See both sides of the debate as to whether the recent case and subsequent jailing of wine fraudster Rudy Kurniawan has damaged trust in the fine wine market, as featured as the 'burning question' in the Decanter October 2014 issue...

One of the biggest wine fraud scandals in history has seen Rudy Kurniawan sentenced to 10 years in a US prison and ordered to pay $28.4m to compensate victims he duped into buying cheap, homemade copies of world-famous wines.

Federal district judge Richard Berman also ordered the 37-year-old Indonesian to forfeit $20m in assets to the court. He called Kurniawan’s crime a ‘bold, grandiose, unscrupulous but destined-to-fail con’.

Some have dismissed the entire case as a matter only for the rich and gullible. Others fear that the self-styled Dr Conti was so prolific behind the foil-covered window of his Los Angeles kitchen that his legacy will not be contained by even the thickest prison cell walls.

FBI agents found stacks of labels, corks, capsules and bottles when they arrested him at home in 2012, by which time Kurniawan had been selling wines for several years.

‘The effects of this crime are likely to be felt for decades as fake bottles of wine made by Kurniawan continue to exchange hands through wine auctions and direct sales,’ prosecutors said when calling for a maximum prison term of 14 years.

Is it possible, too, that the Kurniawan case has had a psychological impact on the fine wine market, beyond the physical number of his fakes still lurking in cellars? Kurniawan’s own defence team arguably helped to propel this idea by warning that the Indonesian was just one player in a bigger counterfeiting scene.

Decanter and Decanter.com columnist Andrew Jefford described the Kurniawan scandal as the ‘end of innocence’ in the fine wine world. ‘The provenance trail will become essential for any traded fine wine,’ he wrote. Has Kurniawan’s heist weakened the bond of trust between buyers and sellers of old and rare vintages?

Yes

‘Many people have given up on old and rare wines or buying at auction altogether,’ said Maureen Downey, of Californiabased Chai Consulting and a wine authentication expert who has inspected Kurniawan wines for several clients, including US billionaire Bill Koch. ‘They simply do not trust the system that dumped all the wines onto the market.’

There is a lost generation of fine wine buyers with a skewed idea of what old vintages should look like, because Kurniawan made his bottles so pristine. ‘Rudy’s wines are in ridiculously good shape for their age,’ she said. ‘As a result, the entire nascent Asian market, and all the US collectors who have only really gotten into old and rare wines in the past 12 years, incorrectly expect old wines to look new, unblemished and shiny with high fills, dark colour and youthful corks.’

‘His sentence should have been longer,’ said Geoffrey Troy, president of New York Wine Warehouse and one of the first people to become suspicious of Kurniawan several years ago. ‘He is responsible for doing an incredible amount of damage to the fine and rare wine market. Fortunately, the FBI got him.’

No

‘We all feel terrible for those collector-investors who lost significant sums as a result of that fraud,’ said Frank Martell, wine director at Heritage Auctions in California. ‘That said, it’s important to remember that it is a relatively small percentage of the wine world that has been affected.

‘I can’t say that here at Heritage we have experienced any measurable hit in faith or confidence from our client base. What we are seeing is that wines with demonstrable provenance are worth much more than they were.

‘Heritage is pretty quick to reject wines that don’t come from a known and trusted source,’ he added.

Richard Harvey MW, of London-based auction house Bonhams, said greater awareness is one the benefits to emerge from media coverage of the Kurniawan case. ‘People are now much more aware of fakes and what is likely to be a fake. Buyers ask us a lot of questions on provenance of cases like the Latour 1961 magnums we recently sold.

‘People are perhaps more circumspect, but to say it has ruined trust would be too much,’ added Camilla Bowler, buyer at UK merchant Fine & Rare.

Written by Decanter