Three types of wine fraud

Wine fraud evidence © Getty images
Evidence from the trial of Rudy Kurniawan

In May this year, a case of 12 bottles of the semi-mythical 1988 vintage Romanée-Conti was put up for auction with an estimate of £140,000. That works out at a heady £11,666 a bottle, so it’s little wonder the wine was a favourite of wine forger Rudy Kurniawan (see below). But producing fakes isn’t the only type of wine fraud out there as these recent examples show.

The boiler room scam

In a twist on the classic boiler room scam, 30-year-old Jonothan Piper cold-called potential victims offering to take control of their wine portfolios, and charging “eye-watering” fees, The Times reports. Piper, the sole director of Embassy Wine UK, then sold off their wine collections and used the money to fund a lifestyle of fast cars, champagne and drugs.

Five victims have so far come forward, having lost a combined £300,000, including retired head teacher, Hilary Cooper, who was defrauded out of £137,225. In addition, £51,104 is owed to the taxman in unpaid income tax. Piper was sentenced to five years in jail on Monday.

The Ponzi scheme

American John Fox ran a Ponzi scheme for several years, before filing for bankruptcy in early 2016, owing $45m to 9,200 creditors. Fox set up Premier Cru in 1980, a business offering discount prices on famous wines, bought on “pre-arrival”. That meant the bottles had been bought, usually abroad, but had yet to arrive in the company’s California warehouse – a process that, because the wines came from other brokers and secondary dealers on the “grey market”, could take years.

Eventually, customers grew tired of waiting and asked for their wines. Fox covered their orders using money from new, explains Michael Steinberger in Bloomberg Businessweek. But things started to unravel in the wake of the financial crisis and a string of poor Bordeaux vintages from 2011, which dented demand. Yet, Fox continued to spend on cars and women he met online, quickly maxing out his credit cards. A bankruptcy auction was held late last month for the remaining 71,000 bottles in the company’s warehouse, but many customers will have to go without.

The fakes

Rudy Kurniawan, the “world’s biggest wine forger”, started small, says Ed Cumming in The Observer Magazine. A natural charmer, who claimed to be from a wealthy Sino-Indonesian family, with a self-proclaimed “palette of rare finesse”, Kurniawan’s standing in the Los Angeles wine community grew until he was a major player at wine auctions. In fact, he “bought so much Domaine de la Romanée-Conti, he became known as ‘Dr Conti’, which presumably later amused some of those he defrauded”. At one auction in 2006, Kurniawan sold a record $24.7m of wine.

Unbeknown to his victims, Kurniawan was pouring cheaper wine into expensive bottles. He got away with it because there were few who could claim to have drunk the most expensive wines. If you had a generous host, says Cumming, “it is poor guestmanship to lob aspersions on any proffered bottle, let alone one that cost as much as your car”.

But Kurniawan got sloppy. Wine maker Laurent Ponsot was surprised to find vintages of between 1945 and 1971 of his family’s Clos St Denis. The wine was first made in 1982. Then billionaire Bill Koch found fakes in his collection and hired private detectives to investigate. Kurniawan was rumbled. In 2014, he was sentenced to ten years in jail. The story is the subject of a new documentary, Sour Grapes, by Briton Jerry Rothwell and American Reuban Atlas, released last Friday.