RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Tasting notes, varietals, grapes - anything related to wine
greg gartland
 
Posts: 80
Joined: February 19th 2010, 9:29am

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6451  Postby greg gartland » April 24th 2014, 12:55pm

Burr and Forman is a well known firm, so filing that complaint at anything close to their usual rates was a significant expense.

Advertisement

Marcus Ford
 
Posts: 22
Joined: January 30th 2012, 8:49pm
Location: Shanghai, China

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6452  Postby Marcus Ford » April 25th 2014, 3:15am

AWC responds,
http://www.jancisrobinson.com/articles/a201404251.html
Seems as if there will be quite a lot of commentary ongoing,
should be interesting.....
Shanghaimarcus
ITB in China, 14
User avatar
Don Cornwell
 
Posts: 1257
Joined: June 10th 2010, 1:24am
Location: Los Angeles, CA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6453  Postby Don Cornwell » April 25th 2014, 3:44am

KeithKW wrote:For those who are interested, Jancis Robinson has posted the entire 50+page complaint:
http://www.jancisrobinson.com/files/pdf ... _17_14.pdf

For those of you who haven't seen the complaint, or don't want to wade through all of the legalease, here are the Cliff Notes:

Mr. LeCraw alleges that he bought a series of rare wines from Antique Wine Company and its owner Stephen Williams in 2006-2007 which were expressly represented to be authentic. LeCraw claims that he discovered in 2013, when he attempted to consign some of them to auction, that all of the wines are fake and that the defendants knew at the time that they were sold that the wines were counterfeit.

The counterfeit wines include 1787 and 1847 Chateau Yquem, Chateau Lafite Rothschild from 1784, 1789, 1791, 1800, 1815, 1846 (magnum), 1848 (magnum), 1889, 1894, 1898 and 1906 (magnum) and a 6 Liter of 1908 Chateau Margaux.

LeCraw alleges that when Frank Martell came to inspect his cellar for potential auction in 2013 he learned for the first time that several of the wines might be fake and that he should retain an expert to examine them. Maureen Downey subsequently examined the bottles and determined they were fake. Antique Wine Company refused to refund LeCraw's money and challenged Ms. Downey's conclusions that the wines were fake.

In 2014 LeCraw had the Chateau Yquem wines and the Lafites inspected at the respective chateau. Chateau Yquem determined that both the 1787 and 1847 were counterfeit. The Chateau also said that the sticker on the bottle claiming that AWC presented the bottle to Comte Lur-Saluces in 2007 for authentication was nonsense because Lur-Saluces left Chateau Yquem in 2004.

Chateau Lafite examined the above listed bottles of Lafite and declared all of them are counterfeit (or "faux, faux, faux" as noted above). Those bottles all contained rebouchage labels on the back of the bottles showing that the bottles were topped up, recorked and re-labeled between 1979 and 1983. Just one problem -- the rebouhage stickers all had the 5 Arrows Domaines Lafite mark on them which Lafite didn't use until 1988. (That's something I've pointed out before in this thread.)

LeCraw also alleges that he shipped more than 200 bottles to AWC on consignment, including magnums, jeroboams, imperials, and one of a kind bottles including 5 liters and an 18 liter bottle. He claims the wines had a value in excess of $3 million and that he has not been paid for the wines and that AWC has refused to account for them.

Assuming the factual allegations of the complaint are true, liablity seems clear cut and the evidence suggests willful fraud, which would likely result in the imposition of some type of punitive damages. Given that, it's a bit odd that Mr. LeCraw's lawyers threw the proverbial kitchen sink into the complaint which has 16 different counts and includes a host of different claims including breach of contract, fraud, conversion, breach of express and implied warranties under both the Uniform Commercial Code and the Federal Magnson-Moss Warranty Act, violation of the Georgia Fair Business Practices Act, a RICO violation and a Georgia RICO violation.

Civil RICO claims (while holding out the theoretical prospect of treble damages and attorneys fees) are tremendously expensive to litigate (for both sides) and seldom reach trial. Because they consume huge amounts of court resources, often for little end result, such claims are generally disfavored by judges in this type of civil context -- a fact which might backfire on Mr. LeCraw. But the fact that a RICO claim is included in the complaint suggests that Mr. LeCraw is trying to send a clear message that he intends, like Bill Koch did, to use his wealth to make Antique Wine Company and its owner Stephen Williams pay dearly for having defrauded him.

The courts tend to strictly construe the RICO statute and demand detailed pleading of the alleged mail or wire fraud as well as the "pattern" and "enterprise" elements of the claim. RICO allegations almost invariably prompt the defendants to file motions to dismiss the RICO cliams. It's debatable whether the RICO allegations in the LeCraw complaint have sufficient specifity to satisfy the RICO pleading requirements in the 11th Circuit (which is the Circuit in which Georgia is located). So there will almost certainly be a motion to dismiss the RICO claims filed by the Defendants.

It's also unusual to see a RICO enterprise allegation based on alleged mail and wire fraud asserted against a series of foreign commercial entities. Nevertheless, in a decision handed down yesterday, entitled European Community v. RJR Nabisco, Inc., ____ F.3d ___ , 2014 WL 1613878 (2d. Cir. April 23, 2014), the Federal Court of Appeals for the Second Circuit ruled that RICO claims alleging mail or wire fraud or violations of the Travel Act, can be applied to foreign conduct where the complaint alleges the use of US mail or wire communications, or travel to or from the US, for the purpose of effectuating the fraud. The LeCraw complaint does contain such factual allegations, including the fact that Defendant Stephen Williams flew to the US to deliver the counterfeit bottle of 1787 Yquem, but it does not allege a violation of the Travel Act as a predicate act. (Oops! I sense an amended complaint coming.) But, if nothing else, the timing of LeCraw's RICO claim was good in light of the Second Circuit's decision.

I think one might reasonably speculate that the "kitchen sink" or "shotgun" approach to the LeCraw complaint and the inclusion of the RICO allegations are intended to try to force the defendants into settling the case early to avoid incurring huge legal fees. But, if the case is in fact litigated, it promises to be interesting theater. [popcorn.gif] [popcorn.gif]
Last edited by Don Cornwell on April 25th 2014, 3:10pm, edited 2 times in total.
Don Cornwell
Oxidized Burgs Wiki
Nigel Groundwater
 
Posts: 322
Joined: May 31st 2009, 3:17am
Location: London, UK

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6454  Postby Nigel Groundwater » April 25th 2014, 4:55am

Don Cornwell wrote:
KeithKW wrote:For those who are interested, Jancis Robinson has posted the entire 50+page complaint:
http://www.jancisrobinson.com/files/pdf ... _17_14.pdf

For those of you who haven't seen the complaint, or don't want to wade through all of the legalease, here are the Cliff Notes:

Mr. LeCraw alleges that he bought a series of rare wines from Antique Wine Company and its owner Stephen Williams in 2006-2007 which were expressly represented to be authentic. LeCraw claims that he discovered in 2013, when he attempted to consign some of them to auction, that all of the wines are fake and that the defendants knew at the time that they were sold that the wines were counterfeit.

The counterfeit wines include 1787 and 1847 Chateau Yquem, Chateau Lafite Rothschild from 1784, 1789, 1791, 1800, 1815, 1846 (magnum), 1848 (magnum), 1889, 1894, 1898 and 1906 (magnum) and a 6 Liter of 1908 Chateau Margaux.

LeCraw alleges that when Frank Martell came to inspect his cellar for potential auction in 2013 he learned for the first time that several of the wines might be fake and that he should retain an expert to examine them. Maureen Downey subsequently examined the bottles and determined they were fake. Antique Wine Company refused to refund LeCraw's money and challenged Ms. Downey's conclusions that the wines were fake.

In 2014 LeCraw had the Chateau Yquem wines and the Lafites inspected at the respective chateau. Chateau Yquem determined that both the 1787 and 1847 were counterfeit. The Chateau also said that the sticker on the bottle claiming that AWC presented the bottle to Comte Lur-Saluces in 2007 for authentication was nonsense because Lur-Saluces left Chateau Yquem in 2004.

Chateau Lafite examined the above listed bottles of Lafite and declared all of them are counterfeit (or "faux, faux, faux" as noted above). Those bottles all contained rebouchage labels on the back of the bottles showing that the bottles were topped up, recorked and re-labeled between 1979 and 1983. Just one problem -- the rebouhage stickers all had the 5 Arrows Domaines Lafite mark on them which Lafite didn't use until 1988. (That's something I've pointed out before in this thread.)

LeCraw also alleges that he shipped more than 200 bottles to AWC on consignment, including magnums, jeroboams, imperials, and one of a kind bottles including 5 liters and an 18 liter bottle. He claims the wines had a value in excess of $3 million and that he has not been paid for the wines and that AWC has refused to account for them.

Assuming the factual allegations of the complaint are true, liablity seems clear cut and the evidence suggests willful fraud, which would likely result in the imposition of some type of punitive damages. Given that, it's a bit odd that Mr. LeCraw's lawyers threw the proverbial kitchen sink into the complaint which has 16 different counts and includes a host of different claims including breach of contract, fraud, conversion, breach of express and implied warranties under both the Uniform Commercial Code and the Federal Magnson-Moss Warranty Act, violation of the Georgia Fair Business Practices Act, a RICO violation and a Georgia RICO violation.

Civil RICO claims (while holding out the theoretical prospect of treble damages and attorneys fees) are tremendously expensive to litigate (for both sides) and seldom reach trial. Because they consume huge amounts of court resources, often for little end result, such claims are generally disfavored by judges in this type of civil context -- a fact which might backfire on Mr. LeCraw. But the fact that a RICO claim is included in the complaint suggests that Mr. LeCraw is trying to send a clear message that he intends, like Bill Koch did, to use his weath to make Antique Wine Company and its owner Stephen Williams pay dearly for having defrauded him.

The courts tend to strictly construe the RICO statute and demand detailed pleading of the alleged mail or wire fraud as well as the "pattern" and "enterprise" elements of the claim. RICO allegations almost invariably prompt the defendants to file motions to dismiss the RICO cliams. It's debatable whether the RICO allegations in the LeCraw complaint have sufficient specifity to satisfy the RICO pleading requirements in the 11th Circuit (which is the Circuit in which George is located). So there will almost certainly be a motion to dismiss the RICO claims filed by the Defendants.

It's also unusual to see a RICO enterprise allegation based on alleged mail and wire fraud asserted against a series of foreign commercial entities. Nevertheless, in a decision handed down yesterday, entitled European Community v. RJR Nabisco, Inc., ____ F.3d ___ , 2014 WL 1613878 (2d. Cir. April 23, 2014), the Federal Court of Appeals for the Second Circuit ruled that RICO claims alleging mail or wire fraud or violations of the Travel Act, can be applied to foreign conduct where the complaint alleges the use of US mail or wire communications, or travel to or from the US, for the purpose of effectuating the fraud. The LeCraw complaint does contain such factual allegations, including the fact that Defendant Stephen Williams flew to the US to deliver the counterfeit bottle of 1787 Yquem, but it does not allege a violation of the Travel Act as a predicate act. (Oops! I sense an amended complaint coming.) But, if nothing else, the timing of LeCraw's RICO claim was good in light of the Second Circuit's decision.

I think one might reasonably speculate that the "kitchen sink" or "shotgun" approach to the LeCraw complaint and the inclusion of the RICO allegations are intended to try to force the defendants into settling the case early to avoid incurring huge legal fees. But, if the case is in fact litigated, it promises to be interesting theater. [popcorn.gif] [popcorn.gif]

A helpful and focused summary as usual and, assuming all the commentary attached to the Chateaux [Lafite and Yquem] in the complaint are verbatim and accurate, it will be interesting to see how this is defended particularly since the AWC present themselves as experts.

However without wishing to argue in any sense against the complaint since I have no information other than that presented in the complaint there were just two things that struck me.

Firstly, the Chateau Yquem comment "that the sticker on the bottle claiming that AWC presented the bottle to Comte Lur-Saluces in 2007 for authentication was nonsense because Lur-Saluces left Chateau Yquem in 2004" is at least potentially a non-sequitor since the fact that Lur-Saluces was no longer running Yquem did not mean that it wasn't presented to him for authentication.

Of course it is ironic that a letter from Hardy Rodenstock was apparently also part of the 'authentication package' presented with the AWC bottle since one of the key parts of Rodenstock's 'legend' was his [initially] solid relationship with Lur-Saluces who provided a measure of authentication that his many ancient Yquem finds were real. Of course later they fell out and their 'history' was somewhat rewritten.

Nevertheless it is at least possible that AWC went to Lur-Saluces for authentication although, if that's what happened, I assume they didn't tell him that Hardy had also 'blessed' it. ;)
Of course, even if it happened like that, the more current Yquem reaction presumably counts for more but surely a better answer would have included Lur-Saluces himself saying whether he had or had not 'authenticated' it.

As for the Lafite bottles there would seem to be no room for doubt about the actuality although again it is surely possible, however unlikely, that the rebouchage labels on the back of the bottles, showing that the bottles were topped up, recorked and re-labeled between 1979 and 1983, were indeed added well after the event [because allegedly Lafite didn't use that design until 1988] simply as a record. Put simply, while the fact that they must have been added well after the re-corkings might suggest fraud, it doesn't of itself require that conclusion. Nevertheless taken with the other evidence it 'adds to the pile'.

Don's speculation about a possible rationale for the 'kitchen sink/shotgun' approach is also interesting and, as he surmises, is this aimed at promoting an out of court settlement due to the size of the potential penalties or are we are about to witness yet more "interesting theater"?
RichardFlack
SubscriberSubscriber
 
Posts: 64
Joined: June 4th 2012, 10:41pm
Location: Toronto

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6455  Postby RichardFlack » April 26th 2014, 4:28am

Comment from Williams / AWC on Purple Pages
http://www.jancisrobinson.com/articles/a201404251.html
The plot thickens!
User avatar
Bruce Leiser_owitz
SubscriberSubscriber
 
Posts: 10719
Joined: June 16th 2009, 12:54pm
Location: Los Angeles, CA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6456  Postby Bruce Leiser_owitz » April 26th 2014, 9:15am

Marcus Ford wrote:AWC responds,
http://www.jancisrobinson.com/articles/a201404251.html
Seems as if there will be quite a lot of commentary ongoing,
should be interesting.....


It's certainly an interesting response. It seems as if the facts alleged in the complaint are going to be subject to a great deal of dispute. If the matter isn't resolved and goes forward, there could be
some very interesting testimony about how to authenticate very old bottles (or how to determine conclusively that they are fake).

Bruce
"Bruce you are correct."--Andrew Kaufman, 3/24/13.
Nigel Groundwater
 
Posts: 322
Joined: May 31st 2009, 3:17am
Location: London, UK

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6457  Postby Nigel Groundwater » April 26th 2014, 12:18pm

Bruce Leiser_owitz wrote:
Marcus Ford wrote:AWC responds,
http://www.jancisrobinson.com/articles/a201404251.html
Seems as if there will be quite a lot of commentary ongoing,
should be interesting.....


It's certainly an interesting response. It seems as if the facts alleged in the complaint are going to be subject to a great deal of dispute. If the matter isn't resolved and goes forward, there could be
some very interesting testimony about how to authenticate very old bottles (or how to determine conclusively that they are fake).

Bruce

It is certainly interesting how both parties apparently quote correspondence/dialogue with personnel from Yquem and Lafite to support their contentions although some issues should be provable facts e.g. did Lur-Saluces authenticate the Yquem or not?
The defendant says he did the plaintiff says not.... because he had retired prior to the date of the authentication. That latter 'disqualification' is odd but what does Lur-Saluces say today and what record exists?

Was a particular Rothschild logo in use by certain dates or not. One says yes the other says not etc etc. What deos the record say?

Incidentally the complaint refers to the AWC claim “to sponsor the CEBG Bordeaux Centre for Nuclear Studies which researches fine wine provenance with ion beam analysis to verify the age of the glass bottles and wine contained therein”.

HERE is the reference on the CENBG site to “Bottles of fine wine authenticated by ion beams” which refers to “an exclusive contract of co-operation with international fine wine merchant ‘The Antique Wine Company” with the aim of authenticating the glass of bottles by ion beams ”
Within this there is a Press Release which towards the end mentions the sale of the 1787 Chateau d’Yquem in 2006.

One wonders whether the plaintiff has availed himself of an anlysis of the glass in the bottles claimed to be fake.

However it's the 'conclusively' aspect of fake or genuine that remains problematical with very old wines as Koch found out when seeking to prove his Jefferson bottles and two other ancient bottles of Lafite and Latour were fake.

The 'nuclear' analysis [in bottle] can tell you whether the wine predates the nuclear age 1952 onwards or not. If Caesium 137 is detected it cannot come from the 18th, 19th or the first half of the 20th centuries. However if there is no Caesium 137 the technique is apparently unable to help with the period 1750-1950 which apparently carbon-dating [for which a sample is required] can't help with either.

However ion beam technology can date the glass bottle [again without opening it] in that grey zone of 1750-1950 and indeed forward too but genuinely very old bottles may be more easily obtained than the wine of the same period.

So e.g. if an allegedly 18th century wine is in a 19th century bottle it is obviously a fake but if the bottle passes and the wine is older than 1952 then the level of certainty would seem to disappear and other less definitive research is required.

Koch eventually relied on an analysis of the engraving on the bottles [which contradicted earlier research/opinion] to conclude that his Jefferson trophies were fakes but AFAIK even that evidence has never been peer reviewed although it is entirely plausible but presumably would not have been applicable to the other un-engraved Lafite and Latour bottles.

Nevertheless both the nuclear wine and glass techniques can independently show whether certain wines that are claimed to predate 1952 are conclusively a fake but ultimately a wine claimed to be e.g. from the 18th or 19th century might not fail either test and still be a fake since the bottle containing a fake wine might be 'of the correct period' and the wine it [at least] older than 1952. So each of these two techniques can show some wines to be conclusively fake [e.g. allegedly old wine in a 'younger' bottle and allegedly old wine shown to be younger than 1952] and together they will damn others while some very old wine can be shown to be plausibly genuine but none conclusively even based on these two tests in combination.

For wine post 1952, both techniques are capable of being used together to show whether the wine and the bottle are at least directionally compatible with each other as well as with the claimed vintage since the Caesium 137 varies over time.
This has been researched and mapped such that specific levels can be related to specific years and, taken with the bottle data, good fixes can apparently be established
Last edited by Nigel Groundwater on April 26th 2014, 12:29pm, edited 1 time in total.
User avatar
Zev R
 
Posts: 231
Joined: June 2nd 2009, 11:10pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6458  Postby Zev R » April 26th 2014, 12:27pm

There's a whole can of worms yet to be opened about the "reconditioning" and topping off of bottles by the domaines. How do you define the difference between
a) a legit undrinkable bottle from 1827,
b) the same bottle but reconditioned by topping off with 198x juice of the "same" wine,
c) a fake bottle conjured up by Hardy Rodenstock and brought to his good friend Alexandre de Lur Saluces who proceeds to recondition the - unbeknownst to him - fake bottle
d) a fake bottle conjured up by Hardy Rodenstock of undrinkable vinegar using a legit empty glass bottle from one of his wine dinners
e) a fake bottle of delicious wine mixed by Hardy or Rudy using a legit empty,
f) and so on...?
Which of those wines is the billionaire's vinegar? (To me, all of them are. None of those are wine you'd want to drink and you'd be fooling yourself if somehow you pretend you're partaking in history.)

Also, I have a question: Antiques and vintage car collectors often pay more for leaving in place the tarnish, corrosion, stains and wear & tear marks as a "patina". Is a non-reconditioned undrinkable bottle of 19th century wine worth more than a topped off bottle?
- Z. R o g o f f
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6459  Postby Glenn Gallup » April 26th 2014, 3:26pm

Since many many years ago I did military service maybe I can help with the substance of the LeCraw complaint. It's called Making the Rubble Bounce. I read the whole complaint and to this non legal mind it did seem redundant.
I have taken more out of alcohol
User avatar
Don Cornwell
 
Posts: 1257
Joined: June 10th 2010, 1:24am
Location: Los Angeles, CA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6460  Postby Don Cornwell » April 26th 2014, 4:21pm

Bruce Leiser_owitz wrote:
Marcus Ford wrote:AWC responds,
http://www.jancisrobinson.com/articles/a201404251.html
Seems as if there will be quite a lot of commentary ongoing,
should be interesting.....


It's certainly an interesting response. It seems as if the facts alleged in the complaint are going to be subject to a great deal of dispute. If the matter isn't resolved and goes forward, there could be
some very interesting testimony about how to authenticate very old bottles (or how to determine conclusively that they are fake).

Bruce

The response from Antique Wine Company is very interesting indeed. It certainly provides a new perspective as to why the Complaint would contain 16 different counts and a lot of claims based on breach of contract, breach of warranty, etc.

As is often the case, I find what is not said in the AWC reply every bit as interesting as what is said. First, there is no rebuttal for the claim that Chateau Yquem and Chateau Lafite have found all of the wines to be counterfeit. The only statement in the reply says that "The allegation that the wines sold to Mr LeCraw Jr. are fake has not been proven, is denied by the defendants and therefore is not fact." Second, there is no denial that LeCraw sent over 200 bottles of wine in mostly large formats to AWC, having a value in excess of $3 million and that AWC has refused to pay for them or account for them. Third, while AWC says that when it sold the Lafite wines it had in hand a purported letter from Domaines Lafite claiming to attest to the rebouchage of the Lafite bottles and that it was on Domaines Lafite letterhead with the five arrows design, there is no claim in the AWC statement that such letter is authentic. Moreover, the claim that some unidentified person from Domaines Lafite on an unspecfied date told AWC that Domaines Lafite used the 5 arrow design before 1988 (again at unspecified dates) doesn't do anything to advance the analysis.

According the official database of the US Trademark Office, the trademarked five arrows design for Domaines Barons de Rothschild Lafite with the R and Five Arrows (US Trademark Registration Number 74213434) was first used in commerce in connection with wine (according to the sworn application of the trademark owner) in November of 1989. Here is the Trademark Registration information from the government's TESS database:

Image

Mind you, the trademark application is a sworn statement by Domaines Barons de Rothschild Lafite that they first used this logo in commerce in connection with wine in November of 1989. So unless one assumes that Lafite deliberately lied to the US trademark office about the date of first use, one can take it as a given that the letter that AWC claims to have received is as counterfeit as the bottles apparently are.

The information disputed by AWC seems to go solely to the issue of fraud, with AWC claiming that it did not defraud Mr. LeCraw because it had reasonable information in hand to authenticate the wines. Like Nigel, I'm wondering why it is, that with all of the allegations and replies allegedly traded back and forth between the parties about the Yquem wines, no one has purported to contact Comte Lur-Saluces to determine whether he did or did not authenticate the 1787 and 1847 Yquems as claimed. I also wonder why AWC never bothered to verify with Chateau Lafie Rothischild whether the large cache of very old Lafites had in fact been rebouchaged at the Chateau as claimed. (It is clear from the response by AWC that they relied solely on the letter and rear strip labels. One might note here that since someone went to the trouble of counterfeiting the rear strip labels as well as the main labels for the wine, and the capsules, corks, etc. it certainly stands to reason that they could counterfeit a letter from Chateau Lafite -- in fact that could be done more easily than the other items.)

If it is true that AWC informed counsel for Mr. LeCraw prior to the filing of the Complaint that that Comte Lur-Saluces was presented with and authenticated the 1847 Yquem at his home (at Chateau de Fargues) in October 2007, then I think that perhaps Mr. LeCraw's counsel might have some explaining to do to the Judge. The Complaint alleges as follows:

    Similarly, Defendants placed their own sticker on the 1847 d’Yquem which states that AWC presented the bottle to Comte Alexandre Lur-Saluces of Chateau d’Yquem for inspection in October 2007. See Exhibit “C.” However, Chateau d’Yquem confirmed that Mr. Lur-Saluces left Chateau d’Yquem in 2004. Therefore, Mr. Lur-Saluces could not have inspected the bottle for Chateau d’Yquem in 2007. Defendants’ statement appearing on the very bottle sold to LeCraw which purports to represent that AWC traveled to Bordeaux to inspect the bottle with Mr. Lur-Saluces in October 2007 was knowingly false when Defendants made this bold misrepresentation.
Lawyers are under an affirmative duty not to misrepresent facts to the court. If Mr. LeCraw's counsel had received the information that AWC states that it provided to him and then filed the Complaint containing the above allegation, that would be, in my opinion, a clear misrepresenttion of fact to the court.
Last edited by Don Cornwell on April 27th 2014, 12:23pm, edited 2 times in total.
Don Cornwell
Oxidized Burgs Wiki
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6461  Postby Glenn Gallup » April 26th 2014, 7:14pm

Sometimes when people lie through their teeth they have a vested interest in staying on message.
I have taken more out of alcohol
User avatar
David Glasser
SubscriberSubscriber
 
Posts: 2177
Joined: August 16th 2009, 6:03pm
Location: Maryland

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6462  Postby David Glasser » April 27th 2014, 6:11am

But according to the Complaint the sticker says the bottle was presented "to Comte Alexandre Lur-Saluces of Chateau d’Yquem for inspection in October 2007."

The Comte was not "of Chateau d'Yquem" in 2007. Nor was he "at" Ch. d'Yquem in 2007. Shades of Lewinsky, we are devolving into a discussion of the meaning of "of!"

I am curious as to what the sticker said, and whether the bottle was evaluated by the Comte (regardless of where he was at), and what he said about it. I suppose those are all in dispute?
Nigel Groundwater
 
Posts: 322
Joined: May 31st 2009, 3:17am
Location: London, UK

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6463  Postby Nigel Groundwater » April 27th 2014, 8:08am

David Glasser wrote:But according to the Complaint the sticker says the bottle was presented "to Comte Alexandre Lur-Saluces of Chateau d’Yquem for inspection in October 2007."

The Comte was not "of Chateau d'Yquem" in 2007. Nor was he "at" Ch. d'Yquem in 2007. Shades of Lewinsky, we are devolving into a discussion of the meaning of "of!"

I am curious as to what the sticker said, and whether the bottle was evaluated by the Comte (regardless of where he was at), and what he said about it. I suppose those are all in dispute?

Fair point David but I doubt whether many people would quibble over the 'of Chateau d'Yquem' since Lur-Saluces is probably more 'of' Chateau d'Yquem than anybody there now or indeed anywhere else. In addition he was involved at looking at and deciding on more ancient [relevant to the bottle concerned] Yquem than anybody else and must surely have learned something extra from his experience with Rodenstock in that regard.

Howvere, as you said, what is surely vastly more important is 'was the bottle to which the sticker is attached actually inspected by Lur-Saluces' and 'what did he say about it'. If the complaint seeks to dimiss something that actually happened and was fairly reported on the sticker by inferring it was either 'untrue' or 'worthless' [only] because the Count had retired 3 years earlier than the date on the sticker then, as Don indicates, the plaintiff's team might have some explaining to do.
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6464  Postby Glenn Gallup » April 27th 2014, 8:58am

Not knowing anything about Mr. LeCraws law firm except for what one of the other posters said I think that if they made a serious error of fact in the filing of the lawsuit how do they command such high fees? And it's the net long term effect on the wine business I'm worried about. If fraud was committed here and goes unpunished because of whatever it can only serve to embolden the fraudsters.
I have taken more out of alcohol
User avatar
John Danza
 
Posts: 1112
Joined: December 4th 2009, 1:23pm
Location: Chicagoland

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6465  Postby John Danza » April 27th 2014, 10:57pm

Don Cornwell wrote:According the official database of the US Trademark Office, the trademarked five arrows design for Domaines Barons de Rothschild Lafite with the R and Five Arrows (US Trademark Registration Number 74213434) was first used in commerce in connection with wine (according to the sworn application of the trademark owner) in November of 1989. Here is the Trademark Registration information from the government's TESS database:

Image

Mind you, the trademark application is a sworn statement by Domaines Barons de Rothschild Lafite that they first used this logo in commerce in connection with wine in November of 1989. So unless one assumes that Lafite deliberately lied to the US trademark office about the date of first use, one can take it as a given that the letter that AWC claims to have received is as counterfeit as the bottles apparently are.


Since this is an application for a US trademark, isn't it possible the reference to "first used in commerce" is referring to being used in the US and not necessarily in France? I don't think the usage in other countries would have any bearing on the ownership of a trademark in the US. I'm basing this off of the Dominican cigar companies that have registered trademarks in the US for brands that have been used for decades around the world by Cuban owners of those brands.
John Danza
User avatar
J a y H a c k
SubscriberSubscriber
Wine Genius ;)
 
Posts: 8481
Joined: May 29th 2009, 9:59am

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6466  Postby J a y H a c k » April 28th 2014, 10:16am

Don Cornwell wrote: . . . Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason . . .
I hope Koch didn't pay a lot for the legal work. Under the stip, can Royal continue to sell post 1974 wine at lower prices and Sokolin just form a new company that simultaneously sells high priced and older wines? So long as Royal does not dissolve or discontinue operations, the literally, Sokolin is free to do whatever he wants. If my son, a second year law student (who really likes SQN white wine), gave me this draft, I would ask him if he had thought through all the possible permutations and then send him back for a redraft.

Just sayin'
Yes, that's a DM of 1978 Mouton!
BJ Hamel
SubscriberSubscriber
 
Posts: 108
Joined: March 11th 2010, 3:03pm
Location: Redwood City

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6467  Postby BJ Hamel » April 28th 2014, 12:33pm

J a y H a c k wrote:
Don Cornwell wrote: . . . Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason . . .
I hope Koch didn't pay a lot for the legal work. Under the stip, can Royal continue to sell post 1974 wine at lower prices and Sokolin just form a new company that simultaneously sells high priced and older wines? So long as Royal does not dissolve or discontinue operations, the literally, Sokolin is free to do whatever he wants. If my son, a second year law student (who really likes SQN white wine), gave me this draft, I would ask him if he had thought through all the possible permutations and then send him back for a redraft.

Just sayin'


I am not a lawyer, but it seems that you missed something in the agreement. If Royal is in business Sokolin can not sell pre 1975 or over $2500. If Royal goes out of business he can not control or profit share over 15% any operation that sells old or expensive wine. Well that is how I read it anyway.

(a) Neither Royal Wine Merchants, Ltd. nor Jeffrey Sokolin will ever, directly or indirectly, sell, cause to be sold, offer for sale, consign, or distribute “Certain Fine and Rare Wine,” meaning any bottle, magnum, imperial, or other format of wine that (1) is or purports to be of a 1975 or earlier vintage, or (2) is priced for sale (a) above $2,500 for any bottle, (b) above $5,000 for any magnum, (c) above $10,000 for any double-magnum, or (d) above a proportionate price limit for any format larger than double-magnum;

(b) Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason, Jeffrey Sokolin may, consistent with this order, subsequently become employed by a company the business of which includes the sale or consignment of Certain Fine and Rare Wine, provided that, in connection with such employment, Mr. Sokolin may not acquire (a) any controlling interest in such company, or (b) any profit participation, equity or other interest in such company exceeding 15%.
BJ Hamel
User avatar
J a y H a c k
SubscriberSubscriber
Wine Genius ;)
 
Posts: 8481
Joined: May 29th 2009, 9:59am

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6468  Postby J a y H a c k » May 1st 2014, 9:19am

Oops. You are correct. Reading too fast. It's not great drafting but it is legally sufficient.

BJ Hamel wrote:
J a y H a c k wrote:
Don Cornwell wrote: . . . Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason . . .
I hope Koch didn't pay a lot for the legal work. Under the stip, can Royal continue to sell post 1974 wine at lower prices and Sokolin just form a new company that simultaneously sells high priced and older wines? So long as Royal does not dissolve or discontinue operations, the literally, Sokolin is free to do whatever he wants. If my son, a second year law student (who really likes SQN white wine), gave me this draft, I would ask him if he had thought through all the possible permutations and then send him back for a redraft.

Just sayin'


I am not a lawyer, but it seems that you missed something in the agreement. If Royal is in business Sokolin can not sell pre 1975 or over $2500. If Royal goes out of business he can not control or profit share over 15% any operation that sells old or expensive wine. Well that is how I read it anyway.

(a) Neither Royal Wine Merchants, Ltd. nor Jeffrey Sokolin will ever, directly or indirectly, sell, cause to be sold, offer for sale, consign, or distribute “Certain Fine and Rare Wine,” meaning any bottle, magnum, imperial, or other format of wine that (1) is or purports to be of a 1975 or earlier vintage, or (2) is priced for sale (a) above $2,500 for any bottle, (b) above $5,000 for any magnum, (c) above $10,000 for any double-magnum, or (d) above a proportionate price limit for any format larger than double-magnum;

(b) Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason, Jeffrey Sokolin may, consistent with this order, subsequently become employed by a company the business of which includes the sale or consignment of Certain Fine and Rare Wine, provided that, in connection with such employment, Mr. Sokolin may not acquire (a) any controlling interest in such company, or (b) any profit participation, equity or other interest in such company exceeding 15%.
Yes, that's a DM of 1978 Mouton!
User avatar
dougwilder
 
Posts: 750
Joined: April 27th 2010, 6:15am
Location: Napa/Sonoma/San Francisco

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6469  Postby dougwilder » May 2nd 2014, 3:20pm

http://www.decanter.com/news/wine-news/ ... ue-lawyers Seems like his lawyers rationale is "Look, he was only ripping off rich people which isn't anywhere near as bad as ripping off poor people" continuing with "Fraud was just a hobby to Rudy so he could have a social life and to make people like him".
napa|sonoma|sf|pdwr.co|itb
User avatar
John Danza
 
Posts: 1112
Joined: December 4th 2009, 1:23pm
Location: Chicagoland

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6470  Postby John Danza » May 2nd 2014, 7:41pm

dougwilder wrote:http://www.decanter.com/news/wine-news/586840/rudy-kurniawan-has-served-his-sentence-argue-lawyers Seems like his lawyers rationale is "Look, he was only ripping off rich people which isn't anywhere near as bad as ripping off poor people" continuing with "Fraud was just a hobby to Rudy so he could have a social life and to make people like him".


There are going to be a lot of people that will like him when he gets to the big house. I'm sure they'll like him for years. He's probably not going to like being that popular though. [wow.gif]
John Danza
User avatar
Ron Kramer
 
Posts: 6770
Joined: June 6th 2009, 4:09pm
Location: Near Boston

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6471  Postby Ron Kramer » May 2nd 2014, 8:21pm

These buzzards do not get sent to those kind of cages.
Dan Collins
 
Posts: 101
Joined: March 21st 2012, 7:10pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6472  Postby Dan Collins » May 3rd 2014, 8:33am

dougwilder wrote:http://www.decanter.com/news/wine-news/586840/rudy-kurniawan-has-served-his-sentence-argue-lawyers Seems like his lawyers rationale is "Look, he was only ripping off rich people which isn't anywhere near as bad as ripping off poor people" continuing with "Fraud was just a hobby to Rudy so he could have a social life and to make people like him".


It's a very lame rationale. Of course Rudy didn't fleece poor people! They don't have enough money to make it worth his greedy while. Here's an art forgery story that appeared in the NYT today. It could be used as a template for the sale of old and rare wines: http://www.nytimes.com/2014/05/03/arts/ ... =arts&_r=0
b. c@stner
 
Posts: 579
Joined: June 8th 2009, 7:52pm
Location: Chicago Burbs...

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6473  Postby b. c@stner » May 5th 2014, 7:19pm

b 0 b
User avatar
John Morris
(Online)
SubscriberSubscriber
 
Posts: 9664
Joined: June 21st 2009, 2:09pm
Location: New York City

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6474  Postby John Morris » May 6th 2014, 7:36am

I can't recall another case where having been raised in a gated community has been cited as a mitigating factor in sentencing.
"I have some sympathy for these people as I was once caught in a similar situation after using the wrong shampoo on a client's raccoon." -- Craig Gleason

"There is not an infinite linear progression of betterness associated with rising alcohol intake. There is an obvious asymptote, followed by a decline in betterness...." -- Anton Dotson
steve goldun
SubscriberSubscriber
 
Posts: 77
Joined: October 7th 2009, 10:12am
Location: Los Angeles

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6475  Postby steve goldun » May 6th 2014, 8:03am

I can't recall another case where having been raised in a gated community has been cited as a mitigating factor in sentencing.


Well here are two recent examples. And this particular phenomonon even has a name now.

http://www.cnn.com/2014/02/05/us/texas-affluenza-teen/

http://www.cnn.com/2014/04/02/justice/d ... rape-case/
Steve Goldun
Los Angeles
ITB
User avatar
John Morris
(Online)
SubscriberSubscriber
 
Posts: 9664
Joined: June 21st 2009, 2:09pm
Location: New York City

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6476  Postby John Morris » May 6th 2014, 8:14am

Silly me!

FYI, here's the full sentencing memo by Rudy's lawyers.
Attachments
Kurniawan sentencing memo.pdf
(164.45 KiB) Downloaded 240 times
"I have some sympathy for these people as I was once caught in a similar situation after using the wrong shampoo on a client's raccoon." -- Craig Gleason

"There is not an infinite linear progression of betterness associated with rising alcohol intake. There is an obvious asymptote, followed by a decline in betterness...." -- Anton Dotson
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6477  Postby Glenn Gallup » May 6th 2014, 8:42am

Thank you Steve, you beat me to it. Seriously, maybe the interests of justice might be served by springing Rudy. He'll be on the first flight to Hong Kong and it's possible some offshore customer who got cheated will ... ummmm .... Deal with him.
I have taken more out of alcohol
KeithKW
 
Posts: 36
Joined: February 6th 2012, 4:58pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6478  Postby KeithKW » May 6th 2014, 9:34am

My favorite typo from the Rudy sentencing memo (or should I say Freudian slip?):

"Rudy ...soon moved up to the frenzy of the real thing – the fast moving adrenalized
world of lie auctions"

[rofl.gif]
K Wollenberg
Burgundy Fiend
User avatar
John Morris
(Online)
SubscriberSubscriber
 
Posts: 9664
Joined: June 21st 2009, 2:09pm
Location: New York City

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6479  Postby John Morris » May 6th 2014, 11:19am

There's some fascinating detail in the sentencing memo (pages 11-17) about Rudy's concoctions and Acker's role in egging him on. It alleges that Acker loaned him money to bid at the minimum to make it look like lots had sold when there wasn't a bona fide sale, and that Acker advanced him large sums even when there were no auctions of his wines scheduled.

The bolding is mine, as are the italicized comments:

As shown at trial, Rudy also engaged in the practice of reconditioning. He would acquire multiple bottles of particular wine with relatively low fill, then sacrifice a bottle’s contents to recondition the remaining bottles. He trusted that he could taste the open bottles and determine that the contents were in good condition before reconditioning and resealing. This was reflected at trial in the seven bottles of 1962 DRC purchased by Rudy and resold later as six, but with higher fill. The final product had been tampered with, had been adulterated in that what he did was not revealed, but properly contained the product that had been purchased. A bonus was that Rudy ended up with most of a bottle to enjoy himself.

In 2005, Rudy sold some of the wines he had purchased along with some that he had modified. [missing words in original] Acker Merrall a private sale to William Koch. Most of what was sold were bottles that had been purchased by Rudy in prior auctions. Not all of these were authentic; some bottles were refilled and/or replicated by Rudy.

Kapon began to urge Rudy to put together a large collection of wines from his collection and cellar (many of the wines purchased by Rudy at Acker Merrall’s auctions were still in the hands of Acker Merrall and easily available.) Rudy agreed and provided wine for two large auctions in 2006. Approximately 14,000 bottles of wine were put up for auction at these two events. The great majority of which had been previously purchased by Rudy. These included many vintages from Italy, Australia, Germany and the United States in addition to the Burgundy and Bordeaux offerings. At the request of John Kapon, Rudy started to ‘price’ support Acker Merrall by agreeing to buy wines at the reserve price when bidding fell short. The charges would be placed on his ‘account’ and the wines held by Acker Merrall.

By this time Rudy had collected the materials necessary to reproduce authentic looking bottles. He had a printer in Indonesia who created authentic reproductions of labels and stickers. Rudy also ordered stamps and authentic wax to mark and seal the bottles from other vendor.

All of the reproduction bottles that Rudy created were carefully created by his own hand in the kitchen of his home in Los Angeles. As shown by the evidence at trial, two or three bottles at a time would be soaked in the sink to remove the old labels. Then the new labels and appropriate stickers were carefully applied. Only after all of this was done and a proper looking bottle created would the bottle be filled with a mixture of other wines that would match, as close as possible, the taste of the vintage that was proclaimed by the label. This was slow, meticulous work. Working alone, Rudy created, filled and corked only a relatively small number of bottles. But, for the most part, they were very special wines. Rudy was able to produce bottles only when he was actually physically present in Arcadia, and then only when not attending to other business. Still, he was able over the years to create hundreds of bottles. There were few at first, but more later when pressure from Acker Merrall increased.

Starting in 2006, a part of the allure for Rudy to participate in the auctions and to have increasingly valuable submissions was in the form of advances made by Acker Merrall to Rudy. After Kapon valued Rudy’s proposed list of wines for the auction, he then made advance payments to Rudy. This quickly became millions of dollars. Trying to keep up with the very wealthy members of the elite wine collector group was expensive and Rudy started to see himself as a part of their world. With the additional money coming in from the advances he was able to play the part. But, in doing so he was spending large sums. The required restaurants, clothing and jewelry were very expensive.

Rudy now needed to generate large amounts from the auctions just to pay back the advances. By the end of the first auction in 2006, virtually all of the proceeds went back to Acker Merrall. That increased the importance of another auction. This one would be in October of 2006 and would be even larger than the one before. Again, most of the product put up for sale came from earlier purchases. …

Once the auction was set and wines committed, the advances started again. But as before, the money was gone by the time the auction took place, so the net proceeds left almost nothing.

Even though Rudy had sold thousands of bottles of wine for millions of dollars in 2007, he was short money. He did not want to ask his family for money. They had provided him with millions. He wanted his family to see him as being successful, and even able to repay some of what he had been given, so he looked to his new found ‘friends’ for loans. He secured the loans with bottles of wine, both real ones from his purchases and also those he created in his home. In addition, even though there was not a scheduled auction at that time, Acker Merrall continued to advance money in anticipation of a future auction. [!!] The difficulty was that most of the truly valuable wines that Rudy had purchased had either been sold or consumed at various events and tastings. It would take a long time to create enough bottles for an auction that would measure up to the earlier ones. During 2007 Rudy created and turned over to Acker Merrall wines for an auction that would take place in 2008. Much of 2007 went to creating and supplying those bottles and to spice up some private sales. In June of 2007 he made a sale to David Doyle. Many, but not all, of these bottles were created by Rudy

In addition to [a $3 million] loan from Fine Art Capital [in 2007], Rudy still owed millions of dollars to Acker Merrall for advances that they had made in anticipation of the upcoming auction and purchases he had made but not paid for. The advances were based primarily on bottles Rudy consigned during 2007. What he owed was further increased as interest, costs and fees, together with charges for more purchases, were added. [The court filing makes no mention of Rudy's liability to Acker for bottles rejected by buyers on which Acker had to make good. These ran into six or seven figures, as I recall from the indictment.] The auction was planned for April of 2008. A major focus of this auction would be 107 bottles of wine purportedly from Domaine Ponsot, however, many of these were reproductions

The Ponsot wines were problematic because some of the purported vintages could not have even existed. Laurent Ponsot, from Domaine Ponsot, questioned half of the bottles. The Ponsot wines were pulled from the auction and held, leaving Rudy unable to repay the sums he owed to Acker Merrall, and squarely in the negative spotlight. Acker Merrall and John Kapon started to distance themselves from him. The relationship soured, and Rudy, who acknowledged that he owed them money, agreed to the entry of a judgment against him in late 2008

….

After the 2008 failed auction, Rudy sold only limited amounts of wine, most of which was from his prior purchases. The debacle of the 2008 auction initially caused him to stop creating wines. Rudy still had friends and supporters, but most people did not want to deal with him. He was embarrassed by the many mistakes made with the Ponsot wines. The fact that he had the ability to faithfully recreate the taste of storied wines that he had actually tasted continued to nag at him [the burden of talent!], and he found himself once again working on a limited number of such recreations. During this period he engaged in some private sales

By 2011 he had a number of new bottles that had been produced. These, together with other wines that he had obtained from other sources over the years were consigned to auction in London. Prior to the auction, twelve lots of this wine were withdrawn by the auction house as being suspicious.
Last edited by John Morris on May 6th 2014, 2:21pm, edited 1 time in total.
"I have some sympathy for these people as I was once caught in a similar situation after using the wrong shampoo on a client's raccoon." -- Craig Gleason

"There is not an infinite linear progression of betterness associated with rising alcohol intake. There is an obvious asymptote, followed by a decline in betterness...." -- Anton Dotson
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6480  Postby Glenn Gallup » May 6th 2014, 12:31pm

If you can't dazzle 'em with facts baffle 'em with bucksnort.
I have taken more out of alcohol
John Dawson
 
Posts: 54
Joined: July 20th 2009, 11:06am
Location: USA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6481  Postby John Dawson » May 6th 2014, 4:18pm

In summary:

Factual Background:

- Rich kid realizes he has a knack for tasting wine
- Rich kid realizes knack for tasting wine will lead to friends and fortune
- Rich kid spends fortune on wine, makes many friends, but he's no longer rich
- No-longer-Rich kid realizes he must use his knack for tasting wine to exploit friends who will spend a fortune to buy his wine
- No-longer-Rich kid earns new fortune, enjoys renewed Rich-kid status
- Rich kid status proves temporary, undermined by obsession for Mont Blanc pens and chandeliers, once again no longer rich
- No-longer-Rich kid uses knack for tasting wine to exploit old and new friends who will spend their fortunes to buy his wine
- No-longer-Rich kid caught playing with stickers and magic markers, making "potions" in his kitchen, just like a 5-year old kid who makes "magic potions" for his friends.

Defense: No-longer-Rich kid was just playing with stickers and magic markers, making magic potions in his kitchen for his friends, who knew most of the potions weren't really magic anyway. Nonetheless, everybody like No-longer Rich kid's magic potions, they were lots of fun. This was just a game that this circle likes and can afford to play, irrespective of what was actually in the potions. No one threw up, no one got sick, everyone had a good old time.
User avatar
David Glasser
SubscriberSubscriber
 
Posts: 2177
Joined: August 16th 2009, 6:03pm
Location: Maryland

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6482  Postby David Glasser » May 6th 2014, 4:56pm

Pardon my naïveté, but is it legal for an auction house to arrange for a consignor or buyer to place bids on lots to be sure they meet reserve? Is it legal for an auction house to loan its own money or provide an advance for that purpose?
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6483  Postby Glenn Gallup » May 6th 2014, 5:36pm

I dunno David. I watch the car auctions and I get really suspicious when I see an employee of the auction house "on the phone with a bidder" and it just happens that the bidder in the house gets the car after the phone bidder backs out I wonder.
I have taken more out of alcohol
User avatar
Maureen Downey
 
Posts: 206
Joined: November 19th 2009, 1:42pm
Location: San Francisco

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6484  Postby Maureen Downey » May 6th 2014, 5:47pm

David Glasser wrote:Pardon my naïveté, but is it legal for an auction house to arrange for a consignor or buyer to place bids on lots to be sure they meet reserve?


No - a seller may not bid on - nor have an agent bid on the wines in his consignment on his own behalf.
That is clearly stated in every auction contract as it is law- so this is bizarre.... To be fair, auction houses retain the right to "buy in" any lots that go unsold,meaning they fail to meet the reserve price - but those wines must be reported as "passed" not sold.
Why would Rudy agree to "buy in" his wines at reserve to help the sale, and pay a 20% buyers premium plus taxes on them - as would have been legally required.... This statement may end up being a bit of a legal thorn in the side of the otherwise totally discredited Acker Merral & Condit auction house - not that many apologists seem to care....

That said - Acker apparently, from an ex-acker employee - caught Rudy bidding illegally on his own wines remotely (online & /or on the phone) early on - and did noting about it.... So why should any of this be a shock???
Last edited by Maureen Downey on May 6th 2014, 6:04pm, edited 2 times in total.
ChaiConsulting, WineFraud.com
User avatar
Maureen Downey
 
Posts: 206
Joined: November 19th 2009, 1:42pm
Location: San Francisco

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6485  Postby Maureen Downey » May 6th 2014, 6:02pm

John Dawson wrote:In summary:

Factual Background:

- Rich kid realizes he has a knack for tasting wine
- Rich kid realizes knack for tasting wine will lead to friends and fortune
- Rich kid spends fortune on wine, makes many friends, but he's no longer rich
- No-longer-Rich kid realizes he must use his knack for tasting wine to exploit friends who will spend a fortune to buy his wine
- No-longer-Rich kid earns new fortune, enjoys renewed Rich-kid status
- Rich kid status proves temporary, undermined by obsession for Mont Blanc pens and chandeliers, once again no longer rich
- No-longer-Rich kid uses knack for tasting wine to exploit old and new friends who will spend their fortunes to buy his wine
- No-longer-Rich kid caught playing with stickers and magic markers, making "potions" in his kitchen, just like a 5-year old kid who makes "magic potions" for his friends.

Defense: No-longer-Rich kid was just playing with stickers and magic markers, making magic potions in his kitchen for his friends, who knew most of the potions weren't really magic anyway. Nonetheless, everybody like No-longer Rich kid's magic potions, they were lots of fun. This was just a game that this circle likes and can afford to play, irrespective of what was actually in the potions. No one threw up, no one got sick, everyone had a good old time.


Jackdaw -
What is worse, is that those who have been defrauded/were part of the party remain fiercely in the camp that this logic is acceptable - as far as I can tell/am told.

I have spent several, LONG days catalogueing all the physical labels, pieces thereof and related evidence confiscated from Rudy's home... and bottles from the trial in the past week.

I have learned that despite OBVIOUS - CLEAR & UNDENIABLE evidence to the contrary, some of those that most profited from this fraud, including Robert Bohr, continue to insist that because 'the wines Rudy made tasted real' - the bottles their bottles must be 'real.' Because Bohr/Kapon/Rosania/Angry men and crew including alleged 'journalists' and critics who just wanted free/paid parties...had such LONG and extensive experience with these truly old and rare wines, which even the producers had not seen nor experienced until Rudy started his magic Cellar made in his "House of Wine Horrors." I am as perplexed as the feds at this level of denial. WHO BUYS THIS SHIT?

I can tell you that after looking at 60 bottles yesterday alone - almost all of which had Acker Merral Condit stickers - or THE CELLAR, or THE CELLAR II stickers or a combo thereof, John Kapon must have had a blind person, a willing patsy, a crook or a combo thereof vetting those wines for all those years. The glaringly obvious fakes would have been easily detectable to me in 2002. Some of the pixillation is visible to the naked eye on the DRC wines! They have no defense as far as my eyes are concerned!

That does not however- stop an apologist or worse.
Last edited by Maureen Downey on May 6th 2014, 6:14pm, edited 2 times in total.
ChaiConsulting, WineFraud.com
User avatar
Todd F r e n c h
Site AdminSite Admin
Head Babysitter
 
Posts: 33849
Joined: January 27th 2009, 9:46am
Location: San Clemente, CA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6486  Postby Todd F r e n c h » May 6th 2014, 6:08pm

Maureen Downey wrote:
I can tell you that after looking at 60 bottles yesterday alone - almost all of which had Acker Merral Condit stickers - or THE CELLER, or THE CELLAR II stickers or a combo thereof, John Kapon must have had a blind person, a willing patsy, a crook or a combo thereof vetting those wines. The glaringly obvious fakes would have been easily detectable to me in 2002. Some of the pixillation is visible to the naked eye. They have no defense as far as my eyes are concerned!

One must assume that the 'collectors' - those who actually PAY for the wines - never really looked at them, and just trusted Kapon, or his minions, to buy on their behalf, whatever super exciting bottles showed up. Such rich folk have little time to inspect wines so carefully, and rely on staff and assistants to work out little details like that.
Apparently I'm lazy, have a narrow agenda, and offer little in the way of content and substance (RMP) (and have a "penchant for gossip" -KBI)
User avatar
Maureen Downey
 
Posts: 206
Joined: November 19th 2009, 1:42pm
Location: San Francisco

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6487  Postby Maureen Downey » May 6th 2014, 6:38pm

Buyers have the right to expect that their sources of FINE & Rare wines have done due diligence. Despite the "Buyer Beware" clause at auction- blatant and purposeful lies, paying critics to legitimize collectors, collections and wines and other deceitful actions willfully partaken - as have been by Acker Merral & Condit should NOT be covered by "buyer beware." Fraud is fraud - the apologists can suck it, the info is out.

Retail buyers have NO buyer beware - and clients typically pay higher prices for the fact that they should have no questions about what they are getting, and that they they pay for is exactly what they purchase - no questions asked... But I digress.

Face reality gents: Mr Rosania, Mr Jaeger, Mr Greenberg, Mr Welland (probably because of) Mr Bohr & possibly his clients, Mr Lichtenberg, Mr DeVine, Mr Wender, Client(s) of wine consultant Brian Orcutt, like the FANTASTIC Mr Bill Koch (who already knows this!), & so many more misters I could name - you have all been sold fake wines directly from Rudy or via Acker Merral Condit. Yes - YOUR wine too, was/is fake. YOU were duped. So get made whole, and help the industry, like brave Mr Koch, and be man enough to admit you were duped and go after those that defrauded you! No one will hold it against you - unless you conyinue to pathetically make excuses....

The time for apologists is over. ESPECIALLY the man that MADE Rudy, John Kapon, but also Spectrum in their Rudy sale(s), any house that knowingly sold Rudy wines after he was known to be selling fakes - failed you in their professional duties. I understand that you do not want to deal with it. But you cannot continue to pretend you don't know - that there is just not enough info, or that you don't believe it. Unless - you live in a cave, still also truly believe in Santa, The Easter Bunny, and the Tooth Fairy in which place there is a small padded room and a comfee white jacket awaiting your distance from reality, it's time to face reality and help clean up this mess by holding those that lied to you accountable!

At minimum - admit the issue - and STOP apologizing/making excuses for those that have defrauded YOU.
ChaiConsulting, WineFraud.com
User avatar
David Glasser
SubscriberSubscriber
 
Posts: 2177
Joined: August 16th 2009, 6:03pm
Location: Maryland

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6488  Postby David Glasser » May 6th 2014, 10:16pm

Thanks for the detailed explanation Maureen. Bidding on your own stuff didn't sound right to me. Though I suppose it pales in comparison to his other crimes, it was part of Rudy's overall scheme to maintain frenzied interest in those wines. Acker gained as well by becoming the biggest auction house on the block (no pun intended).

As to the apologists, I tend to believe that the cognitive dissonance produced by the magnitude of the fraud/dollars butting up against the size of the egos involved has driven them to, or perhaps beyond, the brink of delusion.
John Dawson
 
Posts: 54
Joined: July 20th 2009, 11:06am
Location: USA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6489  Postby John Dawson » May 7th 2014, 12:35am

Moe D,

What would you do if you knew you spent $1M on fugazi wine that sits in your cellar? Some of the people who sold it to you don't have the funds to reimburse you. Other sellers who do have the funds won't pay up & will litigate your claim as a "bet the business" type of case all the way through an appeal if need be, the attorneys' fees for which will be more than your potential recovery. You could try to borrow against your collection, use it as collateral, but that just invites scrutiny at a time when this is all too fresh in our collective memory. Or, you can just move your wine to a trusted storage facility in London, and wait. Maybe 10 years from now, when all of this is old history to us and irrelevant noise to the label-chasing nouveau riche of a future emerging market, you can find some unsuspecting pen collector who wants any pre-Mitterand vintage of Burgundy, sight unseen.

If you have a working conscience, that approach is not an option. Instead, a better option would be to (i) identify other defrauded buyers from the same auction in which you bought your fugazi wine, & (ii) retain one law firm to represent you & the other buyers as separate plaintiffs in a single lawsuit against the appropriate defendant(s), & thereby split the cost of the attorneys' fees w/ the other plaintiffs in the same case.

I expect more developments and turns in the story in the near-term. And I suspect these developments will coincide with lawsuits and surprisingly quick settlements along the lines I described above.
User avatar
Bruce Leiser_owitz
SubscriberSubscriber
 
Posts: 10719
Joined: June 16th 2009, 12:54pm
Location: Los Angeles, CA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6490  Postby Bruce Leiser_owitz » May 7th 2014, 8:57am

Maureen Downey wrote:Face reality gents: Mr Rosania, Mr Jaeger, Mr Greenberg, Mr Welland (probably because of) Mr Bohr & possibly his clients, Mr Lichtenberg, Mr DeVine, Mr Wender, Client(s) of wine consultant Brian Orcutt, like the FANTASTIC Mr Bill Koch (who already knows this!), & so many more misters I could name - you have all been sold fake wines directly from Rudy or via Acker Merral Condit. Yes - YOUR wine too, was/is fake. YOU were duped. So get made whole, and help the industry, like brave Mr Koch, and be man enough to admit you were duped and go after those that defrauded you! No one will hold it against you - unless you conyinue to pathetically make excuses....


It seems obvious that people other than Mr. Koch ended up with fake wine. I don't have access to the info that you & Don have as to exactly who might have bought some of the fake wine, so I can't comment on the list you've mentioned. But one would imagine there are many other possible shoes that might drop.......

Of course, as already discussed at length earlier in the thread, we understand what Mr. Greenberg did when he realized that he had bought some fake wine.

Bruce
"Bruce you are correct."--Andrew Kaufman, 3/24/13.
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6491  Postby Glenn Gallup » May 7th 2014, 3:57pm

Bruce Leiser_owitz said

"Of course, as already discussed at length earlier in the thread, we understand what Mr. Greenberg did when he realized that he had bought some fake wine."

When the LBO guys were high, wide, and handsome it was called the greater fool theory. Didn't make any difference what you paid, someone would give you more later.
I have taken more out of alcohol
User avatar
David Glasser
SubscriberSubscriber
 
Posts: 2177
Joined: August 16th 2009, 6:03pm
Location: Maryland

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6492  Postby David Glasser » May 8th 2014, 3:11pm

Not Rudy, but I guess this fits in the "Global Wine Auction Fraud Thread"

http://www.bt.dk/danmark/vinfusk-for-mi ... e#slide-12

The caption translates as:

Of all the over 40 great wines by the couple proved to have been refilled and served several times, Petrus '70 is perhaps the most daring scam. Not because of the price but because the exact same bottle was served twice for Neal Martin. The first time in September 2012 by The White Clubs events in Basel, and in February 2013 he gets it back at the launch of his Pomerol-book. Besides being refilled, there is now also scratched a slightly larger hole in the top of the label, but the many other stains and marks testify fraud.

Here's the TN from Neal that appears to correspond to that tasting:

Wine Journal
Nov 2012 Neal Martin 99 Drink 2012 - 2030 $1708-$4505

Tasted at The White Club’s dinner in Basel. This was a brilliant performance from Pomerol’s most famous resident. Amazingly deep and lucid in colour and showing little sign of its age on the rim, the nose is immediately rivets you to the spot. Tightly wound aromas of blackcurrant pastilles, cold stones and Alpine streams, small dark cherries, terracotta and a hint of thyme. The palate is medium-bodied with perfect balance. It marries intensity with elegance like few others, a Petrus of volume and dimension, a Pandora’s box of delights. The tannins are melted and yet still provide a firm backbone, a deep foundation to this majestic wine that has an effortless quality to it. This is probably one of the finest bottles of Petrus I have encountered. Drink now-2030. Tasted September 2012.
Dan Collins
 
Posts: 101
Joined: March 21st 2012, 7:10pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6493  Postby Dan Collins » May 8th 2014, 4:55pm

John Morris wrote:I can't recall another case where having been raised in a gated community has been cited as a mitigating factor in sentencing.


True that. John.

I finally found time to sit down and read the letter from Kurniawan’s lawyers. My tears flowed so copiously that I shorted out three keyboards before finishing the grief-inducing document. To my mind, the narrative runs something like this: A poor little rich boy is inexorably dragged into the world of prostitution, er, fine wine … spiraling ever downward until he hits rock bottom: the high-end auction market. It was in these depths that the ingénue was stricken with a crippling addiction. (“It appeared that once he started bidding for a bottle he did not how to stop.”) This manic bidding for old and rare wines “put him head to head with other members of this rarified club of older wealthier men.”

Hmmm. The older wealthier men defense. If I read the facts of the letter correctly, the elderly plutocrats now in Rudy’s company ensnared the innocent young lad in their web of evil by loaning or advancing him millions of dollars. (The letter mentions in passing that Kurniawan received millions more from his wealthy family.)

As if getting millions in cash tossed his way wasn’t bad enough, Kurniawan was also stricken with celebrity addiction, though it seems Rudy contracted a very mild case of this disease since the only people so cited are Allen Meadows and Jackie Chan. Rudy, for example, recalls the night Chan stood on a chair and applauded him. (Without a trace of irony, the lawyers describe this as the” best night” of Rudy’s life.)

Let me get to the low point, or what was for me the low point of this letter: By now, Kurniawan realized that the auction market was awash in counterfeits. This bothered Rudy, but not in the way you might imagine. “He didn’t really mind the fake labels; what irritated was when he opened such a bottle and found the contents undrinkable. Rudy knew he could do better. He knew that he could faithfully reproduce not just the package, i.e., the bottle and all its accoutrements, but the contents – the taste of the wine within. It was a challenge, and he was up for it.”

So Rudy wasn’t a sleaze ball counterfeiter at all, but some kind of master craftsman. The bogus wines that came off the assembly line in the kitchen of his apartment are referred to in the letter as “reproductions” and “recreations.”

Though crafted by his lawyers, I think the letter accurately reflects Kurniawan’s state of mind. I think Rudy sees himself as a victim, and a very talented victim at that. And after 27 months in the slammer, I think Kuriawan still sees himself as the smartest guy in the room.
k s h i n
SubscriberSubscriber
 
Posts: 3039
Joined: August 17th 2009, 1:23pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6494  Postby k s h i n » May 8th 2014, 6:12pm

David Glasser wrote:Not Rudy, but I guess this fits in the "Global Wine Auction Fraud Thread"

http://www.bt.dk/danmark/vinfusk-for-mi ... e#slide-12

The caption translates as:

Of all the over 40 great wines by the couple proved to have been refilled and served several times, Petrus '70 is perhaps the most daring scam. Not because of the price but because the exact same bottle was served twice for Neal Martin. The first time in September 2012 by The White Clubs events in Basel, and in February 2013 he gets it back at the launch of his Pomerol-book. Besides being refilled, there is now also scratched a slightly larger hole in the top of the label, but the many other stains and marks testify fraud.

Here's the TN from Neal that appears to correspond to that tasting:

Wine Journal
Nov 2012 Neal Martin 99 Drink 2012 - 2030 $1708-$4505

Tasted at The White Club’s dinner in Basel. This was a brilliant performance from Pomerol’s most famous resident. Amazingly deep and lucid in colour and showing little sign of its age on the rim, the nose is immediately rivets you to the spot. Tightly wound aromas of blackcurrant pastilles, cold stones and Alpine streams, small dark cherries, terracotta and a hint of thyme. The palate is medium-bodied with perfect balance. It marries intensity with elegance like few others, a Petrus of volume and dimension, a Pandora’s box of delights. The tannins are melted and yet still provide a firm backbone, a deep foundation to this majestic wine that has an effortless quality to it. This is probably one of the finest bottles of Petrus I have encountered. Drink now-2030. Tasted September 2012.


This is why I was critical of the critics attending the mega tastings. I got grilled back then. There is nothing free in life. BTW, I believe Francois Adouze attended the DRC tasting organized by them but Francois can correct me if I am wrong.
Kevin
WvanGorp
 
Posts: 1471
Joined: April 19th 2009, 9:37am

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6495  Postby WvanGorp » May 8th 2014, 6:39pm

In retrospect, clear warning signs about tightly wound aromas and "Amazingly deep and lucid in colour and showing little sign of its age on the rim." Oops.
Wilfred van Gorp
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6496  Postby Glenn Gallup » May 8th 2014, 7:38pm

"Tightly wound aromas of blackcurrant pastilles, cold stones and Alpine streams, small dark cherries, terracotta and a hint of thyme. The palate is medium-bodied with perfect balance. It marries intensity with elegance like few others, a Petrus of volume and dimension, a Pandora’s box of delights. The tannins are melted and yet still provide a firm backbone"

That sound you hear is my bullshit detector.
I have taken more out of alcohol
User avatar
paul hanna
 
Posts: 4498
Joined: April 28th 2010, 10:14pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6497  Postby paul hanna » May 8th 2014, 8:30pm

deadhorse
John Morris wrote:There's some fascinating detail in the sentencing memo (pages 11-17) about Rudy's concoctions and Acker's role in egging him on. It alleges that Acker loaned him money to bid at the minimum to make it look like lots had sold when there wasn't a bona fide sale, and that Acker advanced him large sums even when there were no auctions of his wines scheduled.

The bolding is mine, as are the italicized comments:

As shown at trial, Rudy also engaged in the practice of reconditioning. He would acquire multiple bottles of particular wine with relatively low fill, then sacrifice a bottle’s contents to recondition the remaining bottles. He trusted that he could taste the open bottles and determine that the contents were in good condition before reconditioning and resealing. This was reflected at trial in the seven bottles of 1962 DRC purchased by Rudy and resold later as six, but with higher fill. The final product had been tampered with, had been adulterated in that what he did was not revealed, but properly contained the product that had been purchased. A bonus was that Rudy ended up with most of a bottle to enjoy himself.

In 2005, Rudy sold some of the wines he had purchased along with some that he had modified. [missing words in original] Acker Merrall a private sale to William Koch. Most of what was sold were bottles that had been purchased by Rudy in prior auctions. Not all of these were authentic; some bottles were refilled and/or replicated by Rudy.

Kapon began to urge Rudy to put together a large collection of wines from his collection and cellar (many of the wines purchased by Rudy at Acker Merrall’s auctions were still in the hands of Acker Merrall and easily available.) Rudy agreed and provided wine for two large auctions in 2006. Approximately 14,000 bottles of wine were put up for auction at these two events. The great majority of which had been previously purchased by Rudy. These included many vintages from Italy, Australia, Germany and the United States in addition to the Burgundy and Bordeaux offerings. At the request of John Kapon, Rudy started to ‘price’ support Acker Merrall by agreeing to buy wines at the reserve price when bidding fell short. The charges would be placed on his ‘account’ and the wines held by Acker Merrall.

By this time Rudy had collected the materials necessary to reproduce authentic looking bottles. He had a printer in Indonesia who created authentic reproductions of labels and stickers. Rudy also ordered stamps and authentic wax to mark and seal the bottles from other vendor.

All of the reproduction bottles that Rudy created were carefully created by his own hand in the kitchen of his home in Los Angeles. As shown by the evidence at trial, two or three bottles at a time would be soaked in the sink to remove the old labels. Then the new labels and appropriate stickers were carefully applied. Only after all of this was done and a proper looking bottle created would the bottle be filled with a mixture of other wines that would match, as close as possible, the taste of the vintage that was proclaimed by the label. This was slow, meticulous work. Working alone, Rudy created, filled and corked only a relatively small number of bottles. But, for the most part, they were very special wines. Rudy was able to produce bottles only when he was actually physically present in Arcadia, and then only when not attending to other business. Still, he was able over the years to create hundreds of bottles. There were few at first, but more later when pressure from Acker Merrall increased.

Starting in 2006, a part of the allure for Rudy to participate in the auctions and to have increasingly valuable submissions was in the form of advances made by Acker Merrall to Rudy. After Kapon valued Rudy’s proposed list of wines for the auction, he then made advance payments to Rudy. This quickly became millions of dollars. Trying to keep up with the very wealthy members of the elite wine collector group was expensive and Rudy started to see himself as a part of their world. With the additional money coming in from the advances he was able to play the part. But, in doing so he was spending large sums. The required restaurants, clothing and jewelry were very expensive.

Rudy now needed to generate large amounts from the auctions just to pay back the advances. By the end of the first auction in 2006, virtually all of the proceeds went back to Acker Merrall. That increased the importance of another auction. This one would be in October of 2006 and would be even larger than the one before. Again, most of the product put up for sale came from earlier purchases. …

Once the auction was set and wines committed, the advances started again. But as before, the money was gone by the time the auction took place, so the net proceeds left almost nothing.

Even though Rudy had sold thousands of bottles of wine for millions of dollars in 2007, he was short money. He did not want to ask his family for money. They had provided him with millions. He wanted his family to see him as being successful, and even able to repay some of what he had been given, so he looked to his new found ‘friends’ for loans. He secured the loans with bottles of wine, both real ones from his purchases and also those he created in his home. In addition, even though there was not a scheduled auction at that time, Acker Merrall continued to advance money in anticipation of a future auction. [!!] The difficulty was that most of the truly valuable wines that Rudy had purchased had either been sold or consumed at various events and tastings. It would take a long time to create enough bottles for an auction that would measure up to the earlier ones. During 2007 Rudy created and turned over to Acker Merrall wines for an auction that would take place in 2008. Much of 2007 went to creating and supplying those bottles and to spice up some private sales. In June of 2007 he made a sale to David Doyle. Many, but not all, of these bottles were created by Rudy

In addition to [a $3 million] loan from Fine Art Capital [in 2007], Rudy still owed millions of dollars to Acker Merrall for advances that they had made in anticipation of the upcoming auction and purchases he had made but not paid for. The advances were based primarily on bottles Rudy consigned during 2007. What he owed was further increased as interest, costs and fees, together with charges for more purchases, were added. [The court filing makes no mention of Rudy's liability to Acker for bottles rejected by buyers on which Acker had to make good. These ran into six or seven figures, as I recall from the indictment.] The auction was planned for April of 2008. A major focus of this auction would be 107 bottles of wine purportedly from Domaine Ponsot, however, many of these were reproductions

The Ponsot wines were problematic because some of the purported vintages could not have even existed. Laurent Ponsot, from Domaine Ponsot, questioned half of the bottles. The Ponsot wines were pulled from the auction and held, leaving Rudy unable to repay the sums he owed to Acker Merrall, and squarely in the negative spotlight. Acker Merrall and John Kapon started to distance themselves from him. The relationship soured, and Rudy, who acknowledged that he owed them money, agreed to the entry of a judgment against him in late 2008

….

After the 2008 failed auction, Rudy sold only limited amounts of wine, most of which was from his prior purchases. The debacle of the 2008 auction initially caused him to stop creating wines. Rudy still had friends and supporters, but most people did not want to deal with him. He was embarrassed by the many mistakes made with the Ponsot wines. The fact that he had the ability to faithfully recreate the taste of storied wines that he had actually tasted continued to nag at him [the burden of talent!], and he found himself once again working on a limited number of such recreations. During this period he engaged in some private sales

By 2011 he had a number of new bottles that had been produced. These, together with other wines that he had obtained from other sources over the years were consigned to auction in London. Prior to the auction, twelve lots of this wine were withdrawn by the auction house as being suspicious.


Once again I am simply amazed that Acker is still in business....Something just so very wrong with that.
steve goldun
SubscriberSubscriber
 
Posts: 77
Joined: October 7th 2009, 10:12am
Location: Los Angeles

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6498  Postby steve goldun » May 9th 2014, 1:34am

Once again I am simply amazed that Acker is still in business....Something just so very wrong with that.


That's sort of understandable. What's even even more wrong, and amazing, is that Rudy is still in business.
Steve Goldun
Los Angeles
ITB
User avatar
Kevin Sidders
SubscriberSubscriber
 
Posts: 294
Joined: May 2nd 2011, 11:53am
Location: Charlottesville, VA

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6499  Postby Kevin Sidders » May 9th 2014, 6:05am

David Glasser wrote:Not Rudy, but I guess this fits in the "Global Wine Auction Fraud Thread"

http://www.bt.dk/danmark/vinfusk-for-mi ... e#slide-12

The caption translates as:

Of all the over 40 great wines by the couple proved to have been refilled and served several times, Petrus '70 is perhaps the most daring scam. Not because of the price but because the exact same bottle was served twice for Neal Martin. The first time in September 2012 by The White Clubs events in Basel, and in February 2013 he gets it back at the launch of his Pomerol-book. Besides being refilled, there is now also scratched a slightly larger hole in the top of the label, but the many other stains and marks testify fraud.

Here's the TN from Neal that appears to correspond to that tasting:

Wine Journal
Nov 2012 Neal Martin 99 Drink 2012 - 2030 $1708-$4505

Tasted at The White Club’s dinner in Basel. This was a brilliant performance from Pomerol’s most famous resident. Amazingly deep and lucid in colour and showing little sign of its age on the rim, the nose is immediately rivets you to the spot. Tightly wound aromas of blackcurrant pastilles, cold stones and Alpine streams, small dark cherries, terracotta and a hint of thyme. The palate is medium-bodied with perfect balance. It marries intensity with elegance like few others, a Petrus of volume and dimension, a Pandora’s box of delights. The tannins are melted and yet still provide a firm backbone, a deep foundation to this majestic wine that has an effortless quality to it. This is probably one of the finest bottles of Petrus I have encountered. Drink now-2030. Tasted September 2012.


David -- great link! That's a fascinating slide presentation and only serves to further show how widespread the wine forgery game is. I suspect that Hardy, Rudy and these characters are only the tip of an iceberg that's MUCH larger than most wine fans and trade participants are willing to admit...
VinConnect (ITB)
Mailing lists for top European wineries
User avatar
Glenn Gallup
 
Posts: 203
Joined: March 12th 2012, 3:37pm

RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

Post #6500  Postby Glenn Gallup » May 9th 2014, 7:20am

Was it ever thus. In James Thurber' collection of essays and cartoons "The Thurber Carnival" there is one cartoon relevant to wine. Two couples are hoisting glasses and the host proclaims "It's only a naive little domestic Burgundy but I think you'll be amused by its presumption" when you hear that crap run for the hills.
I have taken more out of alcohol

Return to Wine Talk

logo
Food Advertising by