Aug. 7 (Bloomberg) -- Rudy Kurniawan, who swindled wealthy wine collectors including billionaire William Koch by selling them more than $20.7 million in fake French vintages created in his home kitchen, was sentenced to 10 years in prison.
U.S. District Judge Richard Berman in Manhattan imposed the sentence today, saying Kurniawan, 37, failed to accept responsibility from his crimes. Berman ordered Kurniawan to forfeit $20 million -- including real estate, art, jewelry and wine -- and to pay an additional $28.4 million to those who’d purchased purportedly rare French wines he concocted and bottled at home.
Kurniawan’s scheme was “a bold, grandiose, unscrupulous but destined-to-fail con,” Berman said. “The public at large needs to know that our food and drink are safe and that what’s on the label and is not some potentially unsafe, homemade witches brew.”
Jurors convicted Kurniawan in December of mail and wire fraud. Prosecutors urged that he be jailed for 14 years for cheating collectors, auction houses and others from 2004 to 2012. Agents searched Kurniawan’s home after his arrest and found a laboratory for creating fake wines that included corks, bottles and printers to fabricate labels, prosecutors said.
Kurniawan operated in assembly-line fashion from his home in the Los Angeles suburb of Arcadia and was “the kingpin of counterfeiters,” Assistant U.S. Attorney Stanley Okula said. “At the end of the day, the defendant carried out a grand con and he should be punished.”
Kurniawan apologized to the court and asked to be allowed to go home to California to care for his ailing mother.
“I am really sorry,” he said.
Kurniawan’s lawyer, Jerome Mooney, sought a sentence of 2 1/4 years, representing the time Kurniawan has served in U.S. custody since his 2012 arrest. Kurniawan is the first person in the U.S. to be prosecuted for selling fake wines and his crime should be viewed in perspective, Mooney said.
“Nobody died here,” Mooney said. “Nobody lost their savings, nobody lost their job, nobody was rendered devoid of the things they needed for their life.”
Prosecutors last month said investor losses totaled more than $30.5 million. Among the victims was Andrew Hobson, chief financial officer of Univision Communications Inc., who paid about $3.1 million for bottles that were almost all fake or couldn’t be authenticated, prosecutors said.
Another victim was David Doyle, co-founder of Quest Software Inc. and owner of the Rockpool Bar and Grill in Sydney. Doyle paid $15.1 million and transfered an Aston Martin vehicle for purported wines that included a 1947 Chateau Cheval Blanc, prosecutors said.
At least 1,590 bottles -- worth more than $19 million if genuine -- were fakes, Doyle’s estate manager said in a memo to the judge, citing a wine authenticator.
George Stamboulidis, Doyle’s lawyer, said after court that this “first-of-its-kind criminal prosecution” signals “federal law enforcement’s resolve to pursue wine counterfeiters.”
Koch was among the first wine collectors to publicly declare he’d been swindled by Kurniawan. He testified during the trial that he lost about $2.1 million on purchases of about 219 bottles that purported to be Chateau Petrus and Domaine de la Romanee-Conti.
Koch, the brother of billionaire energy executives Charles and David Koch, has waged a legal fight against counterfeiting and hired more than a half dozen experts to find fakes in his 43,000-bottle cellar, he said. Last month, he settled a civil lawsuit against Kurniawan, Mooney said.
Kurniawan’s fakes have infiltrated the wine market and may be sold at auctions for decades to come, prosecutors said.
The government has won Berman’s approval to seize all Kurniawan’s property, including art by Damien Hirst and Donald Judd, luxury watches worth more than $550,000 and a $33,6000 south sea pearl necklace.
The trial included testimony from three French winemakers who traveled to the U.S. to testify for prosecutors.
The case is U.S. v. Kurniawan, 12-cr-00376, U.S. District Court, Southern District of New York (Manhattan).
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