RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

[Graeme_Gee]

@Regan McCaffery

Some interesting info here from the WS article no one else has mentioned.


"Geoffrey Troy, head of New York Wine Warehouse, also sounded a warning about the sale. Last July, Troy inspected a collection of DRC wines for a prospective buyer that were being stored in a Bronx temperature-controlled facility. At the inspection, the seller was represented by Brierley. One of the wines inspected, a magnum of Romanée-Conti 1971, was stamped with serial number 0048.

In the London auction catalog, a single magnum of the same wine (lot 100) is also identified as having serial number 0048. In an e-mail to Brierley the week before the sale, obtained by Wine Spectator, Troy asked if the Spectrum bottle was the same as the one inspected in the Bronx. Without answering the question directly, Brierley replied that “at the very least lot 100 will be withdrawn.” That was done. Troy says he learned that the magnum he inspected is still in the hands of his client, raising the question: How many magnums are stamped with number 0048? "

Of course, with enough fakes around, this could become a sought-after wine in its own right - if it’s any good.
“Hi, have you got any 71 Romanee Conti magnum 0048 for sale?”
“Yup, sure, two cases of that - 12 bottles all up - but I know where I can get another three…”
cheers,
GG

[JonoBeagle]

Whilst I agree with Rob’s feelings of negativity and distaste for mudslinging, especially when his own name is brought into it… I do feel that his post comes across as being “who cares, enjoy the beauty”… As someone who has dealt with antiques from birth and now with wine, fakes can be beautiful but they are still “fakes”; faking has happened for millennia, and it will continue to happen. The reason is because the pay-offs are good.

At an auction, I will be criticising and inspecting every aspect, especially if I Contemplate buying, but still if not…

And I agree that faking is not just at the top level. $10 BX is faked fro the Chinese markets, and I have been offered fakes whilst working in retail.

87 Lafite mag before the boom.
85 Langoa
82 Cos to name but three.

They were pretty good fakes but they just felt wrong and I refused.

However if someone says “I believe it real, let’s open it”, and everyone scoffs… That is just plain rude and I would question drinking with those people again. And I have almost been the brunt of something like this and went to a lot of trouble to prove the bottles were genuine. We drank the bottles as enjoyed them so “lay off” is my opinion…

This situation is very different in this case.

\

I am here: Google Maps

[Anthony_Hall]

Anybody been naughty enough to add the montrachets from the auction to the oxidised burgs wiki ?

[billnanson]

@Nick Ryan

Berry, nobody’s going to bother faking 99.99% of the stuff either of us buy yearly. If the super-rich are happy about selling fakes to each other and pretending they’re drinking 80-year old juice in bacchanal wine orgies, I say great, it keeps their money out of competition with ours.

Not so, unfortunately Nick, not unless neither of you would consider buying Pouilly! There was a case on the UK wine-pages forum last year where a batch of bogus Jadot Pouilly-Fuissé turned up at retail - poor labels for sure - but don’t for a moment assume it is only a certain segment of the market that will sustain fakes.

And let’s be clear, for this issue has not even been discussed (I think): If you are faking, you don’t give jack shit what’s in the bottle - so why could it not be something that is bad for your health? Just look at what turned up in Chinese baby powder in the last years. I expect this is more of an issue at the Pouilly end of the market (cheap!) but just a little something to keep in mind!

[Brian_G_r_a_f_s_t_r_o_m]

Let’s please all remember that Don approached Spectrum with his concerns privately before posting anything in a public forum. Spectrum had a chance to do the right thing, and keep all of this behind-the-scenes — where all the “gentlemen” hang out, I guess; Spectrum brazenly opted to ignore Don and his concerns, and decided to move forward with the auction.

As far as Spectrum’s involvement in this ordeal is concerned, this is about a lot more than a failure to exercise due diligence. In a macro sort of way, I view Spectrum’s behavior here as two-parted: (1) what they did before Don reached-out to them, and (2) what they did after Don reached-out to them.

[Tom_Mann]

@Nick Ryan

Berry, nobody’s going to bother faking 99.99% of the stuff either of us buy yearly.

Fake Jacob's Creek wine seized in off licences

(PS I’m not accusing anyone of buying this, btw, but it’s definitely not just high-end stuff that gets faked!)

[Peter_Chiu]

@todd waldmann

@mike pobega

@Peter Chiu

Welcome to the Board , Rob.

Nice to see you here.

Quoted post of the year!

Todd…like I had said …people always will have difference in opinion; but politeness and courteousness should always be bestowed. It was Rob first post.

Should we show him our welcome as a community ? I always do that when I see someone who posts his first post here to make the person more comfortable to join our wine community. Guess this is the less we ( as a communit ) should to do and hope you do not mind … …

[Gavin_Monery]

I agree with a lot of Rob’s sentiments. Unfortunately the fact is we’re not talking about the odd bottle (however grand) that has been brought to a dinner party but an abject failure by someone in the trade to correctly authenticate wines worth hundreds of thousands of pounds. Suspect bottles simply cannot be legitamised by merchants for the sake of profit. It’s not fair on consumers and it’s not fair on other traders, most of whom go to great lengths to authenticate wines, often incurring higher costs and paying higher prices as a result.

Of course provenance cannot always be proven and some wines have been though an awful lot of hands during their lifetimes. Obviously traders do not want to give up every supplier in their chain, and nor should they be expected to. What they can be expected to do is to make every effort to ensure eveything they sell is what they say it is. If it’s not possible to authenticate a wine or it’s storage conditions then the wine customer should be told the full story, at which point they can make their own decision as to the level of risk they are comfortable with.

[Bruce_Leiser_owitz]

@Gavin Monery

I agree with a lot of Rob’s sentiments. Unfortunately the fact is we’re not talking about the odd bottle (however grand) that has been brought to a dinner party but an abject failure by someone in the trade to correctly authenticate wines worth hundreds of thousands of pounds. Suspect bottles simply cannot be legitamised by merchants for the sake of profit. It’s not fair on consumers and it’s not fair on other traders, most of whom go to great lengths to authenticate wines, often incurring higher costs and paying higher prices as a result.

Of course provenance cannot always be proven and some wines have been though an awful lot of hands during their lifetimes. Obviously traders do not want to give up every supplier in their chain, and nor should they be expected to. What they can be expected to do is to make every effort to ensure eveything they sell is what they say it is. If it’s not possible to authenticate a wine or it’s storage conditions then the wine customer should be told the full story, at which point they can make their own decision as to the level of risk they are comfortable with.

Yes, and ONE of the reasons the lack of provenance information is so prominent here is you don’t know how many times these bottles have traded hands. Let’s assume you are interested in bidding on something like the 1945 DRC RC. Whether you want to buy the bottle, and at what price, is going to be influenced by whether it has had 3 owners or 30 owners. Remember, provenance is relevant to storage conditions as well as authenticity.

In any event, given the whole history of this affair, it seems a strong possibility that we are well beyond the issue of merely negligent efforts to authenticate a few bottles.

Bruce

[Peter_Kleban]

@Bruce Leiserowitz

@Lewis Dawson

@Berry Crawford

Its not just DRCs that get faked. And its not just auctions that have fake wines.

I think this is a very good point, and often overlooked by folks who buy past vintages of wines not at the '45 Romanee Conti level, but mucher lower down the food chain. At the very least, auction houses are geared up to check the wines. They have far nore expertise in this, even if not always being diligent enough. Re-seller wine merchants are even more easily duped, I would think. Not to mention private auction websites that hook up buyers and sellers, such as eBay, Winecommune, Vinfolio, etc. Scary.

Indeed. Many of my retail friends have stories of collectors offering to sell them wine or consign them wine where the wine turned out to be questionable at best upon inspection.

While the payoff for counterfeiting something like 1945 DRC RC is quite high, counterfeiting wine occurs at various levels. Even at the rather low end:

Fake Jacob's Creek wine seized in off licences - BBC News

Bruce

The bottles appear identical to the real thing, apart from a tell-tale misspelling on the label on the back, where Australia is spelt Austrlia.

And this for a wine that sells for $16. Guess we better read labels pretty carefully in future.

[steffenpelz]

@Nick Ryan

Berry, nobody’s going to bother faking 99.99% of the stuff either of us buy yearly. If the super-rich are happy about selling fakes to each other and pretending they’re drinking 80-year old juice in bacchanal wine orgies, I say great, it keeps their money out of competition with ours.

Except for that’s not how it works. If prices escalate dramatically at the high end, it forces prices underneath it to escalate as well. Don’t believe me? Take a look at the price increases of Bordeaux and Burgundy over the last few years…And I’m not talking bout DRC and Latour…even stuff like Magdelaine (St. Emilion) and Premier Crus from middling producers have significantly increased in price.

If you don’t think that has at least a little bit to do with the ever escalating hammer prices in those two categories, then I don’t know what to say. Now…it is arguable that if Rob bought those PremierCrus or middle of the pack Bordeaux, that the prices might be higher even…agreed to that extent…but I can’t agree that their buying behavior is entirely isolated from the cost of the stuff we buy…

[Don_Cornwell]

Adam Brett-Smith of Corney & Barrow asked me to publish a partial correction on some statements I made in Post 683 regarding Corney & Barrow’s conversations with Mr. Brierley. With Adam’s permission, I’m including his complete email to me. In many ways it is an even more telling indictment of Spectrum and Vanquish.

Dear Don (if I may)

Good to speak to you earlier this week. I’ve just read Post 683 on Wineberserkers.com and wanted to correct some factual errors that both the Domaine and C&B consider important.

Specifically you say:

‘There are additional facts which have not yet come out. Yesterday, Corney & Barrow requested that Mr Brierley withdraw all of the DRC lots. He declined and insisted that they were bringing in a third party to re-inspect the wines. After Spectrum/Vanquish declined Corney & Barrow’s request, the warning letters went out from Corney & Barrow and Wilson Daniels. My sincere thanks to both firms for taking the unprecedented step (in these firm’s histories) of warning their customers and the public of potentially incipient fraud’

Factually, Corney & Barrow did not request any withdrawal of lots. Having made our position and the Domaine’s position clear on authentication. I did write to Mr Brierley on the Domaine’s behalf to say that the Domaine had asked me to inform him that your remarks concerning the accents on the labels appeared – as far as the Domaine was able to confirm – to be accurate. Therefore the Domaine was very concerned about this sale and relied on Mr Brierley to take the appropriate decisions.

This was on the 6th February.

I wrote again on the 7th February requesting from Mr Brierley his conclusions from his further reviews of the stock by a ‘highly experienced independent third party’ and what recommendations had been made by same. I requested his updates on the situation and news of his further decisions as to whether he proposed withdrawing some or all of the DRC lots under review.

I also said that we needed to be able to advise our UK customers today (7th February) on the above.

In the absence of a response to Corney & Barrow we sent out a release – agreed with and approved by the Domaine - to our customers (I believe you have a copy, if not I can send it to you) which was also posted on our website and subsequently to the Press. A similar release was sent by Wilson Daniels.

It would probably be best to post these amendments and in the interests of factual accuracy and to head off any malevolent interpretation by third parties! –.

Finally, and this is a matter of interpretation, there is the distinct impression that no lots were withdrawn at all! As you know, and thanks to your efforts a very large number were.

I should add that the Domaine and Aubert de Villaine in particular have been incredibly proactive and supportive throughout this whole sorry affair.

I personally look forward to meeting you and congratulating you on an incredible body of work.

Best,

Adam.

Adam Brett-Smith
Corney & Barrow Ltd
1 Thomas More Street | London | E1W 1YZ

[Peter_Kleban]

@Don Cornwell

[snip]
Finally, and this is a matter of interpretation, there is the distinct impression that no lots were withdrawn at all! As you know, and thanks to your efforts a very large number were.

I should add that the Domaine and Aubert de Villaine in particular have been incredibly proactive and supportive throughout this whole sorry affair.

I personally look forward to meeting you and congratulating you on an incredible body of work.

Best,

Adam.

Adam Brett-Smith
Corney & Barrow Ltd
1 Thomas More Street | London | E1W 1YZ

Bravo, Don! I hope that you are not too busy to feel some satisfaction. And Bravo WB, for providing a forum where this could happen.

[todd_waldmann]

On a side note: If you were going to go to all the trouble of faking a bottle of high-end wine by making sure the capsules looked appropriate, the label was “aged”, the wine was of an expected color, the bottle was the right style, how much more work would it take to make sure spelling & accents were accurate? I mean, seriously?

[SteveC]

Kudos on your efforts and recognition Don.

Beserkers, join me as I sing

For Don’s a jolly good fellow, for Don’s a jolly good fellow
For Don’s a jolly good fellow (pause), which nobody can deny
Which nobody can deny, which nobody can deny
For Don’s a jolly good fellow, for Don’s a jolly good fellow
For Don’s a jolly good fellow (pause), which nobody can deny!

[ToddFrench]

@SteveC

Kudos on your efforts and recognition Don.

Beserkers, join me as I sing

For Don’s a jolly good fellow, for Don’s a jolly good fellow
For Don’s a jolly good fellow (pause), which nobody can deny
Which nobody can deny, which nobody can deny
For Don’s a jolly good fellow, for Don’s a jolly good fellow
For Don’s a jolly good fellow (pause), which nobody can deny!

This is where Daniel McIntosh and I get out our cellos and rock out in accompaniment

[Don_Cornwell]

@Peter Kleban

Bravo, Don! I hope that you are not too busy to feel some satisfaction. And Bravo WB, for providing a forum where this could happen.

Peter:

Thank you. I feel only modest satisfaction because my primary goal was to force Spectrum and Vanquish to withdraw all of the Rudy Kurniawan/Antonio Castanos wines.

Spectrum’s failure to reveal Mr. Kurniawan’s known involvement in this sale was an obvious attempt to defraud prospective purchasers in my opinion. Fraud occurs not only by affirmative misrepresentations but also by failure to disclose facts known to the seller which would be material to the buying decision. While Rob Rosania is right that Rudy has not (yet) been found guilty of fraud, it was well known, even before this auction, that at least two wineries had previosly intervened to request that wines he consigned in other auctions be withdrawn because the wines were believed by the domaines to be counterfeit. It was also well known that Rudy had been the consignor on millions of dollars worth of wine in the Cellar I and Cellar II auctions which the purchasers returned based on authenticity issues. Those facts, standing alone, would require ANY auction house to either completely avoid doing business with Mr. Kurniawan, as most do, or, at an absolute minimum, to clearly and unequivocally disclose his identity as the owner of the wines before attempting to sell them. My attempt to warn the wine-buying public, while it certainly had an impact, failed to reach everyone.

I’m very honored and pleased that DRC took the step of saying that my work was correct and that as a result of it “the Domaine was very concerned about this sale and relied on Mr Brierley to take the appropriate decisions.” Here again, DRC, like most of the rest of us, expected that Spectrum and Vanquish, once confronted with clear evidence of serious authenticty issues, would “do the right thing.” But they didn’t. They didn’t even withdraw all of the lots about which I had raised specific authenticity issues and they sold other bottles which I hadn’t mentioned that had the identical problems (e.g. Lot 95 with the same misspelling on the Percy Fox strip label.)

Spectrum and Vanquish and Christies (when they failed to stop the sale of the Kurniawan wines in October-November 2009) have rather amply demonstrated that the auction houses cannot be trusted to regulate themselves. No matter how ethical a few auction houses like Sotheby’s may be, there are a few who insist on spoiling it for everybody else. To me it is time for a lot more governmental regulation of the wine auction industry. That includes both more active involvement of law enforcement personnel to enforce existing criminal fraud statutes, and it includes finally taking steps to regulate the auction industry with legislation. It is astonishing when you look at the laws of the States of New York and California. There are virtually no laws of any kind dealing with wine auctions.

It’s beyond clear to me, for example, that the practice of allowing anonymous auction sales has to end. A rule requring disclosure of the true owner’s name and imposing criminal and civil penalties for failure to do so, would have many positive effects, though I’m sure some auction houses will howl at that proposal. For those who will say they don’t want to have their names disclosed when they sell their property – too bad. If you don’t want your name revealed, you shouldn’t be allowed to sell your wine through a public market. Similarly, complete liability disclaimers for wines that are not what they purport to be on the label needs to be legislatively outlawed. In my view there ought to be strict “product” liablity for selling wine that’s misdescribed, but perhaps with the remedy limited to return of the purchase price plus interest. That’s the only rule which will properly incentivize the trade to conduct proper due diligence in the first place. There are doubtlessly other reforms which would be appropriate.

[k_s_h_i_n]

@Don Cornwell

Spectrum and Vanquish and Christies (when they failed to stop the sale of the Kurniawan wines in October-November 2009) have rather amply demonstrated that the auction houses cannot be trusted to regulate themselves. No matter how ethical a few auction houses like Sotheby’s may be, there are a few who insist on spoiling it for everybody else. To me it is time for a lot more governmental regulation of the wine auction industry. That includes both more active involvement of law enforcement personnel to enforce existing criminal fraud statutes, and it includes finally taking steps to regulate the auction industry with legislation. It is astonishing when you look at the laws of the States of New York and California. There are virtually no laws of any kind dealing with wine auctions.

It’s beyond clear to me, for example, that the practice of allowing anonymous auction sales has to end. A rule requring disclosure of the true owner’s name and imposing criminal and civil penalties for failure to do so, would have many positive effects, though I’m sure some auction houses will howl at that proposal. For those who will say they don’t want to have their names disclosed when they sell their property – too bad. If you don’t want your name revealed, you shouldn’t be allowed to sell your wine through a public market. Similarly, complete liability disclaimers for wines that are not what they purport to be on the label needs to be legislatively outlawed. In my view there ought to be strict “product” liablity for selling wine that’s misdescribed, but perhaps with the remedy limited to return of the purchase price plus interest. That’s the only rule which will properly incentivize the trade to conduct proper due diligence in the first place. There are doubtlessly other reforms which would be appropriate.

I applaud your effort but in the overall scheme, this is a game of extremely privileged and the government’s resource can be better utilized somewhere else. Also it seems very difficult to prove this type of crimes as evident by the results of Mr. Koch numerous lawsuits. I really appreciate all your efforts as I was tempted to be on a few lots prior to reading your posts. I hope you continue your incredible work!

[Barry_P]

Don:

Agreed. In full.

[D_Jorgenson]

Don, it’s good to see your efforts receive explicit and public recognition from DRC.

Kevin, I understand your concern re government involvement but I agree with earlier points in this thread that the issue of counterfeit wines is not isolated to the very top of the value spectrum, and even if it were, that pricing activity at te top does have an economic effect on the rest of the market. It seems to me that additional transparency in the wine auction marketplace might benefit all of us in at least some small way.