Kurniawan lawyers seek to omit FBI evidence

Alleged wine fraudster Rudy Kurniawan’s defense lawyers have asked US federal district judge Richard Berman to omit evidence obtained in an FBI search of Kurniawan's LA home due to issues over the legality of the search. As reported on db.com, Kurniawan is working to have evidence of an elaborate laboratory for counterfeit wines in his home excluded from his trial.

His lawyers are to contest the legality of an FBI search of his LA home after his arrest in a Los Angeles suburb in March. Kurniawan appeared at a brief hearing in a Manhattan federal courtroom last week wearing khaki prison clothing and midnight blue tennis shoes, the Wine Spectator reports.

At the hearing, Berman set a schedule for filings by the two sides, which will culminate on 14 November in the defense's expected motion to suppress the results of the FBI's search. During the search, agents found a home laboratory filled with thousands of fake labels dating back to 1899, including all the Bordeaux first growths and fine Burgundies such as Domaine Ponsot.

The operation was fitted out with hundreds of used corks, foil capsules and hardened wax which, when heated, could seal the mouths of bottles. There were also hundreds of rubber stamps for vintage dates, ranging from Château Latour 1899 to Screaming Eagle 1992, and stencils to imprint the names of famous wine estates on wooden cases.

According to a source close to the defense, FBI agents had an arrest warrant but not a search warrant when they entered Kurniawan’s home on 8 March. "It's one thing if you search a person, or a car, but a person's home is sacrosanct. If our motion is granted, and evidence is suppressed, it's a different case,” the source told the Wine Spectator.

"Our motion is being made to ensure that the Constitution is being honored in the letter and spirit in this case. Other than that, we will let our court papers do the talking,” Kurniawan's lead attorney Michael Proctor said of suppressing the search. Kurniawan is being held without bail at a Brooklyn federal detention facility.

NZ rogue trader jailed for wine fraud

Hot on the heels of Rudy Kurniawan, New Zealand rogue trader Simon Mickleson has been jailed after scamming clients out of hundreds of thousands of dollars. As reported on db.com, Mickleson was sentenced last Thursday in Auckland to two years and four months in prison after earlier pleading guilty to 16 counts of fraud. Judge Grant Fraser described the Mickleson as "sophisticated'' and said there was still over NZ$540,000 owed to his victims, a sum never to be paid back as Mickleson was declared bankrupt last week.

Among Mickleson’s vicitms were a top New Zealand auction house and senior figures in the legal industry, including the lawyer to the Todd Property Group, owned by New Zealand's richest family. "Over 20 years of experience and expertise is effectively down the drain,” the disgraced merchant’s lawyer, Grant Illingworth QC, told Auckland District Court. Crown prosecutor Robin McCoubrey said Mickleson deserved a term of imprisonment. 

Mickleson, 43, worked as a wine consultant at Auckland auction house Webb's while running his own business, Fine Wines International. In actions remeniscent of Indonesian wine collector Rudy Kurniawan, who is currently on trial in New York for four counts of fraud, the court heard that Mickleson faked vintages by doctoring wine labels. He also stole credit cards, took money for wine he didn't have, and sold cases of old and rare wines he didn't own for thousands of dollars.

"Some were clients of the auction house, some clients of yours and some were your friends. It doesn't get more serious in terms of a breach of trust than that,'' Judge Fraser said. Webb's managing director Neil Campbell described Mickleson to the New Zealand Herald as "the worst kind of try-hard. Simon had this idea that being perceived as rich and wealthy made you a better person. He was always seeking acknowledgement of prestige and wealth,” Campbell said. 

Mickleson's deceit began in 2007 after he promised Auckland surgeon Jim Shaw NZ$400,000 worth of high-end wines. The wines never arrived and over the next two years he compensated Shaw by taking money from other clients. In October 2007, Hong Kong-based Joong Sheng Giauw paid Mickleson NZ$66,313.08 for 36 bottles of Château Lafite Rothschild 2000 (pictured), which also never turned up. 

In 2008 he asked school friend Julius Fox to help finance a NZ$99,000 order of French wines for Dr Darren Reed, who he claimed owned the private Ascot Hospital. Fox contributed NZ$29,000 but the deal never went through. Investigations revealed there was no such person as Dr Reed. On another occasion, Mickleson changed labels from a case of 2001 Château Lafite to pass the bottles off as the 1982 vintage. He tried to sell 24 fakes for NZ$98,000, but the buyers pulled out after spotting the doctored labels. 

Ponsot: “Rudy Kurniawan had an accomplice”

The plot thickens... Laurent Ponsot of Domaine Ponsot in Burgundy has spoken out about the Rudy Kurniawan wine fraud case, claiming he knows the identity of an accomplice in the the Indonesian collector’s alleged crimes – as reported earlier this week on thedrinksbusiness.com. “Rudy has been advised by someone with extensive knowledge of Burgundy. I know who it is, but in the current state of the investigation, I keep this information secret,” Ponsot told Vanity Fair. “Rudy himself should denounce his informants and his accomplices.” Ponsot added. 

One possible accomplice is Kurniawan’s Burgundy-born friend and former business associate Paul Wasserman, who met Kurniawan in 2002. Managing a wine shop Kurniawan bought in LA, Wasserman educated the young collector in the intricacies of Burgundy. “He would call me regularly for buying advice and insights into producers, vineyards and vintages. He was avid for information and I was an excellent source for him,” Wasserman told Vanity Fair. 

Defending himself on wine writer Mike Steinberger’s Wine Diarist website, Wasserman denied any knowledge of Kurniawan’s counterfeiting activities and apologised for “any unwitting role” that may have contributed to the scandal. Wasserman claims he and the now 35-year-old Kurniawan fell out at the end of 2008. Having been indicted by a federal jury in New York on 9 May, details emerged about Kurniawan’s counterfeiting methods. 

Known for asking for the empty bottles of the old and rare wines he drank at Cru restaurant in New York, Kurniawan had been refilling the bottles with blends he made from lesser wines, including large quantities of négociant Burgundy from the ‘50s and ‘60s, many of which were bought from Beaune-based merchant Patriache. “Rudy emptied the cellar of Patricache,” a French merchant told VF, adding, “He had a certain respect for the product; you might say he was a gentleman thief.” Ponsot believes 80% of pre-1980 Burgundy being sold at auction today is fake.

According to Mike Steinberger, author of the Vanity Fair article, Kurniawan’s arrest raises uncomfortable questions for John Kapon, head of auction house Acker Merral & Condit. “Kurniawan played a central role in Acker Merral’s rise, and much of the discussion among industry insiders has focused on Kapon’s part in the scandal,” Steinberger wrote. In April 2008, 97 bottles of Domaine Ponsot belonging to Kurniawan were withdrawn at the last minute by Kapon from an Acker auction at Cru in New York.

Among the lots was a bottle of 1929 Ponsot Clos de la Roche, a grand cru the domaine didn’t produce under its own label until 1934, and 38 bottles of Ponsot Clos Saint-Denis from 1945 to 1971, despite the estate not making the wine until 1982. Ponsot had flown in from France especially for the auction, believing he needed needed to be in the room in order to prevent their sale. 

The 58-year-old proprietor admitted to Steinberger that he felt “a bit of glory” at the fact that Kurniawan deemed his wines worthy of counterfeiting. “You don’t copy Swatch. You copy Breitling and Rolex,” he said, though conceded that the fraud felt like “an attack on the terroir and spirit of Burgundy.” Kurniawan faces up to 80 years in prison. He pleaded not guilty at his arraignment on 23 May. 

Koch to revive fake Jefferson wine case

Billionaire William Koch has asked a US appeals court to revive a lawsuit against Christie’s in which he accused the auction house of fraud over the sale of wines allegedly owned by third American President Thomas Jefferson. As reported on db.com, on Wednesday, a federal appeals court panel in New York questioned whether Koch had conducted timely due diligence when doubts were raised about four bottles of 1787 Château Lafite engraved "Th.J" that were sold to him in 1987 by German wine dealer Hardy Rodenstock for $500,000.

US district judge Barbara Jones threw out Koch’s lawsuit against Christie’s last March, ruling that his claim of fraudulent concealment was barred by the statute of limitations – an enactment that sets the maximum time after an event that legal proceedings based on that event may be initiated. Koch, the founder of Oxbow Group energy company, appealed the decision, saying that Rodenstock and the long time head of Christie's wine department, Michael Broadbent, were associates in the purported fraud.

Christie's fought the lawsuit, arguing that Koch falsely claimed he did not learn about credible issues of the authenticity of the wine until 2005. Much of the questioning focused on the statute of limitations and the timeliness of Koch's investigations into the wine. Koch, who is worth US$4 billion according to Forbes magazine, sued Christie's on the grounds that it had agreed to promote Rodenstock's reputation and sell his wines.

The lawsuit also said Christie's had lobbied The Thomas Jefferson Foundation at Monticello – Jefferson’s former home in Virginia, to vouch for the wine. The appeals court heard that a 1985 report by Monticello had raised doubts about the provenance of the wine and that there had been articles in the wine press in the early ‘90s reporting that no one had proven the wines were Jefferson's.

Koch's lawyer argued that the lawsuit should be allowed because more details had been revealed in a Monticello report from 2005, including the fact that Jefferson ordered an entire year's supply of wine in a single purchase. The orders from 1787 to 1792 were intact and none reflected purchases of the "Th.J" wine. The court did not immediately issue a ruling, but will give a written opinion at a later date. Koch has previously sued American auction houses Zachy’s and Acker Merrall & Condit, and German wine dealer Hardy Rodenstock for fraud.