RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

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Post #3536  Postby Dan Collins » June 25th 2012, 1:43pm

Thanks, Paul. Please continue to contribute.

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Post #3537  Postby John Morris » June 25th 2012, 3:17pm

Stuart BeauneHead Niemtzow wrote:Paul, don't know when this tasting was, but do you know what happened to the empty bottles? Or, in the case of the wines Rudy provided, do you know if they had been recently "re-used".

Sorry...I couldn't resist this picture of absurdity of Rudy re-using the empties from your tasting....or the same bottles from an earlier tasting. That is mind-boggling. Even if they came from Bouchard to Christies, that doesn't mean they came from Christies to the tasting without being refilled. Another evil of the scam: People unable to tell if they had an original wine from a particular bottle ..or a descendant.


Paul addressed that explicitly, saying Rudy didn't provide the wines and didn't have access to them before the dinner:
There is no question of their provenance, nor in my mind any doubt of them being tampered with after they were shipped, because if I don’t actually remember personally receiving the wines, and personally delivering them to Patina where the dinner was held, I am near certain that is what happened. I did search my emails, and I have one from me to Patina’s staff asking them whether I could deliver the wines on a specific date, a few days before the tasting to allow for the wines to be stood up and sediment to settle. In other words, I’m pretty sure the wines were never even in Rudy’s physical possession between their purchase and the dinner, but went from Bouchard to the importer to me to Patina.
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Post #3538  Postby paul hanna » June 25th 2012, 3:47pm

No doubt Rudy drank a lot of great real wine, and sold a lot of fake stuff....
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Post #3539  Postby Eric LeVine » June 25th 2012, 4:20pm

Stuart BeauneHead Niemtzow wrote:Paul, don't know when this tasting was, but do you know what happened to the empty bottles?

That strikes me as a likely rhetorical question. I fully suspect that Rudy went home with all of the bottles in the end... (Which would allow him to recoup the tasting down the line.)
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Post #3540  Postby John Morris » June 25th 2012, 6:55pm

Eric LeVine wrote:
Stuart BeauneHead Niemtzow wrote:Paul, don't know when this tasting was, but do you know what happened to the empty bottles?

That strikes me as a likely rhetorical question. I fully suspect that Rudy went home with all of the bottles in the end... (Which would allow him to recoup the tasting down the line.)


But there's been no suggestion that he faked Bouchard's, has there, and Paul W. just said he was pretty sure Rudy hadn't.
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Post #3541  Postby Glenn Gallup » June 25th 2012, 7:30pm

I don't remember.
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Post #3542  Postby Philip Ente » June 25th 2012, 8:02pm

Based on my experiences with Paul, I feel it is very unlikely that he could have been fooled by those wines, especially the whites. I had previously mentioned that it would also be very difficult to trick Bernard Herve.

It will be a monumental task to determine which of the Rudy bottles presented to the critics were actually fakes, but if can be done, it will probably be done here.
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Post #3543  Postby Eric LeVine » June 25th 2012, 8:27pm

Wow, the last few posters are not reading. I think that OBVIOUSLY the wines at said tasting were real. However, what were the odds about the future life of the bottles emptied at that tasting? In may respects, Rudy could afford to be incredibly generous if he could buy the genuine article, pour it for a group, and then turn around and refill and resell the same bottle for even more $$ later. That was the whole scam.

Heck, I think back to the bottle of 1990 Chave Cuvee Cathelin that Rudy snagged off the restaurant list and poured at this event: https://www.cellartracker.com/event.asp?iEvent=86

What are the odds that Rudy went home with the empty bottle and that it re-entered circulation at some point for more than $1000? I would say pretty darned good...
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Post #3544  Postby John Morris » June 26th 2012, 4:57am

Eric -- I was trying to make the point that he may not have had any interest in old Bouchard bottles, as Paul said:

Paul Wasserman wrote:Nor does it appear to be a pattern of his to counterfeit or consign old Bouchards. I don’t think what he did was haphazard or a free for all.
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Post #3545  Postby Howard Cooper » June 26th 2012, 6:25am

Eric LeVine wrote:Wow, the last few posters are not reading. I think that OBVIOUSLY the wines at said tasting were real. However, what were the odds about the future life of the bottles emptied at that tasting? In may respects, Rudy could afford to be incredibly generous if he could buy the genuine article, pour it for a group, and then turn around and refill and resell the same bottle for even more $$ later. That was the whole scam.

Heck, I think back to the bottle of 1990 Chave Cuvee Cathelin that Rudy snagged off the restaurant list and poured at this event: https://www.cellartracker.com/event.asp?iEvent=86

What are the odds that Rudy went home with the empty bottle and that it re-entered circulation at some point for more than $1000? I would say pretty darned good...


I bet a lot of the following occurred in this and other scandels. Fraud buys the real thing. Fraud gives the real thing to influential writers to review. Writers praise real wine. The price goes up. Fraud then sell fake bottles in the auction market with bona fides based on the reviews. Wine writers are not duped in the sense that they provided glowing reports on fake wines. Rather, they are used to pump up the price of future fake wines to be sold by giving credibility to fraud.
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Post #3546  Postby Lewis Dawson » June 26th 2012, 8:52am

Howard, I think it is very likely that happened as you describe it. People here prefer to believe that Meadows was duped, but they are just speculating in most cases. Same thing with Rodenstock serving wines to Parker, Broadbent, Robinson, et al. In fact, there are very few documented cases of Rudy and Hardy serving fake wines that passed muster with "the experts," although it may have happened. We don't know, and not likely to ever know in most cases.
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Post #3547  Postby Craig Gleason » June 26th 2012, 9:47am

I agree with Howard and Lew that the first choice to serve to people like Allan would have been the real thing. Second choice would probably be real, old Burgundy re-labeled or re-bottled as a trophy. As with Rodenstock, it seems that a lot of the wines in the tastings were real, or real enough, so that a critic's impression was that the tasting overall was legit. Then as Eric says, Rudy could re-use those bottles and make more of what was raved about.

Another question that has come up is about all the large formats at tastings. There is a story in The Billionaire's Vinegar about the staff at a Bdx first growth decanting two regular bottles into a magnum while serving magnums at an event. No reason why that couldn't have been Rudy's way too.
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Post #3548  Postby Stuart BeauneHead Niemtzow » June 26th 2012, 9:48am

John Morris wrote:
Stuart BeauneHead Niemtzow wrote:Paul, don't know when this tasting was, but do you know what happened to the empty bottles? Or, in the case of the wines Rudy provided, do you know if they had been recently "re-used".

Sorry...I couldn't resist this picture of absurdity of Rudy re-using the empties from your tasting....or the same bottles from an earlier tasting. That is mind-boggling. Even if they came from Bouchard to Christies, that doesn't mean they came from Christies to the tasting without being refilled. Another evil of the scam: People unable to tell if they had an original wine from a particular bottle ..or a descendant.


Paul addressed that explicitly, saying Rudy didn't provide the wines and didn't have access to them before the dinner:
There is no question of their provenance, nor in my mind any doubt of them being tampered with after they were shipped, because if I don’t actually remember personally receiving the wines, and personally delivering them to Patina where the dinner was held, I am near certain that is what happened. I did search my emails, and I have one from me to Patina’s staff asking them whether I could deliver the wines on a specific date, a few days before the tasting to allow for the wines to be stood up and sediment to settle. In other words, I’m pretty sure the wines were never even in Rudy’s physical possession between their purchase and the dinner, but went from Bouchard to the importer to me to Patina.


John, not that this is important, since my point was attempted humor.

But,there were two groups of wines at that dinner. Some that came directly from Bouchard. Some that came from Rudy , who got them at Christies. Rudy ,as I think Paul wrote, had access to this latter group, though.
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Post #3549  Postby Stuart BeauneHead Niemtzow » June 26th 2012, 9:58am

Lewis Dawson wrote:Howard, I think it is very likely that happened as you describe it. People here prefer to believe that Meadows was duped, but they are just speculating in most cases. Same thing with Rodenstock serving wines to Parker, Broadbent, Robinson, et al. In fact, there are very few documented cases of Rudy and Hardy serving fake wines that passed muster with "the experts," although it may have happened. We don't know, and not likely to ever know in most cases.


No one will ever know. I don't fault Allen for not knowing, either. He is human.

The problem is that he enabled/authenticated Rudy-- through whatever wines he tasted and wrote about-- and his continued presence at all the lavish events with Rudy that he wrote about and allowed Acker to tout. That he also authenticated the wines is a much less important role in the scam. He is , like the rest of us, human. But, he had the power to authenticate the guy, too. That's where, IMO, he bears responsiblity. Rudy was allowed to continue unhindered for almost six years of havoc, as far as I can tell, because no one I've read or heard about ever specifically called "b.s." on him or his activities during that period. And, as people have pointed out, "calling b.s." on Rudy was not an easy thing to do, as it would have required calling b.s. on Allen Meadows and others who were followers in that period, too.

I've always assumed...and, I think read...that Rudy would ensure that the dinners before the auctions he sent his stuff to...tasted the real things, though the stuff being auctioned might not have been real. That only makes sense. Rudy recouped all of his investments in the genuine articles through "recycling". He was "green" it seems.
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Post #3550  Postby jdietz » June 26th 2012, 10:27am

Stuart BeauneHead Niemtzow wrote:I've always assumed...and, I think read...that Rudy would ensure that the dinners before the auctions he sent his stuff to...tasted the real things, though the stuff being auctioned might not have been real. That only makes sense. Rudy recouped all of his investments in the genuine articles through "recycling". He was "green" it seems.


It's hard to find any humor in this whole sad case, but this comment on Rudy being `green' comes dang close. In a sick sort of way.
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Post #3551  Postby Keith Levenberg » June 26th 2012, 10:30am

Lewis Dawson wrote:Howard, I think it is very likely that happened as you describe it. People here prefer to believe that Meadows was duped, but they are just speculating in most cases. Same thing with Rodenstock serving wines to Parker, Broadbent, Robinson, et al. In fact, there are very few documented cases of Rudy and Hardy serving fake wines that passed muster with "the experts," although it may have happened. We don't know, and not likely to ever know in most cases.

It would certainly make more sense for Rudy to save the genuine bottles for the press, but we know for a fact that he served Meadows a faux Ponsot Clos St. Denis.
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Post #3552  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 #3553  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 #3554  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 #3555  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 #3556  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 #3557  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 #3558  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 #3559  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 #3560  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 #3561  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 #3562  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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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3563  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. . . .
Last edited by Don Cornwell on June 27th 2012, 3:29am, edited 1 time in total.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3564  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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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3565  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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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3566  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)
Last edited by Don Cornwell on August 17th 2012, 7:06am, edited 3 times in total.
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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3567  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 #3568  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 #3569  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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Re: RUDY KURNIAWAN SPECTRUM / VANQUISH WINE AUCTION FRAUD THREAD (MERGED)

Post #3570  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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