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March 23, 2015 By James Duren

Imagine the shock: That priceless vintage you acquired for your cellar – the one which induced the admiring glances of some of the richest men in America – is a fake, a sham. You’re left with a worthless bottle of wine. Meanwhile, somewhere in the world, a criminal is using his sterling reputation to cloak a rather nefarious empire of false superwines whose fabricated-but-veiled provenance makes even the wisest investors drool. Whether for personal satisfaction or a desire to fit in among the wine world’s elite, these high-class crooks make a living by shearing the dickens off wooly wine lovers.

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The names Rodenstock and Kurniawan stand out in the history of wine fraud for their infamous dealings in the same way a wild-child heir stands out in the lineage of a well-to-do family – frustration and anger follow them, punctuated by the words no doubt uttered by many a vintage maven, “How could this happen?”

Hardy Rodenstock, a European businessman and wine collector, was implicated in a variety of wine-fraud schemes relating to extremely rare vintages but was never convicted in the courtroom. Rudy Kurniawan, on the other hand, felt the swift hand of justice this year when a United States District Court Judge sentenced the 37-year-old wine collector to 10 years in prison and required him to pay a sum of nearly $50 million dollars – $28.4 million to his victims and $20 million in punishments, The Wall Street Journal reported. The young fraudster used a system of stamps, corks, labels and his palate to make ho-hum wines look and taste like high-value heavyweights. The two fraudsters were able – for a time – to fool some of the sharpest minds in the auction world, not to mention some very wealthy men in the United States and abroad. Other wine fraud schemes have made headlines in the past year – Italian officials foiled an attempt to release 220,000 bottles of Brunello di Montalcino into Italy’s wine market, a scam which would’ve netted a handsome amount of cash. However, few schemes have been able to match the scale achieved by Rodenstock and Kurniawan.

Heroes are Villains, Villains are Heroes

Author Benjamin Wallace is well known for penning The Billionaire’s Vinegar: The Mystery of the World’s Most Expensive Bottle of Wine, in which he mined the dubious depths of Hardy Rodenstock’s grand deception. The book centers on Rodenstock’s bottle of 1787 Chateau Lafite, supposedly signed by Thomas Jefferson and which was the envy of wine collectors the world round. Wallace said the reason wine fraud is such a fascinating topic is that, in many cases, it’s hard to tell the heroes apart from the villains.“The hero-villain split is less clear than in a lot of stories,” Wallace said in an interview this past December. “The people who get duped are very wealthy people who, perhaps, are not all interested in wine beyond wine as a status symbol and they’re not as sympathetic as other victims.”In a world where the well-to-do play the kings and the crooks play the sneaky scoundrels, the sympathies of the public often lie with the scammers and not the scammed. “People admire the creativity of the dupers,” Wallace said.

Motivation Behind the Machinations

It is common sense to imagine that, in a world where millions of dollars change hands over the accuracy of dates, names and small details, fraudsters would think twice – or perhaps three or four times – before embarking on their fateful voyage of villainous deception. However, Wallace said, personal motivation – whether the satisfaction of swindling the rich or the satiating power of social acceptance – can cloud common sense. “For these guys, it’s more psychological,” he said.

Wallace observed that Kurniawan’s shenanigans were the result of a desire to be accepted by his peers in the wine world.“In the case of Rudy Kurniawan, he said he did it out of social insecurity,” he said. “He wanted to be accepted by this group of guys.” While Kurniawan came clean about his motives, Rodenstock never admitted why he did what he did, Wallace said. In fact, he never confessed to doing what he was alleged of doing. “In the case of Hardy Rodenstock, he’s never admitted to it and he’s never been prosecuted, so you can only speculate,” Wallace said. “I always felt there was some part of him that took glee in the fact that he put one over on these wealthy, powerful people. He got a kick out of it.”

How Did This Happen?

As with every good fraud, the target has to be vulnerable. In the case of Rodenstock’s fraud, the rare wine arena was rife with opportunities for deception. “A lot of the wines they were fabricating dated to a period where there wasn’t a ton of record keeping,” Wallace said. “Especially in Rodenstock’s case – he was finding wines from an era where there was a lot of irregularity in wine production and packaging.” For instance, Wallace pointed out, single bottles of wine from a particular estate often had different bottles and different labels because vintages were, in some cases, stored in barrels and then sold by wine merchants to a variety of people who didn’t use uniform bottling and labeling techniques.

“Nobody could prove what a bottle was just by appearance,” Wallace said. Furthermore, Rodenstock and Kurniawan sweetened the proverbial pot by hosting extravagant wine tastings where wine journalists, collectors and movers and shakers were treated to unbelievable tastings. “They would throw these lavish, comped tastings that were hard for the critics and auction heads to turn down because the (tastings) were opportunities to try wines they weren’t able to try,” Wallace said. “When suspicions arose, the people who you’d think would be the watchdogs were already compromised.”

The Future: Fraught With Crooks?

In addition to the Italian wine scam, 2014 saw Chinese authorities bust a ring of counterfeiters and Napa Valley devotees woke up on Christmas day to find that dozens of bottles of wine were stolen from world-famous eatery The French Laundry. The myriad of crimes – whether smash and grab or subtle and smooth – lead wine investors and wine lovers to wonder how wine fraud will evolve in the future.Wallace believes rare-wine scams are on the way out. “I do think it will become less likely the Rodenstock- and Kurniawan-types of fraud can be pulled off,” he said. “(It’s) the reality that the old stock of old wine has been drank and has aged out of maturity and into spoilage. Those types of fraud will become harder and harder.” New anti-fraud technologies are starting to appear, but these measures are used for wines whose price tags now and in the future are in a stratosphere where only the most wealthy oenophiles and investors can journey. Legendary Cabernet producers Screaming Eagle equip their bottles – 2010 and newer – with a “bubble coded security system which enables the verification of authenticity,” the winery’s website said. The security label is placed between the foil and the bottle “creating a security seal that cannot be detached without the seal and foil being visibly damaged.”

Other chateaus place transponder chips in their bottles, Wallace said, noting that the move toward bottle-by-bottle security is a sort of arms race to combat fraudsters. However the greatest danger to the security of the world’s most valuable wines aren’t the crooks, Wallace said – it’s the wine buyers themselves. “There’s always a new group of people who are more ignorant,” he said, “and more driven.”

Read more: http://www.snooth.com/articles/counterfeit-wine-china/?viewall=1#ixzz3VJxWzqhH

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