Wednesday, May 26, 2021

Big Money: "The man who sold millions in counterfeit wine to rich collectors"

From The Hustle, May 22:

In the early 2000s, a new face appeared in America’s elite wine circles.

Rudy Kurniawan was secretive about his past. But the gregarious 20-something quickly made his name known by throwing lavish tasting parties attended by Hollywood producers, wealthy bankers, and tech titans.

Kurniawan seemed to have boundless cash and a knack for finding extremely rare vintage bottles that lifelong oenophiles had only ever dreamed of — 1920 Petrus, 1945 Romanée-Conti, 1947 Château Lafleur.

In a few short years, he would sell off millions of dollars’ worth of his wines to some of America’s wealthiest connoisseurs.

But behind the ever-flowing stream of Burgundies, Kurniawan harbored a dark secret: He was carrying out history’s greatest wine fraud. 

And it would take a vengeful billionaire, a French vintner, and the FBI to get to the bottom of the barrel. 

The new kid on the block

Little is known about Kuniawan’s early life.

Born Zhen Wang Huang in Jakarta, Indonesia, in 1976, he came to the US on a student visa in the mid-’90s to study accounting at Cal State Northridge.

By 2001, he’d settled in the Los Angeles suburb of Arcadia and developed an obsession with California wines.

Using money he’d supposedly sourced from his wealthy family, he soon turned his attention to expensive French wines — particularly those from the region of Burgundy.

In the early 2000s, Burgundies weren’t wildly popular in the US. But Kurniawan seemed to sense an opportunity for market growth.

He learned all he could about the wines, talking up shop owners, snatching up 100s of bottles, and keeping detailed tasting notes.

“His average bottle price was probably $400 to $500 per bottle,” Kyle Smith, a Los Angeles shop owner who sold Kurniawan wine, later told documentary producers. “He probably bought $500k [of wine] in the first year.”

Kurniawan’s deep pockets gained him entry into the most prestigious tasting group in Los Angeles: a cadre of prominent, wealthy men — Hollywood directors, music executives, tech entrepreneurs, and real estate tycoons — who called themselves the “BurgWhores.”

Kurniawan wasted no time establishing himself as the leader of the pack.

He began to frequent auctions all over the country, spending as much as $1m/month on wine, according to various news reports. During bidding, he’d thrust his paddle up in the air and leave it hoisted until he won. The price seemed inconsequential.

And Kurniawan liked to share his hauls.

At tasting parties, it wasn’t unusual for Jurniawan and his friends to drink through $100k-$200k worth of wine in a single night.

A 2006 profile in The Los Angeles Times titled “$75,000 a case? He’s buying” described Kurniawan as a “young, hip” extraordinaire who’d “upped the industry ante” with his buying power and hobnobbing.

“Auction houses were giddy,” the article’s author, Corie Brown, later recalled in Sour Grapes, a documentary about Kurniawan’s plight. “No one had ever spent that much money that fast.”

Kurniawan was introduced to the “12 Angry Men,” a group of wine lovers with “fuck you” money who dined out at fine NYC restaurants, regularly racking up 6-figure bills.

When asked about the source of his money, the enigmatic collector was vague. And after each dinner, he’d request to keep the empty wine bottles.

To his new companions, this was strange behavior. But as long as the vino was flowing, nobody seemed to care.

A seller’s market

By 2006, Kurniawan, then just 30, had amassed a personal cellar so robust that the Calgary Herald declared him the “King of rare wines.” To others, he became known as “Dr. Conti” — an homage to his favorite wine, Domaine de la Romanée-Conti.

In a few short years, he’d gained the trust and respect of some of the nation’s foremost wine critics, scholars, collectors, and buyers.

But more importantly, he’d played a central role in drumming up hype around vintage wines.

According to a 2006 report from Wine Market Journal, the average price of a vintage wine bottle sold at auction increased by 62% between 2001 and 2006. During the same time period, worldwide wine auction sales ballooned from $90m to $300m.

Burgundies, in particular, were a hot commodity: Bottles that sold for $400 just a decade earlier were now courting bids for $13k. 

Kurniawan decided it was time to sell....