No One Knows What’s Real in the Collection of the World’s Best Wine Counterfeiter

If you've ever watched the CNBC show American Greed, which chronicles some of America's most dastardly financial crimes, you'll know that one of the most satisfying parts of every show is when they bust the bad guy. Sometimes the perp is running an elaborate investment scam; usually he's just overseeing a Ponzi scheme. When the FBI almost inevitably busts the fraud, they reclaim all the ridiculous crap he's been buying with other people's money, like jet skis, Louis Vuitton upholstered Bentleys, and other tasteless but expensive stuff.

Back when the FBI used to offer tours, if memory serves me right, they had a room full of some confiscated stuff that included a gold-plated motorcycle. Federal law enforcement agencies auction off confiscated items to repay the victims of fraud.

Now, a confiscated wine collection being auctioned by US marshals is causing a tumult in the wine world. Wine experts aren't sure if what's up for auction is authentic, and are concerned that the auction itself will perpetuate the crime of one of the world's great frauds.

One episode of American Greed featured Rudy Kurniawan, a wine collector guilty of perpetrating a massive wine scam. For years, Kurniawan bought up old wine bottles (in order to get period glass), relabeled them as legendary vintages from esteemed houses like Pétrus and LaFleur using painstakingly forged labels, filled them with a mix of lesser Napa pinots and some older French wines, and sold them at auction. And for a long time, he was successful, fooling experts and earning him a position as the toast of the wine world. His fakes—dating back as far as the 1930s, and even the mid-19th century—were successfully sold at auction at stratospheric prices. Buyers included noted wine enthusiast and billionaire investor Bill Koch, brother of investors and Republican activists Charles and David, who lost $2.1 million by purchasing fake bottles of Pétrus and Domaine de la Romanée-Conti. Kurniawan produced, seemingly out of thin air (or long lost cellars), so many legendary bottles of Romanée-Conti that he earned the nickname "Dr. Conti."

Kurniawan was eventually busted after Chateau le Pin alerted Christie's that a bottle of le Pin featured on the catalog cover for an upcoming auction of Kurniawan's wine was a fake. Kurniawan and his massive scheme were eventually uncovered, he was arrested, convicted, and jailed, and he's now serving a ten-year sentence.

The feds moved in to survey and clean up the damage, and they seized Kurniawan's Lamborghini, art collection, and wine collection. The wine collection could be worth considerable amounts of money, but there was one problem—they couldn't tell which wines were the real deal and which were fakes.

As Bloomberg Business reports, US marshals were given the job of separating the legendary Bordeaux and Burgundies from the bogus. The marshals spent more than a year trying to figure out what was real, but the process was criticized by luminaries in the wine world, who argued that the marshals' wine authenticator wasn't up to task. (Eventually, the authenticator was replaced.) From Kurniawan's personal stash, the feds identified 548 fake bottles, which will be destroyed by a front loader on Thursday. The remaining 90 percent of the bottles from the cellar, some 4,711 of them, are being sold at auction online, and wine collectors are worried that there still may be a considerable number of fakes among them.

"If Rudy Kurniawan had been caught making fake currency, the US government would destroy his work product," Bill Koch told Bloomberg Business.

Wine buyers fear that if forgeries make it back into the market, they will be sold as authentic for years to come, distorting the market and hurting buyers. Though the auction warns potential buyers of the bottles' provenance, some have suggested that any wines sold should feature a mark distinguishing that they came from Kurniawan. The feds think that what is being sold is genuine, noting that it comes from Kurniawan's private cellar. Kurniawan's lawyer told Bloomberg Business that his client spent at least $40 million on wine, so it's probably the real deal.

"There's no guarantee with 100-percent certainty, but to the best of our knowledge all of these wines (being sold) are genuine," said Jason Martinez of the US marshals' Asset Forfeiture Division.

Bidding has been mixed on the higher-end bottles, particularly ones Kurniawan was known to have faked. Lower-end bottles have fared slightly better.

"I wouldn't give you more than $500 if it came from Rudy," Joe Palmiotti, an owner of New York's Mission Fine Wines, told Bloomberg Business. Mission lost $2 million to Kurniawan's scam.

With so many wary, there may be the opportunity for some experts to score a deal from the auctions, which are active until December 15. Kurniawan's victims would probably advise steering clear.

Those victims, by the way, don't have much to look forward to, even if everything at the auction sells. The marshals expect to raise somewhere between $900,000 and $1,200,000, a far cry from the $29.4 million they are owed. They may want to open a nice red to drown their sorrows.