A California wine dealer who at one time boasted of having one of the most extensive personal collections of Bordeaux and Burgundy in the world was arrested Thursday on charges he tried to sell dozens of bottles of counterfeit wine at New York City and London auction houses.
Manhattan federal prosecutors accused Rudy Kurniawan, once a high-flying collector whose reputation had taken a hit in recent years, of twice trying to dupe the auction houses with what he claimed was rare-vintage wine.
Mr. Kurniawan's attorney, Luis Li, said his client would be released on bail and confined to his Los Angeles home until a hearing to determine his extradition to New York. "We're in the process of evaluating the charges," Mr. Li said.
A well-known player in the wine world after a several-year stretch in which he spent a reported $1 million a month on rare vintages, Mr. Kurniawan also said he was an expert in spotting counterfeit wine, according to a criminal complaint and published reports. In 2006, Mr. Kurniawan, who is believed to be 35 years old, sold part of his collection at an auction, grossing $35 million.
But other enthusiasts began viewing him with suspicion after noticing discrepancies on the labels and other details of the bottles he supplied. Billionaire William Koch has sued Mr. Kurniawan, claiming he sold him fraudulent wine.
Prosecutors allege he was mired in debt, fraudulently obtaining millions of dollars in loans in 2008. Between 2006 and June 2011, Mr. Kurniawan spent more than $16 million on his American Express card on clothing, jewelry, travel and wine, the lead FBI agent James Wynne wrote in the complaint.
Connoisseurs became suspicious of Mr. Kurniawan in 2008 after he tried to put up for auction 84 bottles of what he said was Domaine Ponsot Burgundy. The wine was expected to fetch more than $600,000 through the Acker Merrall & Condit auction house.
A representative of the auction house couldn't be reached for comment.
Many of the bottles Mr. Kurniawan were purported to be Clos St. Denis and bottled between 1945 and 1971, according to the complaint. At the last minute, however, the wine was pulled from the auction after the Domaine Ponsot administrator told auction house that wine wasn't produced from that vineyard until 1982.
At the time, Mr. Kurniawan said that he had been duped.
The incident cast a shadow of doubt over Mr. Kurniawan. The notoriety, the criminal complaint states, caused auction houses to stop accepting his wines. This allegedly forced Mr. Kurniawan to recruit a "straw seller," the complaint states.
At London auction last month, Mr. Kurniawan is alleged to have tried to sell at least 78 bottles of wine purported to be Domaine de la Romanee-Conti through a third party. That wine was expected to sell for $736,000, according to the complaint.
That was halted after members of an Internet wine-appreciation bulletin board raised questions about the collection.
The foil around the cork was unlike the foil on authentic Domaine de la Romanee-Conti bottles, and the labels on some bottles purporting to be from 1959 to 1971 included an accent mark that wasn't on the genuine bottles until 1976. The discrepancies were brought to the attention of the auction officials, who brought in officials from the wine company. They confirmed that the bottles were counterfeit, the complaint states.
According to the complaint, Mr. Kurniawan also is alleged to have committed financial frauds.
In January 2008, he obtained a loan for $3 million from a New York City bank but failed to list on his loan application that he had personal debts totaling more than $11 million at the time, prosecutors allege.
He had pledged 25 works of art to obtain that loan. In May 2008, he illegally "double-pledged" 18 those same artworks as security for millions of dollars in loan he owed to a New York auction house, the complaints states.
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