RUDY KURNIAWAN & GLOBAL WINE AUCTION FRAUD THREAD (MERGED)

WINE TALK
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FUGITIVE STEPHEN BURTON OF BORDEAUX WINE CELLARS EXTRADITED TO US TO FACE CRIMINAL CHARGES IN EASTERN DISTRICT OF NEW YORK

In March of 2022 I wrote an extensive post with details about the indictment filed by the Department of Justice in the Eastern District of New York concerning Bordeaux Wine Cellars, and its two principals, Stephen Burton and Andrew James Fuller (a/k/a James Wellesley). https:/www.wineberserkers.com/t/rudy-kurniawan-global-wine-auction-fraud-thread-merged/56614/9207?u=don_cornwell+

Bordeaux Wine Cellars was a massive wine Ponzi scheme headquartered in London which targeted wealthy investors by offering extraordinary rates of return (as high as 12%) by purchasing “wine loans” that had allegedly been made by Bordeaux Wine Cellars to wealthy wine collectors (at alleged 15% interest rates). Bordeaux Wine Cellars claimed to be in the wine brokerage business. The Ponzi scheme, which began operating as early as 2011, started to collapse in late 2018. According to the indictment filed by the US government on February 28, 2022, from June of 2017 through February of 2019, Bordeaux Cellars and its principals “induced investors to invest in excess of approximately $99.4 million into Term Loans.” The indictment alleges multiple counts of wire fraud, conspiracy to commit wire fraud and money laundering.

Stephen Burton, whose aliases included “Andrew Pittman,” “Robert Allison” and “Derek Campbell”, was the founder and Chief Executive Officer of Bordeaux Cellars. Both Burton and Fuller resided in Tunbridge Wells (Kent) in the UK.

As those of you who saw my original post may recall, both Burton and Fuller have histories of fleeing the UK in response to criminal charges. Fuller had been previously charged with criminal fraud with respect to a fraudulent real estate development loan. He fled the UK to avoid prosecution (secretly residing in Singapore), only to be later caught sneaking back to visit his wife under a false name. Fuller was eventually sentenced to six years and three months in prison. According to the a UK wine trade friend of mine, Fuller was released early from prison in 2016, and he then resumed working for Bordeaux Cellars at that time as its CFO and Operations Manager under the alias “James Wellesley.”

In late 2018 or early 2019, after the Ponzi scheme collapsed, Andrew Fuller (a/k/a James Wellesley) once again fled the UK fearing imminent arrest. He was arrested in the UK on February 4, 2022 (details of his absence from and reentry into the UK are unknown to me at this time). The US government filed the criminal charges against Burton and Fuller on February 28, 2022 and formally requested Fuller/Wellesley’s extradition, which he has been vigorously fighting ever since.

In Burton’s case, after collapse of Bordeaux Wine Cellars he also tried to flee the UK to avoid prosecution. On February 14, 2019, the police went to a hotel in Kent England on a tip that Stephen Burton was there. When they got there they found him – along with two fake passports, and almost a million pounds worth of currency, gold bars, Kruggerands and some high-end collector watches. [https://www.kentlive.news/news/kent-new%20…%20nd-3294848]. Burton was charged in the UK with counts for money laundering and the fake passports, plead guilty to both, and was sentenced to four years in prison for those crimes on September 6, 2019. He was not charged (at that time) with any conduct relating to Bordeaux Wine Cellars.

At some point in the fall of 2020, after the FBI had commenced an active investigation concerning Bordeaux Wine Cellars, and was cooperating with the Serious Frauds Unit in the UK, Stephen Burton was released early from prison (apparently a compassionate release of prisoners due to Covid) with no advance notice to the FBI. He immediately fled the country and the FBI began actively trying to locate and arrest him (as mentioned in my March 2022 post).

According to a press release issued by the Department of Justice on Saturday December 16, 2023, Burton was arrested in Morocco in 2022 after entering the country using a false Zimbabwean passport. The Justice Department’s Office of International Affairs provided significant assistance in securing Burton’s arrest and his eventual extradition from Morocco. On Saturday December 16, 2023, Burton was arraigned in federal court in Brooklyn on the charges set forth in the indictment.

Breon Peace, the United States Attorney for the Eastern District of New York, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the extradition and arraignment on Saturday. Mr. Peace stated that “With the successful extradition of Burton to the Eastern District of New York, [Burton] will now taste justice for the fine wines scheme alleged in the indictment. This prosecution sends a message to all perpetrators of global fraud that you can run from law enforcement, but not forever.”

Stephen Burton UK
Booking photo of Stephen Burton from his 2019 arrest and a photo of some of the gold and gold coins seized at that time.

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There is an interesting section in the linked article on how AI and gas chromatography can be used to combat wine fraud.

Fighting Fraud and Adapting to a Changing Climate

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While the article is interesting reading, the suggestion that this may be a tool for criminal prosecutions for counterfeit wine is considerably embellished at best. There are also significant unresolved questions with what this data really tells you (or doesn’t).

At the outset, the ability to directly compare one wine with another using some type of spectroscopy analysis has been around for more than 20 years. There have been references to at least two prior articles in this thread about using spectroscopy for this purpose.

The fundamental problem of proving a wine is counterfeit by the direct chemical comparison method is that it involves destructive testing of both the original wine and the alleged counterfeit. This requires the cooperation (and bottles of the original wine(s) in question) from the wineries involved. There are problems here. First, many wineries simply do not want the adverse publicity they perceive will be associated with an acknowledgment that people are selling counterfeit versions of their wine. Second, if the wines in question are allegedly quite old and rare, the winery may either not have bottles available or may be unwilling to provide such bottles for destructive testing. Third, generally speaking, a prosecutor is not going submit the only bottle of some allegedly counterfeit wine to destructive testing before trial, even if the defendant’s counsel and expert are available when such testing/comparison takes place.

From a practical perspective, the only types of criminal cases in which direct comparison testing would be plausible would be where there is relatively large-scale counterfeiting of a single wine of a relatively recent vintage (e.g. the counterfeit Sassicaia from a few years ago.) Again, the aversion to perceived adverse publicity from acknowledging the existence of counterfeits kicks in here.

Is there any way to do this non-destructively? The most interesting article I read about wine and spectroscopy talked about a method that would supposedly use a type of laser light to go through the bottle and reveal the spectrographic fingerprint without the necessity to open the bottle. That article never discussed the issue of whether passing laser light through the bottle damaged the remaining contents. A friend in the trade was very seriously interested in this for the purpose of investment. But I never heard any more about it after the initial article.

What, if anything, does this really show? While the article demonstrates that the differences in the vineyards from wines produced in the six different appellations in Bordeaux selected can be consistently distinguished from one another over multiple samples and multiple vintages, it does not tell you what you would really need/want to use this as a forensic tool – even for Bordeaux. Can this method consistently detect the difference between say Chateau Haut Brion, La Mission Haut Brion and Latour Haut Brion? Or between any of those wines and their down-the-road neighbor Chateau Pape Clement? In other words, is it really a fingerprinting tool for the individual vineyard? Or an appellation/climat detector tool?

The other point, which should be obvious, is that no matter how discriminating a database based upon such data hypothetically might be, in areas like burgundy (or Napa, Sonoma or Oregon) where multiple different branded wines can be made from a single vineyard, such information is unlikely to be of use except to compare a single branded wine from a single vintage against an alleged impostor.

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This is the technology you refer to - it doesn’t damage the wine.

The concept looked good and seemed promising - given a large testing set I think it would work
But Dr Cecilia Muldoon has found another use for this technology - testing for cancer in urine samples -

So the verivin project has been mothballed/discontinued

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There are a lot of detection technologies (Raman spectroscopy, magnetic resonance spectroscopy, and others) that people have looked at using for characterizing wine that are non destructive. I think they have the issues Don mentioned, ie that they may help identify varieties that shouldn’t be present but may not be an unambiguous fingerprint for specific wines. I think another is that there isn’t really a large market compared to applications in medicine or scanning material in airports or at borders, etc.

-Al

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Jamie_Goode

14h

This is the technology you refer to - it doesn’t damage the wine.

wineanorak.com

VeriVin: using spectroscopy for non-destructive testing of wine – wineanorak.com

The concept looked good and seemed promising - given a large testing set I think it would work
But Dr Cecilia Muldoon has found another use for this technology - testing for cancer in urine samples -
______________________________________________________________________________.
Thanks Jamie. Your article explains the technology really well. I’m glad that Dr. Muldoon found a viable option for the technology – and the cancer screening sounds considerably more lucrative. Did Dr. Muldoon provide any estimate for how expensive her spectroscopy machine might be?

This non-destructive method of performing the spectroscopy would clearly be preferred by everyone in the wine industry – assuming that you could get the same level and quality of data described in the Wine Spectator article. It sounds as though the people doing the testing in the Wine Spectator article may have been looking at a lot more data points on the spectrograph in order to identify the unique characteristics of the vineyard by virtue of their AI analysis. (Or maybe that’s just wishful thinking on my part based on the author’s language.) If this is correct, combining the non-destructive Raman spectroscopy method with the AI data analysis described in the Wine Spectator article might make this technology more viable for use in the wine industry as a tool to avoid counterfeiting.

But I am still highly skeptical as to whether this is a viable product for the wine industry. First and foremost, this would only work for monopole vineyards, which really limits the market. In burgundy there only five significant monopoles on the potential counterfeit list (i.e., DRC Romanee Conti and La Tache, Liger-Belair La Romanee, and potentially Clos de Tart and La Grand Rue.) In Bordeaux, the potential market is limited on the producer side is limited to the first growths, a handful of other classified growths and a similar number of right bank cult wines. This likely means that the potential wine producer customers number less than 40 producers today.

Another problem is that you have to get virtually all of the producers of the most frequently counterfeited wines to participate in order for this to be viable. If, for example, DRC says no to participating (and from my perspective, I think they would say no), then the company has nothing to sell.

This is going to be a very hard sell to a lot of wine producers, for several reasons. First, many of the producers do not like the adverse publicity associated with counterfeiting of their wines. From the perspective of some of the producers, they only have a “problem” with counterfeits if they acknowledge that a problem exists. If they remain silent, then either there is no counterfeiting problem, or they have plausible deniability. If they do acknowledge an ongoing counterfeiting problem, then they create a potential problem for their own future wine marketing. Second, generally speaking, wine producers do not want to have to pay for their staff to devote time to regular and ongoing inquiries about whether bottles being sold in the after-market are authentic or not. Some producers deliberately avoid responding to communications from auctioneers and merchants about whether bottles in the latter’s possession might be counterfeit. Third, I have heard more than once that the producer would rather spend money on making the bottles difficult to counterfeit than on trying to detect the counterfeits once they are out there in the market.

On the auction house/large retailer side, most of them would love to have access to a machine where they could scan bottles to determine whether they are counterfeit – if the machine and the database access aren’t exorbitantly expensive. The number of wine auction companies and their various sites where they warehouse and screen the bottles is limited (less than 30 sites among the larger US, UK, European and Asian auction houses plus maybe 40 other smaller or regional wine auction companies.)

From the perspective of the owner of the technology, even if all of the players described above elected to participate, the “market” would probably be less than 100 of the machines. It is hard to see how this is a large enough market to be lucrative.

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Hi Don, I am a reporter with Bloomberg Businessweek. Would love to chat more about your involvement in this case. Can you email me at bcamcrane@gmail.com? Best, Brent Crane

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BORDEAUX WINE CELLARS – the saga continues …

In March of 2022, I wrote a lengthy post about the criminal charges filed by the US government in the Eastern District of New York against two UK citizens, Stephen Burton and Andrew James Fuller, who owned and operated Bordeaux Wine Cellars from 2009 to 2019. https://www.wineberserkers.com/t/rudy-kurniawan-global-wine-auction-fraud-thread-merged/56614/9207?u=don_cornwell The indictment charges Burton and Fuller with multiple counts of wire fraud, conspiracy to commit wire fraud and money laundering which allegedly resulted in $99 million in losses to investors in the United States and multiple other countries.

Bordeaux Wine Cellars was operated as a Ponzi scheme. Bordeaux Cellars claimed that it made loans to wine collectors at high interest rates (15%). The loans were allegedly collateralized by high value wines from a designated eligible wine list (mostly first growth Bordeaux and high end burgundies). The loans made allegedly represented a maximum 35% of the appraised value of the collateral (later changed to up to 45%). The wines accepted as collateral were allegedly placed in storage in London-area storage facilities under Bordeaux Cellars’ control.

Bordeaux Cellars funded their “loans” by selling them to investors at very high interest rates (12%). The investors received loan paperwork prepared by a UK attorney and a schedule of the wines supposedly collateralizing the loans that they were purchasing. Investors were promised quarterly interest payments. For a number of years, interest payments were made utilizing funds obtained from other investors as part of the Ponzi scheme. The investment scheme was heavily promoted by the principals – with multiple appearances by Stephen Burton on CNBC and at investment seminars sponsored by Sovereign Man. See [https://www.youtube.com/watch?v=4_jZUXDJ9as&t=156s ](https://)

As you may remember from the prior post, the Bordeaux Cellars Ponzi scheme began unraveling in late 2018. James Fuller, who had previously been convicted of committing fraud on a UK bank, and had fled from the UK to Singapore in an attempt to avoid prosecution, once again fled the UK for Asia in 2018. Stephen Burton also attempted to flee, but did not act quickly enough. On February 14, 2019, the police went to a hotel in Kent England on a tip that Stephen Burton was there – for whom they apparently had arrest warrants. When they got there they found him – along with two fake passports, and almost a million Pounds worth of currency, gold bars, Kruggerands and some high end collector watches. Burton was charged with counts for money laundering and the fake passports, plead guilty to both, and was sentenced to four years in prison for those crimes on September 6, 2019.

In late 2019 or early 2020 the Department of Justice opened an active criminal investigation as to Burton and Fuller. The UK Serious Frauds department was alerted. By virtue of the covid pandemic, Burton was released from prison (without notice to the FBI) during the summer of 2020. He immediately fled the country. As reported in a later post https://www.wineberserkers.com/t/rudy-kurniawan-global-wine-auction-fraud-thread-merged/56614/9403?u=don_cornwell, Burton was later caught illegally crossing the border into Morocco and was eventually extradited to the Unites States. On December 16, 2023 he was arraigned in Brooklyn and plead not guilty to all counts.

Andrew James Fuller was captured and arrested in the UK on February 4, 2022. In March of 2022 the US government filed a formal request for extradition of Andrew Fuller. Fuller who was being held in UK’s Wandsworth prison, resisted extradition. Fuller made three arguments to as to why he should not be extradited: (1) the conditions in the Metropolitan Detention Center in Brooklyn were very bad according to at least one published court decision and the amount of space per prisoner allegedly did not satisfy the applicable treaty provisions; (2) there was a high risk that if Fuller was extradited to the US that either Fuller’s wife, or Fuller himself, would commit suicide; and (3) that the majority of the victims of the scam and the harm had occurred in the UK, so that was the appropriate place for Fuller to be tried under the UK extradition statutes.

In response, the US government presented evidence that: (1) the conditions at the Metropolitan Detention Center in Brooklyn had been considerably improved (since the date of the decision cited by Fuller) and that Fuller’s information about the amount of space provided to each prisoner was incorrect (i.e… that the MDC Brooklyn fully met the minimum space requirements in the treaty; (2) that the prison officials could prevent Andrew Fuller from committing suicide while in custody and Fuller previously had no problem in abandoning his wife and living apart from her from 2009 to 2012 and for most of the time from 2018 until he was arrested in February of 2022; (3) that 71 of 141 of the victims of the scheme were from the US, and that that approximately 30% of the total losses (more than $24 million) were suffered by people in the US, far more than in the UK (the only other viable place for a trial) and that the Kent police had already declined to prosecute Burton for the Bordeaux Cellars scam; and (4) that the US had Burton in custody, had charged both Burton and Fuller on the scheme, and that “the case” was far more advanced in the US than in the UK.

On March 23, 2023, a year after the extradition request was made, UK District Court Judge Zani overruled Fuller’s objections and referred to matter to the UK Secretary of State for a final decision on whether the extradition should proceed. On May 10, 2023, the Secretary of State approved the extradition.

At that point Mr. Fuller filed a motion seeking permission to appeal the extradition to the UK High Court. On July 3, 2024, one year ago today, that permission was granted. The same arguments were presented. On May 20, 2025 the UK High Court handed down an extensive written opinion which affirmed the original decision of the UK District Court.

Under UK law Fuller may file a motion seeking leave to file an appeal to the UK Supreme Court. At this point, there is no indication that has happened.

Meanwhile, back in the United States …

According to the court docket, Stephen Burton, who is represented by a federal public defender, has been engaged in plea negotiations with the government since at least April of 2024. At some point, a motion to change the plea was apparently discussed with the court and calendared, but there is no motion to change the “not guilty” plea on file. The motion has been continued nine times since April of 2024 and is currently calendared to be heard on July 24, 2025.

It certainly appears that the government is contemplating entering into a plea agreement with Stephen Burton in return for testimony against Andrew Fuller – but the government obviously cannot reach such an agreement unless it knows that it will have Andrew Fuller available to prosecute.

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I know nothing of the practices in the Eastern District of New York, but in my district that same procedural history likely would indicate those motions all were related to an anticipated change of plea to “guilty” pursuant to a plea agreement, and that cooperation has been ongoing and any deal worked out between Burton and the federal prosecutors is contingent on ongoing successful/truthful cooperation against Fuller and any others involved. That likely would include testifying as needed. So, I suspect your conclusions are correct.

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There are apparently legitimate ways to collateralize wines.

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what does this have to do with Rudy ?

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Nick

It’s the global wine fraud part of the the thread. :wine_glass:

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isn’t this the article describing a lending biz ? Sorry it’s behind a paywall.

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Yes, you’re mentioned.
An article from 2015.

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Nick

I’m sure you must have seen a copy of this New York Times article. The first three paragraphs read as follows:

As a restaurateur and wine collector, Nick Gangas knows the special pleasures of pairing a fine Burgundy with a roast chicken or a leg of lamb. Yet recently, he discovered another use for his Burgundy — as loan collateral.

Like a growing number of collectors, Mr. Gangas has pledged some of his finest French wines for large cash loans with generous terms. Using $300,000 worth of his Domaine de la Romanée-Conti, Chambertin and other wines, he’s about to receive a loan of about $150,000, which he plans to use to open a new restaurant in the Chicago suburbs.

The bottles “would be just sitting in the cellar aging,” said Mr. Gangas. “Why not use them to raise capital? By the time they’re ready to drink, I’ll have paid back the loan.”

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Masterful response. Nicely done.

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yes. I remember the article. I agreed to be interviewed. I will say again I see no connection between this and fake wine from Rudy or anyone else. Posting the article here is a cheap attempt at relevance I guess because of the picture ?

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Nick:

I’m not sure quite sure about what your argument is. Several years ago Todd consolidated two other wine-fraud related threads with this one. There have been several posts about Ponzi schemes involving wine sales or wine investment discussed in the thread (e.g., Premier Cru, Bordeaux Cellars, Charles-Winn, LLC). The discussion about Bordeaux Cellars started in 2020.

Or was your issue with Mark Golodetz’s post with the link to the New York Times article about the wine-collateralized loans that were available from Marc Lazar’s former company (Domaine)? Mr. Golodetz’s comment that “There are apparently legitimate ways to collateralize wines,” and the link to the article was directly relevant to the wine loans made by Bordeaux Cellars (apparently not very many of them).

But personally, I had to chuckle at Mark’s post. I immediately recognized the photo from the article as Marc Lazar. I found the irony in Mark’s comment was exquisite to see Mr. Lazar described as an “apparently legitimate” way to obtain a collateralized wine loan. But, to his credit, at least Marc Lazar didn’t try to sell the wine loans he made as “investments.”

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Don,

I feel like sometimes these threads devolve into repetitive back and forth. For the record I was not aware it was Lazar’s company. The wine was being held in storage at domaine and as far as I knew that was the extent of their involvement. So once again I do not see how this possibly was related to wine fraud.

Nothing I have read from the comments after Mark’s post indicated it to me also.

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I think it’s Patrick Stella who runs it.