By the summer of 2006, when I first noticed Rudy Kurniawan at Christie’s in Beverly Hills, he had transformed the market for old wine from a sleepy backwater into a high-stakes free-for-all. Only the richest wine collectors knew him. Or thought they did.
In what appears to be the largest wine fraud case in history, the FBI arrested Kurniawan, 35, last week on suspicion of attempting to sell counterfeit wine. If convicted, he faces decades in prison. Considered a flight risk, he is being held without bail.
How does someone like Kurniawan come out of nowhere and fool everyone? Because whether it’s financial derivatives or Cheval Blanc, when the people who should be on guard against fraud — in this case the auction houses, wine critics and other collectors — are benefiting from the grift, they rarely question their good fortune.
$1 million a month on wine
During the early to mid-2000s, Kurniawan, an Indonesian citizen of Chinese descent, spent what auction houses estimated to be more than $1 million a month buying old wine in Los Angeles and New York. In 2006, he sold $35 million in wine. He coupled his deals with a string of bravura dinner parties during which, with seemingly stunning generosity, he poured what his guests believed was the best of his world-class cellar.
The wine world had never seen anyone throw around so much money so fast. And the guy repeatedly demonstrated an uncanny ability to identify vintages and producers in blind tastings.
I knew very little about the old wine market when I attended the auction at Christie’s that Saturday. But I knew Kurniawan was a story. Slight and soft-faced, wearing heavy dark-framed glasses, he sat in the front row of the sparsely attended affair and bought hundreds of thousands of dollars worth of famous vintage Bordeaux and Burgundy in the space of two hours. A beautiful slip of a girl I knew as a hostess at an Italian restaurant, La Terza in West Hollywood, held his hand. In the other hand rested an auction paddle.
Kurniawan would lift the paddle ever so slightly to signal the auctioneer without drawing the attention of the rest of the room. Half a dozen men twice his age (29 at the time), including “Rush Hour” movie producer Arthur Sarkissian, formed a tight-knit clique around Kurniawan. He never bid against his friends but fought tenaciously over prized lots with Brian Orcutt, a wine consultant whose clients included billionaire William Koch.
Sprucing up the inventory
I sat down with Kurniawan at a Starbucks in Pasadena a few months later. He was late and sick with a cold from spending long days in his refrigerated wine warehouses, he said, sorting through his disorganized mess of a collection. He acknowledged that he’d spent tens of millions of dollars on wine, but, silly him, had never bothered to keep a precise inventory of which bottles were where. He said he was piecing his records together because he was planning to sell some of his cache.
I later attended a dinner Kurniawan hosted at Mèlisse in Santa Monica. A dozen of his well-heeled wine buddies were there along with three editors from the Robb Report and a particularly thrilled young couple Kurniawan described as friends from China. A staggering array of Bordeaux and Burgundy was served with a dinner prepared by Julian Serrano, then executive chef at Picasso in Las Vegas’ Bellagio hotel. Kurniawan had flown him in for the night.
By the time I finally sat down to interview Kurniawan, I had talked with some of the leading wine collectors in the country, the heads of Sotheby’s wine department in New York and Christie’s in Los Angeles as well as wine critics, including Allen Meadows, an expert on Burgundy. The stories they told about Kurniawan were generally consistent.
He paid his bills. He was generous with friends and acquaintances. He had a brother in China who gave him an allowance in exchange for taking care of their mother, who lived with Kurniawan in Arcadia.
Was that allowance big enough to fund Kurniawan’s wine and art collecting hobbies? Nobody knew — or cared. He was apparently a self-taught wine enthusiast with a savant’s gift for remembering flavors and smells. If he liked you, he let you taste from his vast collection. Auction houses fell all over him.
The person who claimed to know Kurniawan best was John Kapon, now CEO at Acker Merrall & Condit, which he built into a wine powerhouse during the years he was close to Kurniawan. Like others, Kapon admired Kurniawan’s expertise in identifying fake wines. He’d been stung so many times buying counterfeit bottles, the story went, he’d trained himself to spot them. He helped others spot them as well.
Kurniawan met me for a lunch interview — an hour late — at Patina in downtown Los Angeles. He was vague about his family, vague about his wine collection and vague about his life story. Fake wines? He’d seen a few, maybe. Secretive and shy, he spoke in generalities.
Suit following suit
His world began unraveling in 2008 when bottles of Domaine Ponsot he offered for auction at Acker Merrall were found to be counterfeit. A lawsuit by Koch, who’d been represented by Orcutt at the Christie’s auction, followed in 2009, claiming Kurniawan had sold him fraudulent wine. Detractors blasted away in online wine chat rooms, claiming he’d been peddling fake wines all along. His wine friends scattered. Last month, another batch of wine offered for sale by Kurniawan at auction at Spectrum Wine Auctions was declared suspect. He has never publicly responded to his detractors.
Who is Rudy Kurniawan?
A cautionary tale. Apparently too good to be true, his story serves as a reminder that when everyone benefits from a grift, no one is eager to see it end. The auction houses made money. And those close to Kurniawan were drinking at least what they thought were the greatest wines ever produced.
But has the grift really ended? The auction houses have moved on to the next new thing: wealthy Chinese wine enthusiasts who know little about old wine, yet are paying record prices and buying everything the auction houses offer for sale.
Photos from top:
Corie Brown. Credit: Chris Fager
Rudy Kurniawan. Credit: Ricardo DeAratanha / Los Angeles Times