RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

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Post #3551  Postby Stuart BeauneHead Niemtzow » June 26th 2012, 11:05am

good point, keith....

and...had Rudy insisted on the genuine article....he might still be in business.

And, are you distinguishing between genuine "bottles" and bottles of genuine wine?...the former was, I 'd think essential for VIP authentication. The latter, it sounds, much less so.

I'd guess that as time went buy..over those 6 years of his activities, he probably realized that showing the genuine article wasn't all that essential. Someday, it will be interesting to find out whether he even had genuine articles at some point...or whether they were used up early on.

I wonder if he asked for his own bottlings back, too, ie, whether he recycled some bottles multiple times on his "bottling line".

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Post #3552  Postby WvanGorp » June 26th 2012, 12:50pm

I'm amazed that people seem to be buying into the notion that, unlike us mere mortals, surely the critics would have been served "real" wine because they would not be likely to be able to have been fooled. First, I do not ascribe to the deity notion of critics. Second, I give a lot of the "mortal" tasters more credit than many of the posters. Many "lay" wine collectors have outstanding palates, in many cases as good as the priestly critics. To say that Meadows, Parker etc must have had the "real" wine and the others were mere dupes who were probably just fooled is insulting to the collector and credits too much the "powers" of the critic, if you will.
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Post #3553  Postby John Morris » June 26th 2012, 1:01pm

Stuart BeauneHead Niemtzow wrote:Someday, it will be interesting to find out whether he even had genuine articles at some point...or whether they were used up early on.


He was spending seven-figure sums on wine at auction and retail in the mid-decade, so it's fair to assume that he had a lot of authentic wine, I think.
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Post #3554  Postby Stuart BeauneHead Niemtzow » June 26th 2012, 1:25pm

One would think that, but.....in this case...there are lots of illusions..and delusions. I doubt we'll ever know. For all we know all the legit wines are sitting in a cave in Malaysia or wherever he is purportedly from.

I'm still haunted by his "it's zinfandel" remark at the Jayer Richebourg tasting link. He was trying to be brazen and nobody seemed to notice...anything.

My burning curiosity is about whether he pulled all of this off by himself? Thoughts anyone? I think he well might have. At first I thought that that was impossible, just like I thought Madoff couldn't possibly have acted alone. But, no one has been identified in either case. And, even Rudy probably couldn't believe how easy it was for him to pull this off.
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Post #3555  Postby Tom Blach » June 26th 2012, 1:51pm

I also strongly suspect he acted alone though there must have been bemusement at Patriarche!
I don't think any of our regular burgophiles would have made the Ponsot Clos St Denis mistake which speaks poorly of any advisor he may have had.
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Post #3556  Postby Stuart BeauneHead Niemtzow » June 26th 2012, 2:04pm

I think as Doug Barzelay reported it, Rudy and he shared a CSD from another Ponsot from a much earlier era. Rudy probably made note of "Ponsot" and the year...and took it from there, creating a case of the wine in his bottling "lab". Whoops.....when Barzelay said something to him, he reminded Barzelay that they shared the older wine..or something like that. http://oldvinenotes.com/2012/06/18/the- ... terfeiter/

The older Ponsot Clos St. Denis, however, had never existed. After the auction, at John Kapon’s request, Laurent, John, Rudy and I had lunch, John’s idea being that Rudy could explain to Laurent where he had gotten these wines. At the luncheon, despite Laurent’s polite but insistent questioning, Rudy remained vague and evasive, claiming he needed to check to see where he got these wines (this from someone who remembered virtually every bottle he ever drank or bought!), telling Laurent he would give him the information but putting him off as long as he could, before ultimately (some months later) handing him a fake name and phone numbers. However, before we left, Rudy pulled me aside, and asked me a question that gave the game away: didn’t I remember, he asked, a particular bottle that he had purchased a couple of years earlier, after outbidding Don Stott? It was a ’47 Ponsot Clos St. Denis. Didn’t that show that Ponsot must have been making Clos St. Denis at least as far back as ’47? I confess I smirked a bit as I informed him that in fact I did remember the bottle, and because I was interested I had looked into it; while it was only catalogued as “Ponsot”, in fact the producer of that bottle was “Christine Ponsot,” no relation to Laurent or the Domaine, but rather a label used by a negociant (Emile Chandesais, Christine Ponsot’s husband) with a stock of older Burgundies to sell.
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Post #3557  Postby Tom Blach » June 26th 2012, 2:38pm

I saw that, Stuart-but neither you or I would have fallen for that which makes you wonder how well informed he really was.
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Post #3558  Postby John Morris » June 26th 2012, 3:18pm

Hey, it's a mistake any of us could have made. I get my producers from the '30s confused all the time.
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Post #3559  Postby Lewis Dawson » June 26th 2012, 5:34pm

John Morris wrote:Hey, it's a mistake any of us could have made. I get my producers from the '30s confused all the time.

Indeed. I think a lot of folks could have made that mistake. That Christine Ponsot '47 CSD sold for $14,220 according to Mike Steinberger in his Vanity Fair piece. Cha-ching!

"But it appears that Burgundy’s complexity may have been Kurniawan’s undoing. During the lunch the day after the 2008 Acker auction, Ponsot and Kapon briefly left the table, and Kurniawan asked Barzelay a question: did he recall an Acker auction in 2005 at which Kurniawan had bought a single bottle of 1947 Ponsot Clos Saint-Denis? Barzelay did remember: Kurniawan had outbid Barzelay’s friend Don Stott for the wine, paying $14,220. Bar­zelay says that it suddenly occurred to him that Kurniawan thought the bottle was a Domaine Ponsot Clos Saint-Denis. In fact, it was a Christine Ponsot Clos Saint-Denis. The Christine Ponsot label was a line of wines put out by a négociant, Émile Chandesais, and named after his wife, who was not related to Laurent Ponsot’s family. This confusion may have led Kurniawan to believe that Domaine Ponsot had been making Clos Saint-Denis as far back as the 1940s and that it was safe to produce those counterfeit Ponsots. If that is what happened, it is a mistake that now has Kurniawan facing up to 80 years in a federal penitentiary. (At his arraignment, on May 23, Kurniawan pleaded not guilty.)"
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Post #3560  Postby Don Cornwell » June 26th 2012, 6:35pm

Stuart:

I think you're overlooking something, which was discussed many pages back in the thread (presumably before you started following it.) I "called b.s." on Rudy, as you put it, on the pages of the E-Robert Parker thread back in September of 2007 (regarding Rudy's sales of multiple cases worth of magnums of 47 Lafleur when only 5 magnums were made by the Domaine) and again in May 2008 (after the Ponsot sale).

I think you're overlooking two things. First, while a few other people sided with me at the time, my views of Rudy were challenged, to put it mildly, by John Kapon, Rob Rosania, Gil Lempert-Schwartz and a lot of other people who defended Rudy, his generosity, his tasting abilities, etc. The problem was that not many people wanted to believe the suggestion at that time that Rudy might be involved in selling counterfeit wines. While a lot more people took the Ponsot situation as an indication that something was wrong, again a lot of people tended to believe that Rudy was just an innocent victim until proven otherwise, despite a lot of circumstantial evidence to the contrary.

To be honest, we would still be having that debate today if it hadn't been for the FBI finding all of the evidence of a massive counterfeiting operation at Rudy's house at the time of his arrest. Its very easy to sit back and arm chair quarterback this situation four to five years after the first evidence arose and say why didn't someone blow the whistle earlier? In truth, I did, but very few people were receptive to the message at that time.

You're also overlooking something -- the potential liablity issue. You as a lawyer know all too well the problems of potential defamation liablity. Its something that affects all of us, even those of us schooled in the law. I'll admit to feeling significantly restrained in what I thought I could say about Rudy back in September of 2007 and May of 2008 by defamation concerns -- and I'm a lawyer like you. I know that some of my colleagues who have been working on this for a long time also felt constrained as to what they could say. I still feel constrained by what I can say here today -- particularly as to third parties that I believe were involved with Rudy as co-conspirators and/or aiders and abetters.
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Post #3561  Postby Lewis Dawson » June 26th 2012, 10:10pm

Don, thank you for that perspective, and the reminder of what the climate was like in 2007 and 2008. I don't know anything about this except what I read here and elsewhere in the public record. According to the criminal complaint, Rudy sold wine to "California Collector" that later was deemed to be counterfeit. In order to pay back the demanded refund, Rudy and "California Collector" and "New York Auction House" agreed to sell that same wine via a consignment to "International Auction House." I'm not a lawyer, but IMO that three-party agreement to consign amounts to an agreement to commit fraud. So I think "California Collector" and "New York Auction House" have reason to be nervous.

Also, there is direct evidence in this thread, offered by Don Cornwell, that Spectrum knew the wines consigned by Rudy through a nominee were in fact sourced from Rudy and owned by him. If that knowledge can be proven, then Spectrum would also be in danger of prosecution, IMO.

And while the Feds are investigating Rudy and his alledged co-conspirators, there are other serious charges raised in several of Bill Koch's lawsuits that could possibly result in criminal charges. For example, Koch charges that Eric Greenberg knowingly consigned fake wines for sale. And Koch offers a pretty compelling argument that Royal Wine Merchant knowingly imported Hardy Rodenstock fakes and sold them. It would not be surprising to me if the Feds consider charges against Greenberg and/or Royal, if the evidence supports Koch's charges.
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Post #3562  Postby Don Cornwell » June 26th 2012, 11:30pm

Regarding Rudy’s confusion about the Emile Chandesais/Christine Ponsot bottling, it is really John Kapon’s fault for misleading his friend Rudy. The wine was offered by Acker Merrall in its September 9, 2005 catalog. However, the wine was merely listed as "Ponsot." Here's the listing from the Acker catalog:

837 Clos St. Denis - Vintage 1947
Ponsot
lbsl, outstanding color and condition
1 bottle per lot $1500-2000

Rudy obviously thought Ponsot meant “Domaine Ponsot,” and it makes you wonder if John Kapon ever really looked at the bottle in question. Both Rudy and Don Stott got into a bidding war on this bottle in the obvious belief that it was from Domaine Ponsot.

Before anyone asks, no I don't know where the bottle of 47 Clos St. Denis came from other than that it was included in a consignment which was allegedly the "third installment" of wines consigned directly from someone in Europe.

However, this is not the first time that same 47 Clos St. Denis from Emile Chandesais has played a role in the wine counterfeiting story…

As you’re all aware, William Koch has sued Eric Greenberg for selling Koch allegedly counterfeit bottles which Koch purchased through Zachy’s auction. What a lot of you may not realize is that Mr. Koch has filed an amended complaint in that action. The amended complaint alleges that Koch purchased 36 bottles of counterfeit wine from Greenberg at the Deccember 3, 2004 and October 28, 2005 Zachys auctions. Mr. Koch now alleges that many of the 36 allegedly counterfeit bottles had been purchased by Eric Greenberg from Royal Merchants and that many of the bottles were known to Greenberg and his experts to be couterfeit at the time the wines ended up being sold via Zachys auction.

As a result of recent discovery rulings in the Koch v. Greenberg case, many of the documents which were previously maintained as confidential and which were filed under seal have now been made public for the first time. There is a considerable wealth of documentation and deposition testimony available (on the PACER system) as a result of the “declassification” order by the federal discovery magistrate. I’ve been looking at (and downloading) a lot of that material for the past two weeks. Much of it is extremely interesting from my perspective. I will try to put together some extracts from that documentation and testimony for the thread (perhaps in installments).

Among the declassified documents are those relating to the insurance claim filed by Eric Greenberg in May 2002 alleging that he had purchased hundreds of thousands of dollars worth of "fake" and "suspect" wines from Royal Wine Merchants. On June 26, 2002, Mr. Greenberg’s attorney submitted to Fireman's Fund and Royal Wine Merchants a 12-page schedule of wines that Mr. Greenberg had purchased from Royal Wine Merchants between January 2000 and March of 2002. That schedule listed more than 600 bottles which Mr. Greenberg claimed were either “fake” or “suspect.” Among the bottles listed as “fake” was a double magnum of 1947 Emile Chandesis [aka Christine Ponsot] Clos St. Denis. According to the schedule, this bottle was purchased on April 10, 2001 for $4,240. This is one of 199 bottles which was eventually returned to Royal Merchants by Eric Greenberg pursuant to a written settlement agreement entered into on February 3, 2004.

More to come. . . .
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Post #3563  Postby DerekS » June 27th 2012, 1:20am

I noticed this bottle 0f '85 Jayer Richebourg on winebid and thought it curious:
http://www.winebid.com/Item/4001861/198 ... Richebourg

So I compared it to other images of '85 I found with a quick search, for example:
http://www.spectrumwine.com/Auctions/Au ... tID=308286

Couple obvious differences between the two. One on winebid has tread on the bottom, other does not. Very clean label compared to the soiled neck labels. The word "FRANCE" is missing from the Spectrum picture after (Cote-D'Or)
Anyone have an opinion about the one currently for sale on winebid?
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Post #3564  Postby Tom Blach » June 27th 2012, 1:55am

Certainly if Don implies there were co-conspirators/accomplices that's good enough for me.
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Post #3565  Postby Don Cornwell » June 27th 2012, 2:59am

The following information is extracted directly from the documents and testimony on file in the Koch v. Greenberg litigation. These documents and testimony were filed as exhibits in connection with Eric Greenberg’s Motion for Summary Judgment in that litigation. In two instances, which are specifically noted, I have added information from obtained from from online records of government agencies. I have also taken some of the spreadsheet data produced in the litigation and have done my own analysis of the numbers from the data listed on the spreadsheet (as indicated below).

The bottom line is that, except as expressly noted, 100% of following information is taken directly from the documents and testimony submitted to the court in the Koch v. Greenberg litigation. I have deliberately refrained, except where expressly noted, from adding any facts or opinions that derive from me.

PART I – ERIC GREENBERG DISCOVERS THAT HE BOUGHT COUNTERFEIT WINES FROM ROYAL WINE MERCHANTS

According to his deposition testimony, Eric Greenberg (“Greenberg”) began drinking and buying a few wines (mostly Cali Cabs) in or about 1996. He began buying serious amounts of wine in 1998. By April 2002 (i.e., in less than four years) he had amassed 60,000+ bottles of wine, which (according to the introduction to the Imperial Cellar catalog in 2010) was then believed to be the largest private cellar in the United States. In 2001-2002, for health-related reasons, Greenberg decided to substantially reduce the size of his cellar by eventually selling off between half and two thirds of his cellar.

According to the California Secretary of State, on August 3, 2001, Greenberg formed Innovation Wines, LLC, a Delaware limited liability company doing business in California. According to the California ABC on-line records, wholesale and retail beer and wine licenses were issued to Innovation Wines on April 4, 2002 with a Pier 21 address in San Francisco. Both licenses were subsequently “automatically revoked” by the California ABC for unspecified reasons, but the date of such action is not apparent. In his deposition testimony, Eric Greenberg explained that all of the wines he sold at auction in the relevant 2004-2005 time period were sold by Innovation Wines.

As part of his plan to reduce the size of his cellar, Greenberg invited Sotheby’s to inspect his cellar in anticipation of offering a significant number of his wines at auction. Serena Sutcliffe, Jamie Ritchie and Robert Sleigh of Sotheby’s came to Greenberg’s home in Ross (Marin County CA, north of San Francisco) on April 29, 2002. They spent about 90 minutes looking at the wines in Greenberg’s very large underground “cave” (described as 30 yards by 35 yards, with an additional area that “tees off” in the rear). Afterwards they had lunch with Mr. Greenberg. Greenberg’s “house manager,” Jaime Cortes, was also present during the inspection.

The inspection began in an area of Greenberg’s cellar that contained some of some his oldest and presumably most valuable magnums. Sutcliffe and Ritchie told Greenberg that his cellar contained a number of counterfeit wines, including wines with obvious photocopied labels, and that there were other wines whose authenticity was in doubt which would require extensive authentication work to determine if they could be sold. There is some disagreement in the testimony as to whether or not Ms. Sutcliffe expressed doubt about Sotheby’s overall ability or willingness to auction wines from Greenberg’s cellar. However, Jaime Cortes, Mr. Greenberg’s “house manager,” testified as follows:

"Q. I'm still in your declaration. The sentence continues: "Sotheby's would not auction such questionable wine." Did Ms. Sutcliffe say, "Mr. Greenberg, I will not auction this wine," or did she say, "Sotheby's doesn't auction counterfeit wine"?
A. She said that Sotheby's -- she wouldn't feel comfortable auctioning the bottles that she looked at.
Q. Unless further inspection was conducted?
A. That, I don't know. She just said she didn't feel comfortable auctioning off those bottles.
Q. Did she say that she would feel comfortable auctioning other of Eric's bottles?
A. She didn't say that. I know that Eric kept on saying that he wasn't going to let her cherry-pick his collection.
"
[Cortes Depo, p. 155, lines 3-18]

Sotheby’s Jamie Ritchie further testified about the discussions on counterfeit wines with Mr. Greenberg as follows:

"Q. You testified earlier that when you visited Mr. Greenberg's cellar on April 29, 2002 you had conversations with him in which you advised him that there was counterfeit wine in his cellar and wine as to which additional investigation would need to be done, correct?
A. Yes.
Q. What was Mr. Greenberg's reaction?
A. I seem to recollect that he was upset by that information.
Q. Do you recall anything specifically that he said?
A. He said if he had counterfeit wine, he could always sell it through Acker Merrall because John Kapon would take anything.
"
[Jamie Ritchie Depo, p. 236, lines 7-22]

All of the participants agree that Ms. Sutcliffe asked Greenberg which sources he purchased his wines from. According to Mr. Greenberg’s testimony:

“I told her one of them was Royal [Wine Merchants], and I told her some of my other sources. And she said don't tell anybody I told you this, but the guys at Royal are crooks. Anything they sell you, you might have problems with. And so based on that, I started a cursory look at wines; within a week, I retained an attorney.”
[Greenberg Deposition, p. 26, lines 2-8]

According to documents produced by Fireman’s Fund Insurance in the Koch v. Greenberg litigation, which are now part of the public record, between January of 2000 and March of 2002 Greenberg purchased $2,189,640 of wine from Royal Wine Merchants.

Greenberg admitted that Serena Sutcliffe “scared the hell out of me” with respect to the wines he purchased from Royal Wine Merchants. Together with his cellar manager, Thierry Lovato, and a local sommelier, Andrew Dombrowski, Greenberg swiftly began an extensive analysis of every bottle that he believed had been sold to him by Royal Wine Merchants based on his accounting records. They cut capsules on many bottles and undertook detailed analysis of the labels, corks, bottles and capsules.

Greenberg initially produced a document entitled “Royal Wine Fake Summary Notes,” which itemized his authenticity concerns on 86 different wines purchased from Royal Wine Merchants. The report indicates that Greenberg, Lovato, and Dombrowski contacted outside experts, domains, and importers to consult on issues such as labeling.

In May of 2002 Greenberg filed an insurance claim with Fireman’s Fund Insurance reporting that he had purchased $2.19 million worth of wine from Royal, who had “swindle[d]” him. In phone conversations with Fireman’s Fund, Greenberg said he had suffered a minimum loss of $600,000, a probable loss upwards of $1.6 million, and a potential loss as high as $2.19 million. Greenberg likened his loss “to buying a fake Picasso painting.” (Greenberg concurrently filed an identical insurance claim with AIG insurance, but the status of that insurance claim is not discussed in the materials included in the court records.)

While pursuing the insurance claims, Greenberg’s attorney submitted a written claim to Royal Wine Merchants accusing Royal of selling his client a massive amount of counterfeit wines and insisting on a full refund of the money Greenberg paid. According to Jeff Sokolin, the owner of Royal Wine Merchants, in early May of 2002, Greenberg threatened Sokolin’s life and threatened to put him in jail.

On June 26, 2002, Greenberg’s attorney forwarded a letter to Fireman’s Fund, which had previously been sent to the attorneys representing Royal Wine Merchants, which stated that Mr. Greenberg “has now determined that approximately $912,301 of wine he received [from Royal] is fake, and his review is continuing. There are a number of other wines that Mr. Greenberg believes will turn out to be fake upon further investigation.”

The letter to Fireman’s Fund attached a 12-page spreadsheet itemizing all of the wines purchased from Royal, and identifying (by my count) a total of 592 bottles from the list of wines purchased from Royal as either “fake” (totaling $912,301 according to Mr. Greenberg) or “suspect” (totaling an additional $363,430 by my count), for a total of $1,267,481 (or 58%) of the $2,189,640 of wines originally purchased by Greenberg from Royal. The letter to Royal’s counsel also stated that Greenberg had determined that the wines from Hardy Rodenstock which Royal had sold to him were also fakes.

The insurance claim filed with Fireman’s Fund was denied on the grounds that the policy had been cancelled several months before the alleged date of loss and that the policy did not cover losses resulting from counterfeit bottles purchased. (The status of the AIG insurance claim is unknown to me at this time.)

On or about May 22, 2003 Greenberg’s attorney sent to Royal Wine Merchants’ attorneys a draft federal complaint alleging claims for fraud and breach of contract. The draft complaint alleged that “a substantial portion, if not all, of the bottles of wine purchased from Royal Wine Merchants were fake or counterfeit.”

Greenberg and Royal eventually settled Greenberg’s counterfeit wine claim without litigation being filed. The Settlement Agreement was dated February 3, 2004. The exact terms of the settlement remain confidential at this time. However, based upon the information set forth below, it would appear that Greenberg received a substantial payment from Royal Wine Merchants but he did not have to return all of the allegedly counterfeit wine.

According to a letter and schedule from Greenberg’s attorney Anthony Coles dated February 11, 2004, Greenberg returned 199 bottles to Royal having a total value of $362,937. After comparing this schedule with the initial 12-page schedule of wines listed as “fake” or “suspect,” it is apparent that Mr. Greenberg returned 36 bottles which had never before been designated as either “fake” or “suspect,” having a value of $50,825. With these additional bottles added, there were a total of 628 bottles that had been classified as either “fake” or “suspect” by Greenberg and these wines totaled (by my count) $1,318,306 in value -- meaning that the amount of wine returned to Royal represented 27.5% of the amount (by value) which had been expressly claimed to be “fake” or “suspect” by Mr. Greenberg. Stated alternatively, excluding the 199 bottles returned pursuant to the settlement, Mr. Greenberg retained 429 bottles that he had previously identified as "fake" or "suspect" to Royal and/or Fireman's Fund, having an original invoice value of $955,369.

Greenberg’s “house manager” Jaime Cortes testified about being told about the settlement between Greenberg and Royal as follows:

"Q. Did there come a point in time when Mr. Greenberg advised you that he had resolved his disputes with Royal?
A. Yes.
Q. When?
A. I don't recall the exact date, but I was working, doing wine inventory at the time.
Q. Who was present during the conversation?
A. Myself and Mr. Greenberg.
Q. What did Mr. Greenberg say to you, and what did you say to him?
[Intervening Objection omitted]
A. He said: Good, you know, I settled with Royal. And I said: Cool. I take it that you won. And he says: Well, better than that. He goes: I don't have to give the wine back. And I said: Well, do you mind if I take a couple of bottles as a trophy for all the hard work that we've done? And he said: No. He said: What they did to me, I'm going to do to someone else.
Q. (By Mr. Spiro) What did you understand Mr. Greenberg to mean when he said, "What they did to me, I'm going to do to someone else"?
A. I mean, I understood that he was probably going to get rid of the wine.
Q. What do you mean "get rid of the wine"?
A. Sell it, most likely.
"
[Cortes Depo. p. 73, line 18 to p. 75, line 3]

Update: Minor correction on number of "fake" and "suspect" bottles above listed in red, with corresponding changes in values.
(Next….. Part II - THE RELATIONSHIP BETWEEN ERIC GREENBERG AND RUDY KURNIAWAN)
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3566  Postby Tom Blach » June 27th 2012, 4:10am

Now that's not nice, if he'd had a refund!
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3567  Postby Paul Jaouen » June 27th 2012, 4:36am

"He said if he had counterfeit wine, he could always sell it through Acker Merrall because John Kapon would take anything." Says a lot!

Don, All extremely interesting...Thanks!
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3568  Postby RichardFlack » June 27th 2012, 4:40am

There's been some chit-chat here about the movie of all this. I guess now we're really looking at a whole series with sequels and prequels!

More seriously, was Mr Greenberg unlucky in his choice of wines from Royal, or would the % of alleged fakes (looks like over 50%) be typical for their other buyers?
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Post #3569  Postby Ken V » June 27th 2012, 4:45am

Paul Jaouen wrote:"He said if he had counterfeit wine, he could always sell it through Acker Merrall because John Kapon would take anything." Says a lot!

Don, All extremely interesting...Thanks!

That sentence sure jumped out at me too!
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3570  Postby paul hanna » June 27th 2012, 4:54am

Paul Jaouen wrote:"He said if he had counterfeit wine, he could always sell it through Acker Merrall because John Kapon would take anything." Says a lot!

Don, All extremely interesting...Thanks!


Wow.

Jusr wow....
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Post #3571  Postby cjsavino » June 27th 2012, 5:00am

RichardFlack wrote:There's been some chit-chat here about the movie of all this. I guess now we're really looking at a whole series with sequels and prequels!

More seriously, was Mr Greenberg unlucky in his choice of wines from Royal, or would the % of alleged fakes (looks like over 50%) be typical for their other buyers?

And the name of the movie/book: Wine Berserk.

With limited proceeds funding this board.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3572  Postby Stuart BeauneHead Niemtzow » June 27th 2012, 5:21am

Don Cornwell wrote:Stuart:

I think you're overlooking something, which was discussed many pages back in the thread (presumably before you started following it.) I "called b.s." on Rudy, as you put it, on the pages of the E-Robert Parker thread back in September of 2007 (regarding Rudy's sales of multiple cases worth of magnums of 47 Lafleur when only 5 magnums were made by the Domaine) and again in May 2008 (after the Ponsot sale).

.


"Calling b.s." is a term someone used on this thread earlier. I think it is apt. I think I've heard my sons use it, too. If you did that in 2007 (which I certainly believe), though it wasn't with Burgundy, you should be added to the the list (with someone, though I'm not sure who) as a select group who were then calling "b.s.". , and I stand corrected. After April 2008, I don't think calling b.s. was too risky/gutsy. Once Ponsot pounced from Philadelphia, the world was ready to call b.s., I think. So, for me, the critical timeline is 2002-April 2008. So, bravo.

I just don't like to hear from revisionists or rose-colored lens wearers that they "knew" in that 2002-early 2008 period and called b.s.-- if there is no evidence that they did specifically as to Rudy. Decrying the prevalence of fraud in the auction market then..is..I think...something much less specific and gutsy.

I'd like to maintain a Rudy list of honor: those who actually tried to do something/act on their suspicions prior to April 2008, when Ponsot got involved. I have you on the new list, Don. You might have to wait for company on it, though.

And, I do appreciate the risks of calling b.s. legally and otherwise. That's why I am "policing" the revisionists' claims here. [training.gif] [snort.gif]
Last edited by Stuart BeauneHead Niemtzow on June 27th 2012, 5:59am, edited 1 time in total.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3573  Postby RichardFlack » June 27th 2012, 5:43am

cjsavino wrote:
RichardFlack wrote:There's been some chit-chat here about the movie of all this. I guess now we're really looking at a whole series with sequels and prequels!

More seriously, was Mr Greenberg unlucky in his choice of wines from Royal, or would the % of alleged fakes (looks like over 50%) be typical for their other buyers?

And the name of the movie/book: Wine Berserk.

With limited proceeds funding this board.


or - "You cant judge a wine by its label" ?
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3574  Postby Dennis Atick » June 27th 2012, 5:51am

paul hanna wrote:
Paul Jaouen wrote:"He said if he had counterfeit wine, he could always sell it through Acker Merrall because John Kapon would take anything." Says a lot!

Don, All extremely interesting...Thanks!


Wow.

Jusr wow....

+1
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3575  Postby dcornutt » June 27th 2012, 6:06am

Local guy here in 2010, who in 2010 had cellar(s) that amounted to almost 100,000 bottles. I guess he didn't count? John knows him too! Purple prose for marketing.
This is fascinating Don. Keep it coming.
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Post #3576  Postby Dan Collins » June 27th 2012, 6:53am

Nice job, Don. This is not wine-related, but here's the link an interesting story that discusses how a rare book stolen in Sweden wound up in New York City. The piece raises questions about the role of a German auction house that -- according to the book thief -- had no interest in the provenance of the book and paid in cash! http://www.nytimes.com/2012/06/27/books ... .html?_r=1 (The story has a reasonably happy ending.)
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Post #3577  Postby Brian King » June 27th 2012, 8:09am

So remind me on the Greenberg case - it's a Civil case, not criminal, correct?

If the government chose to pursue it, wouldn't there also be potential criminal liability there to if he knowingly sold on the fakes? That passage Don posted is truly amazing.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3578  Postby Derek Mo » June 27th 2012, 8:24am

"He said: What they did to me, I'm going to do to someone else."
Wow. What a low life sh*t head this guy is...
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Post #3579  Postby JLLeDu » June 27th 2012, 8:49am

Don Cornwell wrote:The following information is extracted directly from the documents and testimony on file in the Koch v. Greenberg litigation. These documents and testimony were filed as exhibits in connection with Eric Greenberg’s Motion for Summary Judgment in that litigation. In two instances, which are specifically noted, I have added information from obtained from from online records of government agencies. I have also taken some of the spreadsheet data produced in the litigation and have done my own analysis of the numbers from the data listed on the spreadsheet (as indicated below).

The bottom line is that, except as expressly noted, 100% of following information is taken directly from the documents and testimony submitted to the court in the Koch v. Greenberg litigation. I have deliberately refrained, except where expressly noted, from adding any facts or opinions that derive from me.

PART I – ERIC GREENBERG DISCOVERS THAT HE BOUGHT COUNTERFEIT WINES FROM ROYAL WINE MERCHANTS

According to his deposition testimony, Eric Greenberg (“Greenberg”) began drinking and buying a few wines (mostly Cali Cabs) in or about 1996. He began buying serious amounts of wine in 1998. By April 2002 (i.e., in less than four years) he had amassed 60,000+ bottles of wine, which (according to the introduction to the Imperial Cellar catalog in 2010) was then believed to be the largest private cellar in the United States. In 2001-2002, for health-related reasons, Greenberg decided to substantially reduce the size of his cellar by eventually selling off between half and two thirds of his cellar.

According to the California Secretary of State, on August 3, 2001, Greenberg formed Innovation Wines, LLC, a Delaware limited liability company doing business in California. According to the California ABC on-line records, wholesale and retail beer and wine licenses were issued to Innovation Wines on April 4, 2002 with a Pier 21 address in San Francisco. Both licenses were subsequently “automatically revoked” by the California ABC for unspecified reasons, but the date of such action is not apparent. In his deposition testimony, Eric Greenberg explained that all of the wines he sold at auction in the relevant 2004-2005 time period were sold by Innovation Wines.

As part of his plan to reduce the size of his cellar, Greenberg invited Sotheby’s to inspect his cellar in anticipation of offering a significant number of his wines at auction. Serena Sutcliffe, Jamie Ritchie and Robert Sleigh of Sotheby’s came to Greenberg’s home in Ross (Marin County CA, north of San Francisco) on April 29, 2002. They spent about 90 minutes looking at the wines in Greenberg’s very large underground “cave” (described as 30 yards by 35 yards, with an additional area that “tees off” in the rear). Afterwards they had lunch with Mr. Greenberg. Greenberg’s “house manager,” Jaime Cortes, was also present during the inspection.

The inspection began in an area of Greenberg’s cellar that contained some of some his oldest and presumably most valuable magnums. Sutcliffe and Ritchie told Greenberg that his cellar contained a number of counterfeit wines, including wines with obvious photocopied labels, and that there were other wines whose authenticity was in doubt which would require extensive authentication work to determine if they could be sold. There is some disagreement in the testimony as to whether or not Ms. Sutcliffe expressed doubt about Sotheby’s overall ability or willingness to auction wines from Greenberg’s cellar. However, Jaime Cortes, Mr. Greenberg’s “house manager,” testified as follows:

"Q. I'm still in your declaration. The sentence continues: "Sotheby's would not auction such questionable wine." Did Ms. Sutcliffe say, "Mr. Greenberg, I will not auction this wine," or did she say, "Sotheby's doesn't auction counterfeit wine"?
A. She said that Sotheby's -- she wouldn't feel comfortable auctioning the bottles that she looked at.
Q. Unless further inspection was conducted?
A. That, I don't know. She just said she didn't feel comfortable auctioning off those bottles.
Q. Did she say that she would feel comfortable auctioning other of Eric's bottles?
A. She didn't say that. I know that Eric kept on saying that he wasn't going to let her cherry-pick his collection.
"
[Cortes Depo, p. 155, lines 3-18]

Sotheby’s Jamie Ritchie further testified about the discussions on counterfeit wines with Mr. Greenberg as follows:

"Q. You testified earlier that when you visited Mr. Greenberg's cellar on April 29, 2002 you had conversations with him in which you advised him that there was counterfeit wine in his cellar and wine as to which additional investigation would need to be done, correct?
A. Yes.
Q. What was Mr. Greenberg's reaction?
A. I seem to recollect that he was upset by that information.
Q. Do you recall anything specifically that he said?
A. He said if he had counterfeit wine, he could always sell it through Acker Merrall because John Kapon would take anything.
"
[Jamie Ritchie Depo, p. 236, lines 7-22]

All of the participants agree that Ms. Sutcliffe asked Greenberg which sources he purchased his wines from. According to Mr. Greenberg’s testimony:

“I told her one of them was Royal [Wine Merchants], and I told her some of my other sources. And she said don't tell anybody I told you this, but the guys at Royal are crooks. Anything they sell you, you might have problems with. And so based on that, I started a cursory look at wines; within a week, I retained an attorney.”
[Greenberg Deposition, p. 26, lines 2-8]

According to documents produced by Fireman’s Fund Insurance in the Koch v. Greenberg litigation, which are now part of the public record, between January of 2000 and March of 2002 Greenberg purchased $2,189,640 of wine from Royal Wine Merchants.

Greenberg admitted that Serena Sutcliffe “scared the hell out of me” with respect to the wines he purchased from Royal Wine Merchants. Together with his cellar manager, Thierry Lovato, and a local sommelier, Andrew Dumbrowsky, Greenberg swiftly began an extensive analysis of every bottle that he believed had been sold to him by Royal Wine Merchants based on his accounting records. They cut capsules on many bottles and undertook detailed analysis of the labels, corks, bottles and capsules.

Greenberg initially produced a document entitled “Royal Wine Fake Summary Notes,” which itemized his authenticity concerns on 86 different wines purchased from Royal Wine Merchants. The report indicates that Greenberg, Lovato, and Dumbrowsky contacted outside experts, domains, and importers to consult on issues such as labeling.

In May of 2002 Greenberg filed an insurance claim with Fireman’s Fund Insurance reporting that he had purchased $2.19 million worth of wine from Royal, who had “swindle[d]” him. In phone conversations with Fireman’s Fund, Greenberg said he had suffered a minimum loss of $600,000, a probable loss upwards of $1.6 million, and a potential loss as high as $2.19 million. Greenberg likened his loss “to buying a fake Picasso painting.” (Greenberg concurrently filed an identical insurance claim with AIG insurance, but the status of that insurance claim is not discussed in the materials included in the court records.)

While pursuing the insurance claims, Greenberg’s attorney submitted a written claim to Royal Wine Merchants accusing Royal of selling his client a massive amount of counterfeit wines and insisting on a full refund of the money Greenberg paid. According to Jeff Sokolin, the owner of Royal Wine Merchants, in early May of 2002, Greenberg threatened Sokolin’s life and threatened to put him in jail.

On June 26, 2002, Greenberg’s attorney forwarded a letter to Fireman’s Fund, which had previously been sent to the attorneys representing Royal Wine Merchants, which stated that Mr. Greenberg “has now determined that approximately $912,301 of wine he received [from Royal] is fake, and his review is continuing. There are a number of other wines that Mr. Greenberg believes will turn out to be fake upon further investigation.”

The letter to Fireman’s Fund attached a 12-page spreadsheet itemizing all of the wines purchased from Royal, and identifying (by my count) a total of 610 bottles from the list of wines purchased from Royal as either “fake” (totaling $912,301 according to Mr. Greenberg) or “suspect” (totaling an additional $363,430 by my count), for a total of $1,275,731 (or 58%) of the $2,189,640 of wines originally purchased by Greenberg from Royal. The letter to Royal’s counsel also stated that Greenberg had determined that the wines from Hardy Rodenstock which Royal had sold to him were also fakes.

The insurance claim filed with Fireman’s Fund was denied on the grounds that the policy had been cancelled several months before the alleged date of loss and that the policy did not cover losses resulting from counterfeit bottles purchased. (The status of the AIG insurance claim is unknown to me at this time.)

On or about May 22, 2003 Greenberg’s attorney sent to Royal Wine Merchants’ attorneys a draft federal complaint alleging claims for fraud and breach of contract. The draft complaint alleged that “a substantial portion, if not all, of the bottles of wine purchased from Royal Wine Merchants were fake or counterfeit.”

Greenberg and Royal eventually settled Greenberg’s counterfeit wine claim without litigation being filed. The Settlement Agreement was dated February 3, 2004. The exact terms of the settlement remain confidential at this time. However, based upon the information set forth below, it would appear that Greenberg received a substantial payment from Royal Wine Merchants but he did not have to return all of the allegedly counterfeit wine.

According to a letter and schedule from Greenberg’s attorney Anthony Coles dated February 11, 2004, Greenberg returned 199 bottles to Royal having a total value of $362,937. After comparing this schedule with the initial 12-page schedule of wines listed as “fake” or “suspect,” it is apparent that Mr. Greenberg returned 36 bottles which had never before been designated as either “fake” or “suspect,” having a value of $50,825. With these additional bottles added, there were a total of 646 bottles that had been classified as either “fake” or “suspect” by Greenberg and these wines totaled (by my count) $1,326,566 in value -- meaning that the amount of wine returned to Royal represented 27.4% of the amount (by value) which had been expressly claimed to be “fake” or “suspect” by Mr. Greenberg. Stated alternatively, excluding the 199 bottles returned pursuant to the settlement, Mr. Greenberg retained 447 bottles that he had previously identified as "fake" or "suspect" to Royal and/or Fireman's Fund, having an original invoice value of $963,629.

Greenberg’s “house manager” Jaime Cortes testified about being told about the settlement between Greenberg and Royal as follows:

"Q. Did there come a point in time when Mr. Greenberg advised you that he had resolved his disputes with Royal?
A. Yes.
Q. When?
A. I don't recall the exact date, but I was working, doing wine inventory at the time.
Q. Who was present during the conversation?
A. Myself and Mr. Greenberg.
Q. What did Mr. Greenberg say to you, and what did you say to him?
[Intervening Objection omitted]
A. He said: Good, you know, I settled with Royal. And I said: Cool. I take it that you won. And he says: Well, better than that. He goes: I don't have to give the wine back. And I said: Well, do you mind if I take a couple of bottles as a trophy for all the hard work that we've done? And he said: No. He said: What they did to me, I'm going to do to someone else.
Q. (By Mr. Spiro) What did you understand Mr. Greenberg to mean when he said, "What they did to me, I'm going to do to someone else"?
A. I mean, I understood that he was probably going to get rid of the wine.
Q. What do you mean "get rid of the wine"?
A. Sell it, most likely.
"
[Cortes Depo. p. 73, line 18 to p. 75, line 3]

(Next….. Part II - THE RELATIONSHIP BETWEEN ERIC GREENBERG AND RUDY KURNIAWAN)

This is unbelievable, although I'm not surprised considering the parties involved...
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3580  Postby Dan Collins » June 27th 2012, 8:54am

Afterthought: I urge all connoisseurs of bad writing to check out John Kapon’s posts on Blog Au Vin. (“I knew it was a heavy crowd when I introduced myself to someone and he replied, ‘Gordon Getty, nice to meet you.’ Rudy and I flew up together from LA that morning for lunch; I believe it was a Sunday, after a couple of heavy nights of winebauchery. We were still ready, willing and able, of course.”)

Of course.

I nominate the English language as one of the victims in this sorry chapter of wine history.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3581  Postby WvanGorp » June 27th 2012, 9:34am

Ken V wrote:
Paul Jaouen wrote:"He said if he had counterfeit wine, he could always sell it through Acker Merrall because John Kapon would take anything." Says a lot!

Don, All extremely interesting...Thanks!

That sentence sure jumped out at me too!


Me three.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3582  Postby Bruce Leiser_owitz » June 27th 2012, 9:45am

Don--Thanks for the update and the information. It certainly puts into stark relief one of the subsidiary issues with claims of wine fraud. If you're a buyer of fraudulent/counterfeit wine (or wine that at least has a high risk of being so), then what do you do especially if the seller can't/won't undo the sale? It doesn't take too much imagination to assume that SOME disappointed buyers might try to find some other avenue to "recoup their losses."

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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3583  Postby AKuehn » June 27th 2012, 10:04am

Derek Mo wrote:"He said: What they did to me, I'm going to do to someone else."
Wow. What a low life sh*t head this guy is...

And yet, I wonder how uncommon it is for people to think that way. I'd venture to guess that there is a not-insignificant subset of the population that would do exactly this rather than eat the cost.
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Post #3584  Postby John Morris » June 27th 2012, 10:06am

Testimony taken by adverse counsel is a wonderful thing, and even better when distilled through a summary judgment motion. The quotes are delicious!

Two questions:

--Do I take it that Acker facilitated in some way the sale or Rudy's wine through Christie's? If so, how?

--There could be statute of limitations issues here, it seems. Don, Bruce, other (still-active lawyers): Is there an argument that the SOL for mail fraud is tolled because any fraud was concealed? That's what I recall.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3585  Postby Lewis Dawson » June 27th 2012, 11:29am

John Morris wrote:--Do I take it that Acker facilitated in some way the sale or Rudy's wine through Christie's? If so, how?

Yes, Acker facilitated, IMO. Rudy agreed to refund the purchase price to "California Collector" and take the wine back, after "California Collector" determined it was fake wine. Rudy's plan was to sell the wine to raise the cash for the refund. However, Acker learned of the planned consignment and objected, because all of Rudy'e wine was pledged to Acker as security for their loans to Rudy. Ultimately, Rudy worked out a deal where Acker would allow the wine to be sold through Christie's, and the sale proceeds would be split between Acker and "California Collector."

There is no smoking gun proof in the above paragraph that Acker knew the wines were fake and this was the reason for the refund to "California Collector." So perhaps additional evidence would be needed to conclude that Acker knowingly conspired with Rudy/California Collector to sell fake wine??
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Post #3586  Postby Tom Blach » June 27th 2012, 3:12pm

AKuehn wrote:
Derek Mo wrote:"He said: What they did to me, I'm going to do to someone else."
Wow. What a low life sh*t head this guy is...

And yet, I wonder how uncommon it is for people to think that way. I'd venture to guess that there is a not-insignificant subset of the population that would do exactly this rather than eat the cost.


But he'd already had a refund. That was the bit that made me think that he actually deserved to be sold fake wine.
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Post #3587  Postby John Morris » June 27th 2012, 3:15pm

Lew -- After the millions in returned wine (the source of Rudy's debt to Acker) and the 08 Ponsot auction, one could certainly argue that they were on notice by the time the deal was worked out for the proceeds from the Christie's auction.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3588  Postby Lewis Dawson » June 27th 2012, 4:44pm

Yes, John, a good point.
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Post #3589  Postby Don Cornwell » June 27th 2012, 5:10pm

AKuehn wrote:
Derek Mo wrote:"He said: What they did to me, I'm going to do to someone else."
Wow. What a low life sh*t head this guy is...

And yet, I wonder how uncommon it is for people to think that way. I'd venture to guess that there is a not-insignificant subset of the population that would do exactly this rather than eat the cost.

Al

The difference is that Mr. Greenberg apparently got his money back too.
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Post #3590  Postby Craig G » June 27th 2012, 5:20pm

I loved the Kapon reference, but my favorite part was that he was reducing his cellar to 20-30,000 bottles for health reasons.
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Post #3591  Postby Keith Levenberg » June 27th 2012, 7:54pm

Some great stuff in the docket Don points to.
P~ or t,n. e
first time, Greenberg sold wine at auction, consigning wine for Zachys' February 2003 auction?l
This was also Greenberg's first attempt to sell counterfeit wine (or at least the first such attempt
that Plaintiff has discovered). When Zachys was preparing for the auction, Maureen Downey
was assigned to vet the wine that Greenberg wanted to sell. She rejected various bottles of his
wine.22 When she told Greenberg about the problem, he happened to be in New York. They met
at Daniel, an Upper East Side French restaurant, and he opened some of the wine she rejected.
Greenberg agreed that it was not what it purported to be and Zachys thereafter returned the
rej.e cted w'm e to Gr eenb erg. 23
Greenberg's next move was to sell wine through an auction held in April 2003 by
Acker Merrall & Condit; Greenberg already had expressed confidence that Acker's President,
John Kapon, would be willing to auction problematic wines. When the auction catalogue was
distributed, Downey saw that it appeared to contain the same vintages with the same authenticity
issues that she had just rejected at Zachys. She called Justin Christoph, her friend and former
colleague, who was then working at Acker.24 He disclosed that the wine was indeed from
Greenberg and they both concluded, after comparing notes, that it was indeed the very same
wine that Downey had rejected.25
Then, in late 2003, Greenberg purchased counterfeit wines from Rudy Kurniawan
through an intermediary, WineBid.com. Angered, Greenberg wrote to the CFO of
WineBid.com, "The wines [I purchased] were consigned by Rudy Kurwinian [sic] .... Now I
can proceed with a lawsuit without messing around. There I will get punitive damages against
one or both of you. My goal is to bury the consignor's reputation in the wine world; we have too
much faking going on. And I want your firm to notify everyone who has bought wine consigned
from him that it may be suspect.,,26
Within days, however, Greenberg's relationship with Kurniawan had improved
and he dropped the threat of a lawsuit.27 In fact, by late 2004, the two were apparently selling
each other's wines. In one email reflecting the dealings, they corresponded regarding a list of
wines that Greenberg was offering to sell to Kurniawan, wherein Greenberg responds in capital
letters to Kurniawan:
Ok. Go under the assumption that I will sell some of most things. The
list is so large. But I will sell all that old Bordeaux. I cannot price out the
whole list. If you let me know what, I can price them, or we can look at
the retail price on Winesearcher ... 4- Can u delete the wines u DON'T
want to sell and INCLUDE prices of those to sell. I can move some,
actually try to move those' suspects' Bordeaux for u.
I AM PUTTING IT ON AUCTION ... ps. I tried the Georges Churchy
1899 Petrus from zachys, same as your 189911900 mag, not good for sure.
cheers,
Rudy8
Thus, it appears that Greenberg offered to sell to Kurniawan some of Greenberg's large list of
to Zachys some of the wine that he just purchased from Kurniawan. Koch proceeded to buy
magnums of 1947 and 1961 Lafleur at Zachys' December 2004 auction, paying $23,326 and
$16,849 respectively. The wines are counterfeit and appear at paragraphs 75 and 76 of the
Amended Complaint.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3592  Postby Claude Kolm » June 27th 2012, 8:11pm

Interesting that Daniel seemed to be the favorite restaurant of all those involved (see, e.g., here--http://www.slate.com/articles/life/drink/2010/06/whats_in_the_bottle.html). My one time dining there (about the time that all these events were taking place), I found the food unexceptional, but the level of wine knowledge of sommeliers was pathetic -- e.g., I was brought a J. J. Prüm wine when I ordered a Dr. F. Weins-Prüm, and a Chandon-de-Briailles Corton-Bressandes when I ordered a Pernand-Ile des Vergelesses.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3593  Postby Keith Levenberg » June 27th 2012, 8:19pm

Claude Kolm wrote:Interesting that Daniel seemed to be the favorite restaurant of all those involved (see, e.g., here--http://www.slate.com/articles/life/drink/2010/06/whats_in_the_bottle.html). My one time dining there (about the time that all these events were taking place), I found the food unexceptional, but the level of wine knowledge of sommeliers was pathetic -- e.g., I was brought a J. J. Prüm wine when I ordered a Dr. F. Weins-Prüm, and a Chandon-de-Briailles Corton-Bressandes when I ordered a Pernand-Ile des Vergelesses.

For Rudy at least, I think it's clear Cru was his favorite haunt.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3594  Postby Eric LeVine » June 27th 2012, 8:25pm

Claude Kolm wrote:Interesting that Daniel seemed to be the favorite restaurant of all those involved (see, e.g., here--http://www.slate.com/articles/life/drink/2010/06/whats_in_the_bottle.html). My one time dining there (about the time that all these events were taking place), I found the food unexceptional, but the level of wine knowledge of sommeliers was pathetic -- e.g., I was brought a J. J. Prüm wine when I ordered a Dr. F. Weins-Prüm, and a Chandon-de-Briailles Corton-Bressandes when I ordered a Pernand-Ile des Vergelesses.

Hmm, I dined there a few times in 2003 and 2004 and had truly exceptional wine service from Jean-Luc Le Dû who has actually been posting here lately.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3595  Postby WvanGorp » June 27th 2012, 8:42pm

When I had the now infamous car ride with John Kapon and Rudy, the conversation turned to restaurant Daniel. Rudy commented several times that he would only go to Daniel if Daniel Boulud cooked for him personally.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3596  Postby Mel Hill » June 27th 2012, 8:49pm

I wonder if Daniel would send Rudy the empties?
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3597  Postby Keith Levenberg » June 27th 2012, 8:57pm

Mel Hill wrote:I wonder if Daniel would send Rudy the empties?

He would have had to sell those empties five or six times over to make back the markup on the Daniel list.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3598  Postby Don Cornwell » June 28th 2012, 12:39am

Part II - THE RELATIONSHIP BETWEEN ERIC GREENBERG AND RUDY KURNIAWAN

The following information is extracted directly from the documents and testimony on file in the Koch v. Greenberg litigation. The documents and testimony were filed as exhibits in connection with Eric Greenberg’s Motion for Summary Judgment in that litigation. The bottom line is that except where expressly noted, 100% of following information is taken directly from the documents and testimony submitted to the court in the Koch v. Greenberg litigation. I have deliberately refrained, except where expressly noted, from adding any facts or opinions that derive from me.
_____________________________________________

According to the emails produced in Koch v. Greenberg, in November of 2003, Eric Greenberg notified Winebid that several bottles of wine which he had recently purchased from Winebid were counterfeit and he threatened to sue both Winebid and the consignor. The wines in question were:

1999 DRC Romanee Conti in magnum
1990 DRC La Tache in magnum
1978 Dujac Echezaux
1985 Jayer Vosne Romanee Brulees
1990 Jayer Vosne Romanee Cros Parantoux

After a considerable initial delay, Greenberg sent an email to Steve Griffin, Winebid’s CFO, dated December 28, 2003, which provided a detailed list of the defects Greenberg had found with respect to each of the above-listed bottles. In that email Greenberg also stated the following:

“Steve:

I have been very busy. Apologies for not getting back to you. The wines were consigned by Rudy Kurwinian of Arcadia California. I know this for fact. He also consigned some suspect/bad mags to Acker Merrill that I bought. Bad news. Now can proceed with a lawsuit without messing around. There I will get punitive damages against one or both of you. My goal is to bury the consignor’s reputation in the wine world; we have too much faking going on. And I want your firm to notify everyone who has bought wine consigned from him that it may be suspect. * * * *

I will not wait to file; if you want a solution both you and your consignor will need to give me restitution and an immediate refund with the bottles destroyed. Further I want to know where he got the bottles as well. He knows me and I know him. Play poker, you will lose; these are so fake you have no idea . . . I am livid about fakes; I have seen too many, and ignorant kids cannot make bad buys and think they are going to pawn their mistakes off on unsuspecting others.

On December 30, 2003, Steve Griffin, on behalf of Winebid, informed Greenberg that in accordance with Greenberg’s previous request, Winebid had made arrangements for the wines to be inspected by Martine Saunier of Martine’s Wines and by Wilson-Daniels. Griffin requested that Greenberg advise him of dates when he would be available to attend the inspection as Greenberg had requested.

Greenberg responded by return email ninety minutes later stating in pertinent part as follows: “I just had lengthy conversation with Rudy Kurniawan. He and i have known each other, done tastings together, and I am convinced that he did not know what he was selling was not right. I will send back the bottles and take full refund. * * * *”

There are no other documents or testimony in the record that I have been able to find which explain the basis of this abrupt and unexplained turnaround in Mr. Greenberg’s attitude towards Rudy Kurniawan.

The next document in the record concerning the relationship between Rudy Kurniawan and Eric Greenberg is dated May 25, 2004. On that day, Greenberg sent an email to Kurniawan stating as follows:

“Rudy:

Hope you are well. You and I are the only people that cut our capsules the same way, so am positively sure that this [list of Greenberg’s purchases at Acker action held on May 22, 2004] was yours.

[Lot] 4 1 bottle 1921 Chateau Cheval Blanc St. Emilion $4,800
[Lot] 6 1 magnum 1945 Chateau Clos L'Eglise Cliinet $7,000
[Lot] 8 1 magnum 1949 Chateau Clos L'Eglise Clinei $7,000
[Lot] 13 1 bottle 1947 Chateau Lafleur Pomerol $ 4,000
[Lot] 33 1 double [magnum] 1961 Chateau Trotanoy Pomero! $ 10,000

You should call me when looking to move certain wines, and I should do the same for you ... We would both be better off. We need to do some drinking soon! Take care, Eric” (Ellipses in original; bracketed material and emphasis added).

Rudy Kurniawan responded by return email twenty minutes later, stating in pertinent part:

Eric my friend,

Good for u. [I]ts a from a huge cellar I bought along my friend. I am looking to move more in Oct to John [Kapon]. I will send u a list. ALL Nicolas btl and I have tasted randomly with John many different btls from Calon Segur to a custom made 3L L[atour] P[omerol] 61 and they are fantastic and real. U should keep those gems.

I just realize we were bidding against ea other on the 37 L[a] T[ache] lot ... we need to talk more man. lets drink soon! I might be up in SF area 6-8th. * * * are u bidding [in the] Doris duke sale? we need to talk more as i know 20 huge collector are bidding all the way and we are currently pooling bids. I will be there in person. I can bid for u if u want…. Lemme know…
cheers my friend,

RR” (Ellipses in original; emphasis added.)

From my own personal knowledge I am aware that Eric Greenberg and Rudy Kurniawan did agree to bid together on certain lots in the Doris Duke auction, which was held at Christie’s on June 4, 2004. They were successful on a few lots and ended up sharing some of the wines, but the details are not material here.

As promised in his prior email, in the fall of 2004, Rudy Kurniawan offered and sold to Eric Greenberg a significant quantity of very rare wines. The first installment of 25 different wines totaled $300,500 and it was delivered to Eric Greenberg’s home on October 7 2004, apparently by Rudy Kurniawan himself. The following wines were included in the sale, and, according to the invoice sent to Greenberg, all were claimed to be sourced from Nicolas in Paris:

5-1929 Vogue Musigny
1-1929 Vogue Musigny Magnum
4-1929 DRC Romanée Conti
2-1945 Chateau Lafleur
2-1947 Chateau Lafleur
1-1947 Chateau Lafleur Magnum
3-1950 Chateau Lafleur
1-1950 Chateau Lafleur Magnum
2-1961 Chateau Lafleur
1-1961 Chateau Lafleur Magnum
3-1947 Chateau Latour-a-Pomerol
1-1947 Chateau Latour-a-Pomerol Magnum
12-1961 Chateau Latour-a-Pomerol (in OWC)
1-1961 Chateau Latour-a-Pomerol Magnum
3-1947 Chateau Petrus
6-1961 Chateau Petrus
2-1961 Chateau Petrus Magnum
2-1945 Chateau Trotanoy
2-1947 Chateau Trotanoy
1-1950 Chateau Trotanoy
2-1961 Chateau L’Evangile
2-1945 Chateau L’Eglise Clinet
2-1947 Chateau L’Eglise Clinet
1-1947 Chateau L’Eglise Clinet Magnum
2-1949 Chateau L’Eglise Clinet

In an email sent on October 7 2004, Kurniawan thanked Greenberg for his hospitality and the tour of Greenberg’s home earlier that day. (“[Y]our mansion is a showcase. Amazing!!”). The email also enclosed the invoice for the above wines. Kurniawan further stated: “I will let u know once I get the rest, hopefully within 2 weeks. Also, if u want additional btls of any wines, u can have all. I will also let u have the mag of 29 RC and 2 add. btls, along some other gems.

On October 11, 2004, Rudy Kurniawan sent another email to Eric Greenberg stating as follows:

“1 - got the wire, thanks
2 – the additional wines are here, but I will be in NYC wed-sun, Can we do next week, also, perhaps some more burgs have arrived then?? Do you prefer refrigerated truck or overnight shipment so I can arrange?
3 – Do you want 1919 Vogue Musigny?: I forgot to include on list. I can splt 3 with u (I have 6 comin ay $3000ea)
4 – [Referring to a list of wines given to him to by Eric Greenberg apparently earlier that day] Can u delete the wines you DON’T want to sell and INCLUDE prices of those to sell. I can move some, actually try to move those ‘suspects’ Bordeaux for u.
…p.s. I tried the Georges Churchy 1899 Petrus from zachys, same as your 1899/1900 mag, not good for sure.”

Greenberg responded by email three hours later and embedded his answers in the original text of Kurniawan’s email which, for clarity sake, stated as follows:

“2 – REFRIGERATED TRUCK
3 – YES
4 – OK. GO UNDER THE ASSUMPTION THAT I WILL SELL SOME OF MOST THINGS. THE LIST IS SO LARGE. BUT I WILL SELL ALL THAT OLD BORDEAUX. I CANNOT PRICE OUT THAT WHOLE LIST. IF YOU LET ME KNOW WHAT, I CAN PRICE THEM, OR WE CAN LOOK AT THE RETAIL PRICE ON WINE SEARCHER.
[Regarding Kurniawan’s suggestion that he could “try to move those ‘suspects’ Bordeaux for u”] – "I AM PUTTING IT ON AUCTION

When asked about this last statement during his deposition, Greenberg reaffirmed his written statement “I AM PUTTING IT ON AUCTION” referred to Rudy’s suggestion that that he would “try to move those ‘suspects’ Bordeaux for you”:

“Q. And then when he said – what he said was, “Can you delete the wines you don’t want to sell and include prices of those to sell? I can move some, actually try to move those ‘suspects’ Bordeaux for you.” And you can read your response to yourself.
A. I said here that I’m putting it on auction.

[Greenberg Depo p. 151, line 23 to p. 152, line 7.]

Greenberg testified that during Rudy Kurniawan’s visit to Greenberg’s home on October 7, 2004 the two of them shared a magnum of 1961 Latour-a-Pomerol from Greenberg’s cellar along with Greenberg’s cellar master, Thierry Lovato. In his deposition testimony Greenberg said that their conversation concerning the 1961 Latour-a-Pomerol, and the subsequent email from Rudy that afternoon offering to sell Greenberg’s “suspect” Bordeaux, made him realize something was clearly wrong with Rudy Kurniawan. Greenberg testified (on December 2, 2010) that:
.
“this is where I have an issue with Mr. Kurniawan. Mr. Kurniawan may have been engaged in the business of selling fake wine. And this is what caused me to suspect this man's business motives. At our house, we drank a magnum of '61 Latour a Pomerol. Thierry and I tasted it, and we thought it tasted magnificent. He must have had another agenda, because he sold a lot of Latour a Pomerol at auction. And he said he didn't think it tasted right. And Thierry and I were looking at each other, because we had this wine many times, and it tasted great to us. And so he was saying, well, I don't know if it's right. And I'm like, you know what, you're full of shit, Rudy.

And so basically Zachys looked at that wine. They were comfortable with it. I trusted Zachys more than I trusted Rudy Kurniawan, and it was at this stage that I realized this guy had a problem.”
[Greenberg Depo, p. 152, line 23 to p. 153, line 20.]

Despite his admitted knowledge that Rudy “had a problem,” Greenberg apparently continued to deal with Kurniawan. In his deposition, Mr. Greenberg testified as follows:

“Q And in this block quote there where it says, "Okay. I will sell all of that old Bordeaux."
A Yeah.
Q Do you see that?
A Yes.
Q Did you in fact do business with Mr. Kurniawan afterwards?
A I may have. I may have.
Q And you may have sold old Bordeaux through him?
A I wouldn't say sold old Bordeaux through him. I might have sold old Bordeaux to him
.”
[Greenberg Depo p. 154, lines 4-12]

On April 28, 2005, Greenberg sent an email to Danielle Price, the wine buyer for the Wynn group of hotels in Las Vegas, offering her over a million dollars worth of incredibly rare old burgundies and Bordeaux as follows:
Image

Greenberg stated in the email that these wines “are from the same Nicolas collection that went berserk at auction with Acker this past weekend. [N.B. A reference to the wines sold by Rudy Kurniawan at the Acker auction held on April 23, 2005 (Lots 412 to 458)] They are identical to the beautiful mag of 61 petrus I got for you….” Greenberg stated that “Wine from this collection has been tasted by Parker, Meadows, Kapon, Bipin, was a significant component of the NYC top 100 tasting last year, etc.” Greenberg explained that “I own about $1 M in wine from this collection. My partner bought $8M worth, and I took about 1.5M of it. He has more he will part with, and I am getting more for me and some others. I want to show you this first, for obvious reasons.”

The email closed by saying: “No problem if you are not interested. I just wanted you to see it. I am ordering a bunch more, and can get whatever you want immediately.”

NOTE: Mr. Koch’s lawsuit against Eric Greenberg concerns two Zachys auctions which took place on December 3, 2004 and October 28, 2005, and the record (at this point at least) contains no further information on the relationship between Rudy Kurniawan and Eric Greenberg after April of 2005.
_______________________________________
Now for my comment/summary/opinion on the above:

Based on the above evidence from the record, it appears that Mr. Greenberg, despite twice buying "fake" and "suspect/bad" wines from Rudy Kurniawan prior to December of 2003, and despite his admission that he knew as of October 7, 2004 that "Kurniawan may have been engaged in the business of selling fake wine," thereafter proceeded to purchase approximately $1.5 million of extremely rare wines purportedly sourced from Nicolas directly from Kurniawan. He then apparently sold $500,000 of that wine, and he was in the process of “ordering a bunch more” at the end of April of 2005. Moreover, in Greenberg's own words, Rudy was his "partner" in Greenberg's attempted sale of such wines to third parties such as the Wynn Hotel chain. Despite Rudy's written offer to "try to move [Greenberg's] 'suspect' Bordeaux," which I presume is a reference to the $950,000+ of remaining "fake" and "suspect" wines Greenberg purchased from Royal which were not returned to Royal, Greenberg decided to "put it on auction" himself.

(NEXT...after some delay...Part III -- GREENBERG SELLS WINES THAT OTHERS CLAIM ARE COUNTERFEIT)
Last edited by Don Cornwell on June 28th 2012, 4:03pm, edited 2 times in total.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3599  Postby Matthew Hemming » June 28th 2012, 2:27am

Bloody oath this is a sordid little business.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3600  Postby RichardFlack » June 28th 2012, 4:36am

Matthew Hemming wrote:Bloody oath this is a sordid little business.


little?

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