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Calif. wine collector convicted of fraud in NY

  • Article by: LARRY NEUMEISTER
  • Associated Press
  • December 18, 2013 - 5:25 PM

NEW YORK — A California wine collector and influential peddler of rare vintages was convicted Wednesday of fraud for manufacturing fake old wine in his kitchen.

Rudy Kurniawan, whose family gained wealth operating a beer distributorship in Indonesia, was expressionless after being convicted of mail and wire fraud for selling more than $1.3 million worth of counterfeit bottles to other wealthy collectors.

Sentencing was set for April 24, when Kurniawan faces up to 40 years in prison.

After Kurniawan, 37, was led out of the courtroom by U.S. marshals, attorney Jerome Mooney said his client was disappointed.

Mooney said the trial had revealed the "don't ask, don't tell" culture in the high-end vintage wine business over what was being sold.

In closing arguments a day earlier, prosecutors said Kurniawan put on a "magic show" to fool aficionados into thinking he had access to the world's rarest wines. They said he made millions of dollars from 2004 to 2012 by manufacturing fake vintage wine in his Arcadia, Calif., kitchen, even though he had been ordered to leave the country in 2003.

But Mooney said the government had discovered the suburban Los Angeles home of a hoarder when they arrested the Indonesian-born defendant last year, mistaking the hundreds of corks and other winemaking paraphernalia stuffed in drawers and closets as evidence that the home had been converted into a fake wine factory.

Prosecutors said money from the fraud funded a lavish lifestyle in suburban Los Angeles that included luxury cars, designer clothing and fine food and drinks. Mooney said all of Kurniawan's assets have been seized or have had liens placed against them, including the Arcadia home where his 67-year-old mother resides after she obtained asylum.

The trial featured testimony from billionaire yachtsman, entrepreneur and wine investor William Koch, who said he was conned and cheated by Kurniawan into paying $2.1 million for 219 fake bottles of wine.

"I was disappointed and I was angry," he testified.

Michael Egan, a fine wine expert hired by Koch to determine how many of the 43,000 bottles of wine he owns are fake, testified during the trial for the government that evidence collected from Kurniawan's property included 19,000 counterfeit wine bottle labels representing 27 of the world's best wines.

Outside court after the verdict, Egan said the investigation and trial has highlighted an area of the wine resale market that's now been cleaned up, thanks in part to increased awareness from winemakers who now "defend their brands and defend French winemaking in general."

Prosecutors said Kurniawan made some mistakes along the way that exposed his fraud. For one, they alleged that a bottle of Domaine Ponsot he attempted to sell at auction in 2008 was passed off as having been made in 1929, even though the winemaker didn't begin estate bottling until 1934. Others were billed as having been bottled at a specific vineyard between 1945 and 1971, even though Domaine Ponsot said it didn't start using that vineyard until 1982.

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