If you want to know the power of one man to mess up an entire market, look no further than Rudy Kurniawan.
Kurniawan, a native of Indonesia, moved to the U.S. in 1998 to attend college in southern California. He became interested in wine at a dinner a few years later and soon after joined the wine tasting circuit in the Los Angeles area.
He quickly gained legendary status for his tasting skill, and in 2002 he started buying large quantities of wine. He graduated from California wines to French wines. He favored Burgundy — a popular wine with collectors and investors.
Rudy was renowned for his lavish tasting parties and well-stocked cellar. He made powerful friends and joined the inner circle of wine investors across the United States.
Everyone thought Rudy Kurniawan was a trust fund kid from a wealthy Indonesian family — and he certainly acted the part. He bought an $8 million home, drove expensive cars, had an American Express Centurion Card and regularly splashed out on pricey dinners and wine tastings for his friends.
By 2006, Rudy was buying and selling rare French wines on a regular basis, reportedly spending up to $1 million a month.
At one auction, he was so determined to acquire a certain wine, he is said to have lifted his paddle in the air and kept it there until everyone else put theirs down, leaving him as the winning bidder.
So in 2006 — when he began selling wine from his collection at a brisk pace — no one questioned him… or the wine. Around the same time, he also secured large loans against his wine and art collections.
Everyone loved Rudy. But that was about to change…
His reputation was starting to crack.
In April 2007, some French wine Rudy was going to consign at a Christie’s auction was shown on the front cover of the auction catalog. The winemaker saw it and contacted Christie’s to inform them the bottles were fake.
In 2008: Same story, different auction house, wine and winemaker. This time, the vintage years were a dead giveaway — the winemaker hadn’t made that brand in the years stated on the label.
The bottles were pulled from the auction at the last minute. In an interview about the incident, Kurniawan said, “We try our best to get it right, but it’s Burgundy, and sometimes s*** happens.”
In 2009, Bill Koch (a brother of Charles and David) sued Kurniawan, claiming he knowingly sold Koch fake wine. That year Kurniawan also defaulted on a $10 million loan given to him by a major auction house in New York.
Nonetheless, it took a few more years for word to get around the wine community, which is known for its privacy and aversion to scandal.
Kurniawan’s house of cards finally collapsed in March 2012 when he was arrested and indicted on fraud charges. He was convicted in December 2013 and sent to prison. He has since appealed and been denied.
When Rudy is released in 2021, he’ll be deported to Indonesia. All the time he was dealing in fake wine, he was in the U.S. illegally. His application for asylum was rejected twice — in 2001 and 2003 — and he simply ignored the subsequent orders to leave the country.
Despite being behind bars, Kurniawan’s ghost still haunts wine investors…
Some wine experts estimate there could be as many as 10,000 of Kurniawan’s fakes still in private cellars.
To your wealth,
Editor-at-large, Unconventional Wealth
Steffi Baker is the editor-at-large of Unconventional Wealth. For the past 10 years, she worked with a small strategy consulting firm that dealt exclusively with wealth-management companies, helping them market themselves to ultra-high-net-worth clients.
Through this line of work, Steffi attended events in London and New York and hobnobbed with household names and international...