectrum knew Antonio Castanos consigned on behalf of Rudy Kurniawan, then it is very difficult IMO to make any excuses for Spectrum or Vanquish. Richard Brierley has known Rudy and his fakery for years. Spectrum has too. Acker's hat is black, it would appear, but I don't see how one can say Spectrum/Vanquish hats are any less black.

[andy velebil]

Way to do due diligence....surprising really they are still in business....

Nearly as bad as Spectrum....

I am not sure how much capital Spectrum had at risk (other than the potential commissions) but it is clear that Kapon and his gang had a lot of capital at risk and therefore the incentive to participate in the scam was quite high

I think Ackers looks far worse than Spectrum in this. You have a history of deliberate ignorance of fake wine by Ackers.. pretty rough stuff.

Charlie,
With respect, how many friends do you have and or hang out with that do or did work at Spectrum? Full disclosure would be nice.

[Charlie Fu]

I am not sure how much capital Spectrum had at risk (other than the potential commissions) but it is clear that Kapon and his gang had a lot of capital at risk and therefore the incentive to participate in the scam was quite high

I think Ackers looks far worse than Spectrum in this. You have a history of deliberate ignorance of fake wine by Ackers.. pretty rough stuff.

Charlie,
With respect, how many friends do you have and or hang out with that do or did work at Spectrum? Full disclosure would be nice.

FULL DISCLOSURE (which I think is stupid since I don't care about a company that no one I know actually owns a part of) I guess if the photographer is a worker then I hang out with him, but I think he's already told the forum he doesn't actually work for them outside of an independent contractor. And I think I've already said I'm friends with Powell Yang but I haven't spoken to him in over a year. *shrug*. Doesn't really color my opinion. Spectrum was wrong, but I think we don't seem to drop the same boomstick on Ackers that's on Spectrum and we should.

If this stuff has been going on for years with Ackers, why are we now finally just discussing them? I see plenty of people saying they'll never buy from Spectrum again after this incident, but no one with Ackers? Would we even have this Spectrum issues if JK didn't empower Rudy and the like with his blind eye to their fakes?

[Charlie Fu]

I think Ackers looks far worse than Spectrum in this. You have a history of deliberate ignorance of fake wine by Ackers.. pretty rough stuff.

If one accepts Don's direct, first-hand evidence that Spectrum knew Antonio Castanos consigned on behalf of Rudy Kurniawan, then it is very difficult IMO to make any excuses for Spectrum or Vanquish. Richard Brierley has known Rudy and his fakery for years. Spectrum has too. Acker's hat is black, it would appear, but I don't see how one can say Spectrum/Vanquish hats are any less black.

Both are in poor positions. I just think Ackers is worse as it's been going on for far longer and with more than just Rudy as Don has pointed out.

[andy velebil]

Charlie
Thanks as I remember a dinner or two where someone you knew was at who also worked at Spectrum (excluding Ryan of course, who I also know). I didn't know his involvement with Spectrum or your interactions with him.

And I agree with you about Acker.

[paul hanna]

I think Ackers looks far worse than Spectrum in this. You have a history of deliberate ignorance of fake wine by Ackers.. pretty rough stuff.

If one accepts Don's direct, first-hand evidence that Spectrum knew Antonio Castanos consigned on behalf of Rudy Kurniawan, then it is very difficult IMO to make any excuses for Spectrum or Vanquish. Richard Brierley has known Rudy and his fakery for years. Spectrum has too. Acker's hat is black, it would appear, but I don't see how one can say Spectrum/Vanquish hats are any less black.

Both are in poor positions. I just think Ackers is worse as it's been going on for far longer and with more than just Rudy as Don has pointed out.

I agree.

The thing about Spectrum though is that we know they deliberately sold fakes (as detailed prior) knowing what they were doing, where with Acker it's doesn't appear quite so straight forward, but may actually be (by looking at now a lot of what went of for a long time) a much worse scenario.

We just can't quite seem to see it as being so black and white with Acker as with Spectrum at this point in time on what has been presented (IMHO). Certainly it doesn't look good for Acker, and the more that is uncovered, the worse it seems it will get for them....

[SteveC]

I would never buy from Acker, Christies, Zachys, or Spectrum, unless each does a massive overhaul of their auction business and personnel. As it is, there is at least one NY retailer with whom I am very reluctant to do business with going forward (and this is someone that I have bought tons of wine from in the past). There is another NY retailer that I am also worried about (along with some others located outside of the area).

I am seriously thinking about having someone assess my wine for counterfeits. I tend not to buy first growths and a lot of grand crus. Most of my wines are super seconds, 1ers, lesser GCs, and village wines. Still, I am worried. I recently bought a bottle of 64 Montorfino. I am hoping it's ok.

All of this has me very worred, and I am not a heavy hitter!

[Ken V]

... I recently bought a bottle of 64 Montorfino. .... and I am not a heavy hitter!

You're a heavy hitter in my book!

[SteveC]

... I recently bought a bottle of 64 Montorfino. .... and I am not a heavy hitter!

You're a heavy hitter in my book!

Birth year wine for me Ken. That is all in that case.

[David Glasser]

I think Ackers looks far worse than Spectrum in this. You have a history of deliberate ignorance of fake wine by Ackers.. pretty rough stuff.

If one accepts Don's direct, first-hand evidence that Spectrum knew Antonio Castanos consigned on behalf of Rudy Kurniawan, then it is very difficult IMO to make any excuses for Spectrum or Vanquish. Richard Brierley has known Rudy and his fakery for years. Spectrum has too. Acker's hat is black, it would appear, but I don't see how one can say Spectrum/Vanquish hats are any less black.

Not that I'm questioning the underlying veracity or accuracy of Don's posts (I'm not), but the evidence he's posted here that Castanos consigned on behalf of Kurniawan is second-hand, and would be considered hearsay if presented by Don as testimony in a US court.

That said, I agree that Acker looks very bad in this, as does Spectrum.

[John Morris (Online)]

I'm not sure that's right, as a matter of evidence law, David. Don said it was an employee of Spectrum (or Vanquish) who told him, so that would be an admission against interest, if my (rather rusty) recollection of evidence law is correct. If so, that would be admissible against the auction house, I think (i.e., an exception to the hearsay rule).

[Barry L i p t o n]

Wouldn't that only apply if the declarant was unable to testify?

[David Glasser]

I'm clearly in over my head here, with no legal training beyond my lawyer wife's comments while we're watching the latest legal drama on the tube. I thought it was hearsay if you heard someone else say it, and that wasn't admissible unless the actual witness was unable (not unwiling) to testify. If the lawyers here say that's not hearsay, I certainly won't argue the point.

[Lewis Dawson]

Before we devolve any further into the rules of evidence, Don Cornwell has posted that Antonio Castanos himself says that he disclosed his relationship with Rudy to Spectrum. Post #1121 and #1549. So lets subpoena Castanos to this thread and ask him if he told Spectrum the wines came from Rudy. We need to do that quickly, before the FBI thinks of asking him..

[Charlie Fu]

I'm not sure that's right, as a matter of evidence law, David. Don said it was an employee of Spectrum (or Vanquish) who told him, so that would be an admission against interest, if my (rather rusty) recollection of evidence law is correct. If so, that would be admissible against the auction house, I think (i.e., an exception to the hearsay rule).

nothing I hated more in law school than "exception" v. "exemption". But I do remember it drilled in my head that Party Admission against interest is an exemption. Doesn't change what you're saying, if the employee is a party to the case (officer maybe? I wonder if just an "employee" would count) then it'd be admissible as non hearsay.

[Charlie Fu]

Wouldn't that only apply if the declarant was unable to testify?

I wiki'd this :D. That is a statement against interest and can be party neutral. What John is talking about has to be a party to the case that is making the comment against the interest of their own party.

[Corey Miller]

You guys are mixing up the party admission and the admission against interest. A party admission does not require an unavailable declarant, although I think an admission against interest does.

The issue with employees and whether their statements count as party admissions when the employer is the party is whether the statement was made within the scope of the employment, which can be a tricky issue. Was revealing the consignor to an outside third party within the scope of the declarant's employment? We'd want to look at caselaw to see whether the jurisdiction construes the scope of employment broadly or narrowly.

This all would require Spectrum to be an opposing party. If Spectrum is not an opposing party, you'd have to use the admission against interest, where the declarant must be unavailable and the statement must be contrary to the declarant's pecuniary interest or likely to expose the declarant to criminal or civil liability. I don't think this would apply -- the statement might expose Spectrum to liability, but without knowing additional facts it seems unlikely to expose the declarant to liability. Maybe if you could show that the statement indicates the declarant was a participant in a fraud, and that the statement shows the declarant had the necessary mental state for the fraud, you might get it in.

[Don Cornwell]

Not that I'm questioning the underlying veracity or accuracy of Don's posts (I'm not), but the evidence he's posted here that Castanos consigned on behalf of Kurniawan is second-hand, and would be considered hearsay if presented by Don as testimony in a US court.

That said, I agree that Acker looks very bad in this, as does Spectrum.

David:

In the case of Spectrum, it's actually both. The initial information I had obtained about Castanos consigning there on behalf of Rudy, and that fact being well known to Spectrum's personnel, was second-hand, or hearsay, as you say. However, that information was directly confirmed to me by the individual I spoke to at Spectrum (as set forth in the first few pages of this thread). That is what would be termed a "party admission" by Spectrum and is not hearsay. Moreover, Mr. Castanos himself has confirmed this information directly to the FBI and to others that I know. I also strongly suspect that several Spectrum personnel have confirmed Spectrum's knowledge of the Castanos-Kurniawan connection to the FBI.

[John Morris (Online)]

Like I said, my memory of the evidence rules is a bit rusty, having not practiced in 22 years. But isn't it an admission against interest as well as a party admission?

[Don Cornwell]

Like I said, my memory of the evidence rules is a bit rusty, having not practiced in 22 years. But isn't it an admission against interest as well as a party admission?

John:

Yes it would be, but as previously noted, that exception is generally limited to situations where the witness is unavailable to testify. However, that's a largely moot point, because even if the witness did testify, and denied having any such knowledge, the statement could then be used as the basis of impeachment as a "prior inconsistent statement."

[Brian G r a f s t r o m]

I think there are some folks with great imaginations here.

The people making the comments to which you are referring are in a better position to know than most people (lawyers, former white collar crime prosecutor, police officer); I believe 'em.

[JLLeDu]

Part III – GREENBERG’S INITIAL 2003 SALES AT ZACHYS AND ACKER AUCTION

According to Maureen’s deposition testimony, after informing Greenberg of the discrepancies discovered with the Jayer wines, Greenberg told her he wanted to taste some of the rejected bottles for himself and asked her to bring some samples to Restaurant Daniel where he was planning to dine that evening. Maureen hand-carried the bottles to the restaurant and left them for Greenberg.

The next morning Greenberg called to tell her that he had tasted some of the wines and he “congratulated me on a job well done. And said that the wines that he had had were great examples of village wines. And he acknowledged that they were not the Grand Cru wines that they purported themselves to be on the labels. And because we couldn't represent them, he was happy to drink them, and that he would take them back.” [Downey Depo. p, 124, lines 14-21]. In her earlier post on the Jancis Robinson site, Maureen added one other notable tidbit from their phone conversation: “He did still balk, stating that this proprietor [Henri Jayer] was an old man who wasn’t necessarily consistent or knowledgeable about what was going on in his own cellar and that some were likely correct despite the cork inconsistency. I politely stated that despite his knowledge and possible insider info or opinions about the happenings at the domaine, we were compelled to stand by research we had in hand, and there was no way I/we could represent any wines with confirmed inconsistencies. He said it was unfortunate, but he would happily drink the wines himself. It was an amicable conversation.” [Ex. 11].

(Next….Part IV—Greenberg Consigns Alleged Counterfeit Magnums to Acker Auction in 2004 and Sells Alleged Counterfeit Petrus to Chicago Wine Company in 2005)

Interesting info from Maureen.
I was the sommelier that night at Daniel and was in charge of a party of 6-8 pple that included Mr Greenberg, the 2 principals from Royal Wine Merchant, a well known West Coast collector (I don't remember if Rudy was there or not).
While I don't recall all of the wines they brought with them, they did bring a bottle of what was supposedly a Vosne Romanee 1er Cru Cros Parantoux 1990 by Henri Jayer. I paid close attention to this bottle in particular because a NY dealer had tried to slip me a fake of this wine a few months prior. Within a short few years the wines of Mr. Jayer had become very highly collectible and had become prime targets for fakes.
When I opened the bottle, the cork was missing the normal infos on a Jayer cork: name of wine, vintage and name of estate stamped in script (instead it was stamped with the general "Mis en bouteille au domaine". Also, the bottle was missing the usual neck label "Ce vin n'a pas ete filtre".
I pointed this out to the party and was told by one of the Royal Wine Merchants principals that they had bought a lot of wine from Mr Jayer directly and he had bottled these and sold these with non-descript capsules and corks to avoid paying taxes...
I did taste the wine. While it was well made and consistent with the vintage, it was no Cros Parantoux 90. I do believe this bottle was fake.

[Keith Levenberg]

Fascinating to hear this story from so far back from so many perspectives. Thanks for contributing Jean-Luc.

The comment from the Royal boys is patently ridiculous; how would the tax authorities have any idea what was printed on the cork? In what possible way could a non-descript cork lower the tax rate applicable to a 1er Cru when the label clearly indicates 1er Cru?

[Bruce Leiserowitz]

The comment from the Royal boys is patently ridiculous; how would the tax authorities have any idea what was printed on the cork? In what possible way could a non-descript cork lower the tax rate applicable to a 1er Cru when the label clearly indicates 1er Cru?

Besides the fact that it would be difficult to maintain a poker face in response to the explanation, their cover story for the lack of appropriate markings is that they conspired with the winery to engage in tax fraud. This isn't exactly the type of information that would tend to make one feel all warm and fuzzy towards the wine merchant in question, is it?

Bruce

[Cole Kendall]

The comment from the Royal boys is patently ridiculous; how would the tax authorities have any idea what was printed on the cork? In what possible way could a non-descript cork lower the tax rate applicable to a 1er Cru when the label clearly indicates 1er Cru?

Besides the fact that it would be difficult to maintain a poker face in response to the explanation, their cover story for the lack of appropriate markings is that they conspired with the winery to engage in tax fraud. This isn't exactly the type of information that would tend to make one feel all warm and fuzzy towards the wine merchant in question, is it?

Bruce

Bruce, did you ever get the Royal wine faxes/messages? The whole tone was wild and wooly and about a half step from "Six Cases of Hanky J's best just fell off the TRUCK and we got them!!!!" So the sleazy tax story is almost part of their corporate culture as it were.

Here is a sample: https://docs.google.com/open?id=0B7WNBZ ... 0Z0eU43UWc

[Bruce Leiserowitz]

Bruce, did you ever get the Royal wine faxes/messages? The whole tone was wild and wooly and about a half step from "Six Cases of Hanky J's best just fell off the TRUCK and we got them!!!!" So the sleazy tax story is almost part of their corporate culture as it were.

Here is a sample: https://docs.google.com/open?id=0B7WNBZ ... 0Z0eU43UWc

Cole--I don't think I ever got their wine offers.

Bruce

[JLLeDu]

The comment from the Royal boys is patently ridiculous; how would the tax authorities have any idea what was printed on the cork? In what possible way could a non-descript cork lower the tax rate applicable to a 1er Cru when the label clearly indicates 1er Cru?

Besides the fact that it would be difficult to maintain a poker face in response to the explanation, their cover story for the lack of appropriate markings is that they conspired with the winery to engage in tax fraud. This isn't exactly the type of information that would tend to make one feel all warm and fuzzy towards the wine merchant in question, is it?

Bruce

Why do you think I added 3 little dots at the end of my sentence?

[JLLeDu]

I do believe, and I could be proven wrong, that the whole Rudy story started way before he was ever involved. There are just too many connecting dots.
I think he just walked by and saw an opportunity.
However, I met the guy a few times and he always seemed to me as too precious and self-involved to pull off what he has allegedly done (that's what I meant when I wrote about the making of a movie about Rudy many posts ago).
He's been glorified on this board for his tasting abilities. I got news for you. The guys from Royal are actually way better tasters, especially Jeff.
I really don't feel sorry for anyone who ever bought wine from him. This is a story of "boy, do I have a bridge to sell you?".
I just went on winesearcher a couple minutes ago. There are 3 Mags of La Tour a Pomerol 61 for sale. I'm still trying to wrap my brain around the fact that in the last 51 years only 2 were consumed. and I have an empty one at the store (sorry Rudy, but it's not for sale).
Does any wine collector in his/her right mind thinks that there are that many bottles left in the world of 50's or 60's (or older) "world class Burgundy" (or wherever-better check your 90 Soldera or Rayas-) around?
When it comes to rare and amazing stuff (unless it's 1st Growth Bordeaux), there's not even enough stuff to get a small village drunk. Yet those bottles appear in cases stack all throughout the internet, auctions and dealers stock on winesearcher and whateverfinder.
If you are really into wine, buy great stuff when it's young and available and cellar it. Stop looking for those old trophy wines.
That's unless you're at the estate and they open a bottle for you.
There are still some (maybe many) great cellars around the country with small stocks of amazing old great wines. However those come up rarely, and when they do come up, they are worth the grabbing.
Wine is about the passion to discover new estates, regions, countries, etc.
Wine is about the journey, not the destination.

I'll finish on this note:
About 15 years ago I bought a mixed case of Burgundy at auction from Acker. The case was labelled as "mixed 1970's Burgundies". When the case arrived at Daniel I pulled out one of the bottle and it was a Cros Parantoux 78. I went up to Daniel's office and we enjoyed it with a piece of cheese and this was one of the 10 greatest bottle of wine I had in my life. Cost-Around $45 per bottle). Now, that was an amazing experience which I'll remember for the rest of my life. An no, I'm not worried about the wether it's real or not.

[Keith Levenberg]

He's been glorified on this board for his tasting abilities.

Yes, I've been puzzled by this too. The only firsthand accounts I've seen of Rudy's tasting abilities come from, um, Rudy, and yet everyone seems to be taking this at face value while acknowledging that he's been a fraud in everything else.

[JLLeDu]

He's been glorified on this board for his tasting abilities.

Yes, I've been puzzled by this too. The only firsthand accounts I've seen of Rudy's tasting abilities come from, um, Rudy, and yet everyone seems to be taking this at face value while acknowledging that he's been a fraud in everything else.

Yes Keith, the fact that Rudy would be considered a good taster has always been kind of a mystery to me as well. I only met him a few times but he never struck me as a great taster. Parker is a very good taster, Jancis Robinson is a great one. Best of all in my opinion is Michel Bettane. But Rudy? Come on!

[Chuck Miller]

I do believe, and I could be proven wrong, that the whole Rudy story started way before he was ever involved. There are just too many connecting dots.
I think he just walked by and saw an opportunity.
However, I met the guy a few times and he always seemed to me as too precious and self-involved to pull off what he has allegedly done (that's what I meant when I wrote about the making of a movie about Rudy many posts ago).
He's been glorified on this board for his tasting abilities. I got news for you. The guys from Royal are actually way better tasters, especially Jeff.
I really don't feel sorry for anyone who ever bought wine from him. This is a story of "boy, do I have a bridge to sell you?".
I just went on winesearcher a couple minutes ago. There are 3 Mags of La Tour a Pomerol 61 for sale. I'm still trying to wrap my brain around the fact that in the last 51 years only 2 were consumed. and I have an empty one at the store (sorry Rudy, but it's not for sale).
Does any wine collector in his/her right mind thinks that there are that many bottles left in the world of 50's or 60's (or older) "world class Burgundy" (or wherever-better check your 90 Soldera or Rayas-) around?
When it comes to rare and amazing stuff (unless it's 1st Growth Bordeaux), there's not even enough stuff to get a small village drunk. Yet those bottles appear in cases stack all throughout the internet, auctions and dealers stock on winesearcher and whateverfinder.
If you are really into wine, buy great stuff when it's young and available and cellar it. Stop looking for those old trophy wines.
That's unless you're at the estate and they open a bottle for you.
There are still some (maybe many) great cellars around the country with small stocks of amazing old great wines. However those come up rarely, and when they do come up, they are worth the grabbing.

I'll finish on this note:
About 15 years ago I bought a mixed case of Burgundy at auction from Acker. The case was labelled as "mixed 1970's Burgundies". When the case arrived at Daniel I pulled out one of the bottle and it was a Cros Parantoux 78. I went up to Daniel's office and we enjoyed it with a piece of cheese and this was one of the 10 greatest bottle of wine I had in my life. Cost-Around $45 per bottle). Now, that was an amazing experience which I'll remember for the rest of my life. An no, I'm not worried about the wether it's real or not.

Josh, you clearly have a lot to contribute here, but you need to realize this is a real names BB, and you need to have your full real name in your profile or signature. And, it appears you are (or possibly were) in the business, in which case you need to note that in your signature with an ITB tag.

Also, one thing to note is that quite a few bottle on Winesearcher are the exact same bottles listed by multiple vendors. Too many vendors list things they have access to, but are not necessarily in their inventory/stock. But yes, for the most part, there are more far more bottles of the rare stuff than there should be.

[JLLeDu]

I do believe, and I could be proven wrong, that the whole Rudy story started way before he was ever involved. There are just too many connecting dots.
I think he just walked by and saw an opportunity.
However, I met the guy a few times and he always seemed to me as too precious and self-involved to pull off what he has allegedly done (that's what I meant when I wrote about the making of a movie about Rudy many posts ago).
He's been glorified on this board for his tasting abilities. I got news for you. The guys from Royal are actually way better tasters, especially Jeff.
I really don't feel sorry for anyone who ever bought wine from him. This is a story of "boy, do I have a bridge to sell you?".
I just went on winesearcher a couple minutes ago. There are 3 Mags of La Tour a Pomerol 61 for sale. I'm still trying to wrap my brain around the fact that in the last 51 years only 2 were consumed. and I have an empty one at the store (sorry Rudy, but it's not for sale).
Does any wine collector in his/her right mind thinks that there are that many bottles left in the world of 50's or 60's (or older) "world class Burgundy" (or wherever-better check your 90 Soldera or Rayas-) around?
When it comes to rare and amazing stuff (unless it's 1st Growth Bordeaux), there's not even enough stuff to get a small village drunk. Yet those bottles appear in cases stack all throughout the internet, auctions and dealers stock on winesearcher and whateverfinder.
If you are really into wine, buy great stuff when it's young and available and cellar it. Stop looking for those old trophy wines.
That's unless you're at the estate and they open a bottle for you.
There are still some (maybe many) great cellars around the country with small stocks of amazing old great wines. However those come up rarely, and when they do come up, they are worth the grabbing.

I'll finish on this note:
About 15 years ago I bought a mixed case of Burgundy at auction from Acker. The case was labelled as "mixed 1970's Burgundies". When the case arrived at Daniel I pulled out one of the bottle and it was a Cros Parantoux 78. I went up to Daniel's office and we enjoyed it with a piece of cheese and this was one of the 10 greatest bottle of wine I had in my life. Cost-Around $45 per bottle). Now, that was an amazing experience which I'll remember for the rest of my life. An no, I'm not worried about the wether it's real or not.

Josh, you clearly have a lot to contribute here, but you need to realize this is a real names BB, and you need to have your full real name in your profile or signature. And, it appears you are (or possibly were) in the business, in which case you need to note that in your signature with an ITB tag.

Also, one thing to note is that quite a few bottle on Winesearcher are the exact same bottles listed by multiple vendors. Too many vendors list things they have access to, but are not necessarily in their inventory/stock. But yes, for the most part, there are more far more bottles of the rare stuff than there should be.

I'm not sure if you are referring to me. My name is Jean Luc Le Du. I own a wine shop in New York called Le Du's Wines. I hope this clears any questions you have.

[JLLeDu]

And by the way Chuck, If 5 Magnums of of whatever wine was produced in 1961, what are the chances of finding even ONE in 2012. You tell me