In this week’s episode, we uncork what’s potentially the most famous wine scandal of all. Rudy Kurniawan, purported to be a wine broker of fine and rare wines. Rudy was once known for having “The Greatest Cellar on Earth.” However, his millions in sales turned into years in prison after law enforcement caught him manufacturing labels and creating fraudulent wines. As many as 10,000 counterfeit bottles created by Kurniawan may still be in private collections.
Listen Now: Vinfamous: Wine Crimes & Scandals
Episode Transcript
MAUREEN DOWNEY, GUEST:
It was an open secret.
JERRY ROTHWELL, GUEST:
They either see him as a hero, Robin Hood figure, who’s taking the rich to the cleaners or as a villain.
(Theme Music Fades In)
ASHLEY SMITH, HOST:
You are listening to Vinfamous, a podcast from Wine Enthusiast. We uncork tales of envy, greed, and opportunity. I’m your host, Ashley Smith.
(Theme Music Fades Out)
So as you know, this podcast covers wine crimes and scandals. And there is one crime you may have already heard of, Rudy Kurniawan and his multimillion-dollar cellar. This week on Vinfamous, how exactly did he get away with this fraud for so long? Where might he be now and who are the real victims of this kind of deceit? To answer these questions, let’s go back about two decades. The sunglasses were tiny, jeans were low, and a free-ish Britney Spears was pumping out hit after hit. That’s when Rudy Kurniawan took his first sip of fine wine. The story he would tell his friends is this. He was sitting at a restaurant in San Francisco’s Fisherman’s Wharf. He was eating dinner with his family and perusing the wine list. His eyes landed on the most expensive bottle, a $300 Opus One. He was hooked. Rudy had a new obsession, fine wine, and soon the world would see how obsessed he was.
MAUREEN:
Rudy, he was young.
ASHLEY:
That’s Maureen Downey.
MAUREEN:
I remember there was a dad with a kid and the kid was only 12 years old and he would bid, and after that, Rudy was the next youngest guy. So Rudy was funny and nice, and he was a geeky wine interested guy.
ASHLEY:
Maureen met Rudy when she was working at the auction house, Morrell & Company. She was already recognized as a skilled sommelier and worked her way up the hospitality industry at some key New York City spots that you may have heard of, such as Lespinasse, Felidia, and Tavern on the Green. In the early 2000s, wine auctions were becoming more and more popular. Wine auctions in New York only became legal in 1996. Things were different back then. There was a sense of camaraderie.
MAUREEN:
It used to be that before every auction we’d have a pre-auction tasting, and that was a fun event, and people would walk around and sample the wine. It was a Thursday night event and everybody would go, and it was such a small industry that we were all friends.
ASHLEY:
Rudy lived with his mother in a Los Angeles suburb named Arcadia. He started out like many wine drinkers in Southern California. He would drink local wines like Screaming Eagle, but then passion led him to jump coast to coast, going to auctions in Los Angeles and New York City.
MAUREEN:
He was part of the group. We would have dinners and we would have tastings and we’d have auctions, and he was just part of the crew that we ran with.
ASHLEY:
It was at these pre-auction tastings in New York City where Maureen got to know Rudy. She said he was buying $40 bottles of Merlot, not anything super fancy, but that was just the beginning.
JERRY:
Everyone we spoke to spoke about Rudy’s encyclopedic knowledge of wine, his palates, which enabled him to identify any wine from Californian, to old, to Australian to old Burgundy.
ASHLEY:
That’s Jerry Rothwell. He’s a documentary filmmaker who co-directed a film about Rudy’s life in wine. The film was called Sour Grapes. Then pretty quickly, Rudy moved up the wine lover’s ladder into the world of Bordeaux and Burgundy wines. These are fine wines that create obsessive cult followings. His taste was growing more and more expensive. Just a few months into his arrival to the wine auction scene, he wasn’t just the nerdy young guy attending the pre-auction party with everyone else, he was a man of money who threw exclusive expensive affairs.
JERRY:
He threw tasting parties and dinners costing tens, hundreds of thousands of dollars. For everyone, I think Rudy was a slightly mysterious figure. They knew that he lived with his mom, but he never invited people to his home and there were these kind of ideas circulating he was a son of a very rich family, possibly beer exporters in Indonesia, China. He said he’d come to the US on a golf scholarship. There were these myths that grew up about him. All of them were based actually in some element of truth, but none of them were detailed enough to really pin down who he really was.
ASHLEY:
Right. There’s like this mystique, these rumors of like, “Oh, well, I wonder who he really is to throw all these lavish parties and be this Great Gatsby of wine.”
JERRY:
Yeah, and obviously, as soon as you come into Rudy’s orbit, I think people must have felt they just got really lucky. Here’s a guy who’s going to enable us to taste wines we would never otherwise be able to taste.
ASHLEY:
Real estate tycoons, movie producers, bankers, these are the moneyed wine enthusiasts who fell into his orbit. They called Rudy Dr. Conti as they drank famous wines like Domaine de la Romanée-Conti and Burgundies that went back to the 1800s. Can you imagine sitting at one of these tables? You’re chatting with powerful people, eating exquisite dinners, and Rudy is about to pour a wine that costs more than your car and very well could have been bottled before your grandparents were born. What else do you need to build a mystique like that?
JERRY:
There emerged this a series of wine clubs, mainly in LA and New York, often all male with names like the Bergholds or the Order of the Purple Pallet, or the one which really was part of the 12 Angry Men. You needed to bring some pretty expensive bottles of wine to be part of that group.
ASHLEY:
Yep, you heard that right. While these other drinking groups had innocent names, this macho group called themselves the 12 Angry Men. It’s the same name as the 1957 courtroom drama, which took place during a time in US history when only men could serve on juries, but I digress. Apparently they called themselves this because they would arrive to fancy wine parties and would be outraged when they realized that yet again, they brought the nicest, most expensive bottles of wine. They thought of themselves as elite wine drinkers and they didn’t want to share with inferior wine drinkers.
JERRY:
I guess that group got its reputation for excess for two reasons. One, because of the almost value of wine that would be drunk in an evening. Tens of thousands of dollars of rare wine could be drunk in an evening. And secondly, because maybe the emerging of a wine blogging culture, particularly John Kapon would write accounts of these sessions, which would build the myth, I guess.
ASHLEY:
John Kapon, remember that name. He’s the third generation owner and operator of Acker Merrall & Condit, or Acker for short. It’s a wine store in New York City’s Upper East Side that has been around since 1820. John’s emails after their drinking sessions just added to their legendary status. At these gatherings, Rudy would pour bottles from his personal collection nicknamed the magic cellar. Ostensibly, he was getting this wine from his headline making bids at auctions. According to a 2006 Los Angeles Times article, Rudy was spending an estimated $1 million per month bidding for old and rare wine, and he did that for “the last several years.” In 2006, other wine lovers could purchase part of the mystique of this magic cellar. The stakes were high for Rudy, but they were perhaps higher for the auction house hosting this event, Acker.
This was the first ever single seller auction at that auction house. The first auction netted $10.6 million, $10.6 million. Then in the second auction, bidders more than doubled that number and netted $24.7 million. This broke the record for the single sale of wine at an auction. That’s wild. This added fuel to Rudy’s lavish lifestyle. He decided it was time to move out of the LA suburbs, and he started an $8 million renovation in the lavish LA neighborhood of Bel Air. He drove exotic cars. He started to buy contemporary art, but not everything was adding up. Some were growing suspicious of Rudy’s exceptional fortune finding rare wines. Sommelier Maureen Downey kept your eyes open.
MAUREEN:
In the wine auction industry, obviously everything is secondary market and/or gray market, so you have to inspect all the bottles and you inspect them for provenance, for health. So you’d put these cases of wine up on a table and you’d realize that eight of them looked the same and maybe four of them looked a little bit different.
ASHLEY:
Maureen realized she had a knack for identifying the odd bottle when she was starting out at Morrell’s Auction House.
MAUREEN:
One of the first bottles I ever found, I reached to the back of a table to grab a bottle of what was supposed to be Petrus and my sheer muscle memory of how heavy the bottle was supposed to have been kicked in. And I lifted the bottle. I almost threw it on the ceiling because it was in this really light blue glass that at the time we would’ve associated with Chilean Merlot. So I just started seeing these things that didn’t fit. Every time you look at a bottle, I take a moment, especially with an old and rare bottle, or actually now even young bottles because organized crime is heavily involved now and it’s mostly younger wine that are being counterfeited, but I look at it, if you imagine looking at a piece of art, you don’t focus first on the lady’s foot. First, you look at the whole piece and you spend a moment looking at the whole piece and taking the whole piece in, and then eventually you start to look at the details in the different parts.
So imagine looking at a great master and then all of a sudden you look down at the foot and you can see that it was printed digitally and you’re looking at that going that doesn’t fit. So when I have a bottle that has a label that looks like it’s been through 50 years of cellaring or it looks like it’s been through a war and you have a pristine capsule, those things are supposed to have spent their lives together, and you look at that and you go, “This bottle’s had a facelift because that capsule does not match that label.”
ASHLEY:
She started studying up on the elements a fraudster would try to impersonate, things like the label, the seal, even the type of paper used to make the label. She mined her network of friends in New York.
MAUREEN:
I had a friend that worked at The Met and she introduced me to a woman who worked in the old documents department, and I took her to artisanal and plied her with as much cheese and wine as she could eat, and I just asked her questions for hours about the history of paper and what happens to paper in humidity and how paper has changed over time. I visited printers and I have cousins who are glassblowers and they’re glass experts, and I just gathered all this weird information from other places and started putting it together.
ASHLEY:
It really seems like you were the perfect person to take this on because you had that network that you could call on and because you had the tenacity to seek out information that you could use to then make this your whole career.
MAUREEN:
I’m basically a counterfeit junkie. I really got into wine because I love learning and I love history. So if you put together a love of wine and a love of history and a belief that these wine producers are pouring their heart and soul into these wines and it’s art and it’s just really wrong. It’s probably also a little bit of Sister Catherine in my Catholic upbringing in my ear telling me do the right thing.
ASHLEY:
So when Rudy contacted her about some bottles he wanted to sell, Sister Catherine was whispering in her ear.
MAUREEN:
I had the realization that Rudy was trying to sell fraudulent wine the very first time that he brought wine to me at Zachys and that he could not come up with receipts for them. It’s absolutely preposterous that a young man would claim that he recently bought these bottles and now he wants to sell them, and he didn’t have a receipt to prove that he purchased them. I don’t think that’s something that should be a difficult thing to expect. If a 26, 28-year-old has millions and millions of dollars of jewelry or any asset, gold, where’d you get it? By this point, things were pretty modernized and you could just show me your credit card bill.
ASHLEY:
Years before John Kapon’s Acker Auction House broke record selling Rudy’s wine, Maureen was speaking out. And even at the time, you were one of the only people who were speaking on what was going on with the fraud and with Rudy. And that made you a bit of an outsider in your industry.
MAUREEN:
Oh, I’m a pariah to a lot of people. I have to take bodyguards to large tastings. I’ve actually been physically assaulted.
ASHLEY:
Oh my God.
MAUREEN:
But this is big money, and I was viewed as the girl pissing on the boys’ campfire. Everybody’s having fun, why can’t you just let it go?
ASHLEY:
When you realized, okay, this guy is trying to pull off some fraud here, who did you tell? What is the next step from that?
MAUREEN:
My God, I told everybody that would listen. It actually got to the point where my brother said to me once, “Mo, you got to let it go. Nobody cares about fake wine.” And I was like, “But it’s wrong, damn it. No.” Then there was the Ponsot auction.
ASHLEY:
The Ponsot auction. Acker Auction House advertised an impressive catalog of wines to be auctioned off on April 25th, 2008. These vintages were so rare, so high end, even the most refined Burgundy enthusiast hadn’t heard of them because they didn’t exist. Laurent Ponsot would be the authority on this. He’s the owner and operator of Domaine Ponsot. So he was shocked when he saw 1959 and 1945 bottles of Clos Santini in the auction catalog. But Laurent knew with absolute certainty that these vintages did not exist. His family only started producing this wine in the 1980s.
MAUREEN:
Laurent Ponsot and Burgundy, he ended up calling John Kapon and saying, “Look, you can’t sell these bottles. We never made them.” And John said, “Yeah, okay. I’m going to pull them.” And Laurent Ponsot did not believe John Kapon and Ponsot showed up at the sale. If Acker had intended for those lots to be withdrawn, those Ponsot lots, they would’ve been on the addendum as withdrawn. They were not withdrawn. They were not withdrawn until somebody went up to the podium and told John Kapon that that guy sitting right in front of you with long hair is Laurent Ponsot. And then John pulled them from the podium. This was several hundred thousand dollars worth of Ponsot wines that were pulled, and this is where then Laurent Ponsot went to John and said, “Where are these from?” And John said, “I got them from Rudy.”
ASHLEY:
After this break, the secrets spill out from Rudy’s magic cellar. If you follow politics, you’ve probably heard of the Koch brothers, Charles and David. They bankroll Republican candidates and conservative causes, but if you’re in the wine world, then you might recognize Bill Koch as the biggest private wine collector in the United States. His home base is Palm Beach, Florida and he holds 43,000 bottles of wine in his cellar.
JERRY:
I guess it’s the size of a, what can I compare it to? Half a gymnasium, something like that.
ASHLEY:
That’s Jerry Rothwell again. Jerry visited the cellar when he was filming Sour Grapes. What was it like to be surrounded by wine that expensive? If I was at that vineyard, I think I would be afraid I was going to like hurt a vine, and if I was in Bill Koch’s wine cellar, I would be scared to touch anything.
JERRY:
Yeah, always a bit worried about knocking over bottles. Yeah, it was an extraordinary space.
ASHLEY:
Bill Koch hired a team of skilled investigators to confirm the authenticity of his wines. In 2007, investigators flagged wines he had purchased from Rudy at auction.
JERRY:
He was in the process of discovering that $4 million worth of those, I think 400 bottles were fake, half of which he’d bought from Rudy. And so I think for Koch, it was a very personal journey. He spent, I think, more on investigating Rudy than he lost in wine, but for him, it’s not about revenge, but it’s about getting to the heart of understanding what happened.
ASHLEY:
It’s about this time when the FBI starts building their case against Rudy as well. Maureen Downey starts talking to Bill Koch’s investigators and the FBI around 2008.
MAUREEN:
So it was four years we were talking to these guys before Rudy was finally arrested.
ASHLEY:
Wow. That’s a long investigation. Why do you think he was able to continue doing what he did for so long and getting away with it? Just that nobody cared or that the money was more important?
MAUREEN:
Yep. It’s all about greed. It’s all about the almighty dollar. The people that were buying these wines were not people that cared about their authenticity. They cared about having a bigger wine than you. It was all about who’s got the bigger one. It was total American male ego.
ASHLEY:
Four years later, the authorities busted into Rudy’s home in Arcadia. Inside this cookie cutter suburban home was the operations behind the so-called magic cellar. Investigators seized millions of dollars in properties and assets, such as luxury cars. There was a white sink stained by wine. They found three bottles sitting on a pink towel that were stripped of their labels and a couple of bottles with labels soaking in an attempt to make the new labels appear decades old.
JERRY:
When the FBI raided Rudy’s house, what they found was all kinds of evidence of his faking activities, and that makes you understand of the lengths he had to go in order to fake vintage wine. First of all, you need to get the label itself right, which isn’t necessarily easy because labels, you needed to age paper to make those labels believable and print them in a believable way. You needed to be able to stamp those labels with the appropriate merchant, and that’s some of the mistakes Rudy made that ultimately got brought forward in court. So for example, there was a wine distributor called Percy Fox & Co, which is a UK wine distributor in Sackville Street in London, and Rudy made a label for that which misspelled Sackville Street.
ASHLEY:
And bottles. Rudy needed to have hundreds and hundreds of bottles to keep up with this act. And as you might imagine, the bottle of, say, a 1945 Domaine Conti is quite different than the $20 bottle you’d find at Costco. Remember the lavish parties young Rudy would host deep into the night? Well, after his guests all stumbled home and tables would be full of empty wine glasses, Rudy would collect the discarded bottles and sometimes he would go to great lengths to obtain these.
JERRY:
He managed to get old glass bottles from distributors in France, we think. And he claimed that he was creating a bottle museum, so he’d be getting bottles from restaurants.
MAUREEN:
Crew restaurant is where they had the big dinners, and then after the dinners, sommelier Robert Bohr would ship the empty bottles back to Rudy, making sure to cork them to preserve the sediment.
ASHLEY:
Then of course, there’s the wine itself. He would create his own blends of old French wine and young wine from California. When people look back on their tasting notes, some would remark how youthful the wine tasted. Hindsight is always 2020.
JERRY:
Then he needed to test an experiment, and that was the role of dinners and tastings to try bottles out on people. Had it worked? Did they pick anything up? He professed himself to be an expert in fake wine. So sometimes he would bring a bottle and he’d say, “Yeah, I’m not really sure about this one. Tell me what you think.” When the FBI his house, there’d be these bottles which had blending recipes on them on the whole using as a base for the wine, maybe wine of the same era, 50s 60s Burgundy wine, but off-vintages. There’s evidence that he bought large quantities of off-vintages and then mixing them with perhaps a newer Californian wine. It’s not like he’s re-bottling a $5 bottle of wine, it was a $10,000 bottle of wine. He’s going through quite lengths to get wine to end up with something that tastes similar to the wine he’s faking.
ASHLEY:
So I had to ask if these fakes ever came close to tasting like the real deal. And did you ever taste any of it?
MAUREEN:
Oh, I’ve had a bunch of his counterfeits. They usually don’t taste very good, but a lot of times they’re corked, and that’s a good counterfeiters trick, is that they intentionally put TCA in the bottle so that you think, “Ah, bummer, corked.”
ASHLEY:
Right, so then that that’s the excuse for why it doesn’t taste right.
MAUREEN:
Right.
ASHLEY:
Then finally, the FBI brought Rudy Kurniawan to trial. This was the Fed’s first ever criminal case involving wine counterfeiting, $1.3 million in counterfeit wines, 2013 December in New York City, a time when many people are shopping in Midtown or trying to see the Rockettes, a federal jury was deliberating if this man was guilty. Two hours later, they decided he was guilty of fraud and sentenced to 10 years in prison. Some notable names testified, including Bill Koch. He said he spent $2.1 million buying more than 200 counterfeit bottles, and he spent $25 million on a “personal crusade to get to the source of the fraud.”
MAUREEN:
Ultimately, during the trial, I felt really bad for him. I was the only one that said hello and goodbye to him every day. Nobody was there for him. All of those people that made so much money off of him completely abandoned him, and I felt bad for him because he’s a patsy in all of this. Rudy is not the mastermind here. Rudy didn’t make the money. Look at all the people that made millions and millions and millions of dollars and the people whose businesses were built on the back of the fraud.
ASHLEY:
Mail and wire fraud is what Rudy was convicted of, and he ended up serving only seven years of his sentence. Then in 2021, US immigration officials deported him. Rudy boarded a plane in Dallas Fort Worth International Airport and flew back home to Jakarta, Indonesia. He was 44. They released a grainy picture of him, dark glasses, plain T-shirt, short pin, straight black hair. He has wrinkles. No one really knows what he’s up to now. He could be making fake wines in Indonesia, but one thing is for certain, the mystery behind his wine and his family fortune was all smoke and mirrors, but some new details emerged.
Enterprising journalists in Indonesia uncovered that Rudy’s family has deep connections to organized crime. His uncles are Hendra Rahardja and Eddy Tansil. His Uncle Hendra is at the center of a tangled web of bank related grift. After fleeing Indonesia, he was sentenced to life in prison for misusing more than $216 million in assets. In 1996, his other uncle bribed his way out of prison in Indonesia. He was in jail for embezzling a jaw dropping $420 million from the Indonesian bank where he worked. In 1998, Uncle Eddie was discovered to be living in China, running a beer company. That’s just a few years before Rudy started his own foray into the world of wine. So let’s back up. In the case of the $1.3 million wine fraud, was justice served here and who was really harmed?
JERRY:
My experience with the release of the film is that people have quite polarized views of Rudy. They either see him as a hero, Robin Hood figure, who’s taking the rich to the cleaners, or they see him as a villain that’s stomping on the value and the artistry of wine. I think in the end, he’s neither in a bit of both of those things. I think what people I suppose need to bear in mind is that Rudy himself was very wealthy and that wealth had probably, at the time, we couldn’t really establish the direct link with the bank frauds within his family in Indonesia. But I think that link has been pretty well established now by Indonesian journalists.
ASHLEY:
I asked Maureen the same question, who is harmed when wine is counterfeited?
MAUREEN:
So I started screaming about this in 2002. It’s been 10 and a half years since Rudy was arrested. I have been screaming about this for so long, 20 years, that I finally decided to adopt the politician’s angle. Who is harmed by this? The children. Why the children? If you look at statistics, if 25% of all alcohol is illicit, then we are talking about 25% of all alcohol taxes not being collected. So the next time you wonder why a school is underfunded or why you hit a pothole, thank a fraudster.
ASHLEY:
Well, okay, apart from tax funding being taken away from innocent children, Maureen argues there is another impact on this.
MAUREEN:
It affects all of us because it raises prices. There’s a reason that Napa Valley Cab, you can’t get a decent Napa Valley Cab for less than $150 now. You used to be able to get it for $75 or $65, but when the highest producers raise their prices so high and you consider yourself a quality producer, you go, “Well, the gap between their prices and my price can’t be that high. I look cheap now. I need to raise my prices because I need to be in line with that luxury level.” What we have are higher prices. We have less trust in the industry. We have producers whose art is being totally bastardized, and we have a lot of people who are clearly not working on behalf of the consumer, which I think is horrific. I think consumers need to stand up and only work with those vendors that they know are doing an amazing job.
ASHLEY:
Maureen now runs Chai Consulting and the website, winefraud.com. She trains sommeliers and people in the wine industry to recognize signs of fraud.
MAUREEN:
A lot of retailers really don’t like me because I’ve made their job more difficult. I don’t trust, I verify. Trust is what got us where we are. Oh, trust me, I’ve been buying from this guy for 30 years. I don’t care. Maybe he’s been selling you fakes for 30 years. People do not osmose the ability to authenticate. There are a lot of old time retailers, especially in the United States that are selling counterfeit wine, whether they know it or not, and I don’t think that everybody that sells counterfeits does so intentionally, but a lot of people would just prefer the plausible deniability. Oh, I didn’t know. When they get caught, oh, I didn’t know. We are finally seeing some retailers and negotiants who care enough about the issue to do something about it, finally. Berry Bros. & Rudd was an early adopter. They had us come in and train up Philip Moulin as soon as they were made aware of the scope of the problem and the scope of the problem is vast. According to the World Health Organization, 25% of all alcoholic beverages are either counterfeit or illicit.
ASHLEY:
Wow.
MAUREEN:
25%. Yep. It is not a problem only for people who drink Château Lafite. I was in London. I judged the International Wine Challenge. I bought a bottle of Hendricks at a major supermarket chain, and I put it in the freezer in my hotel room and it froze. Gin’s not supposed to freeze. It was a counterfeit bottle of Hendricks. So this is happening across the board.
ASHLEY:
Hendricks is my favorite. So I was like, no.
MAUREEN:
So that was shocking, right?
ASHLEY:
The labels are evolving. Now, if you look closely on certain bottles of wine, there’s a pattern of bubbles indicating authenticity, and Maureen has a new idea to protect consumers.
MAUREEN:
Anything that we authenticate, we put into the Chai Vault, which gives a blockchain secured ledger that shows that the bottle is authentic, where it was authenticated by whom, and it also shows any provenance information. And then if somebody sells the bottle, that ledger is updated with the new information and a buyer’s name can be encrypted so that it can never be seen by anybody else. But the actual sale information isn’t. The vendor and the date of sale remain in the blockchain for people to see so they can actually trace the origin of the bottle. And until we start really using a lot of these Web3 applications, we’re going to continue to have to trust. And I don’t trust, I verify.
(Theme Music Fades In)
ASHLEY:
That’s all for this week’s episode of Vinfamous, a podcast by Wine Enthusiast. Join us next time as we travel back to ancient Roman times and investigate the surprising history of poisons in wine. Find Vinfamous on Apple, Spotify, or wherever you listen and follow the show so you never miss a scandal. Vinfamous is produced by Wine Enthusiast in partnership with Pod People. Special thanks to our production team Dara Kapoor, Samantha Sette. And the team at Pod People, Anne Feuss, Matt Sav, Aimee Machado, Ashton Carter, Danielle Roth, and Carter Wogahn.
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Last Updated: June 6, 2023
