Preet Bharara, the U.S. attorney for the southern district of New York, announced that prominent wine dealer RUDY KURNIAWAN was sentenced to 10 years in prison for carrying out an elaborate scheme in which he manufactured and sold counterfeit bottles of purportedly rare and expensive wine for millions of dollars, and for fraudulently obtaining a $3 million loan from a financing company. KURNIAWAN was found guilty in December 2013 following a one-week jury trial before U.S. District Judge Richard Berman, who also imposed the sentence.
Bharara said: “Rudy Kurniawan planned and executed an intricate counterfeit wine scheme, mixing cheaper, more common wines, bottling the mixture into old bottles with fake labels, and then fraudulently selling those bottles for millions of dollars. Now, Kurniawan will trade his life of luxury for time behind bars.”
According to the evidence presented at trial, documents filed in Manhattan federal court, and statements made at the sentencing proceeding:
KURNIAWAN had been a collector of fine and rare wines, and rose to become one of the most prominent and prolific dealers in the United States of purportedly rare and expensive wine. From 2004 through 2012, he engaged in a systematic scheme to defraud wine collectors and others by selling and attempting to sell numerous counterfeit bottles of purportedly rare and expensive wine. KURNIAWAN manufactured counterfeit bottles of rare and vintage wine at his home in Arcadia, California, operating what was, in effect, a counterfeit wine laboratory.
KURNIAWAN mixed and blended lower-priced wines so that they would mimic the taste and character of rare and far more expensive wines. He then poured his creations into empty bottles of rare and expensive wines that he obtained from various sources and created a finished product by sealing the bottles with corks and outfitting the bottles with counterfeit wine labels he created. KURNIAWAN then sold and attempted to sell these counterfeit bottles of wine at auctions and in direct sales to wealthy wine collectors. KURNIAWAN earned millions of dollars through the sale of these counterfeit bottles of wine.
KURNIAWAN also devised and carried out a scheme to fraudulently obtain a $3 million loan from a financing company located in New York City that specialized in extending loans that are secured by valuable collectibles, such as art and wine. KURNIAWAN obtained the loan by providing false information to, and concealing material information from, the financing company, including falsely omitting approximately $7.4 million in outstanding loans, falsely representing his annual expenses, and falsely representing that he was a permanent resident of the United States when he had no legal immigration status in the United States and had, in fact, been ordered by an immigration court to leave the country years earlier.
In addition to the prison sentence, KURNIAWAN, 37, was ordered to forfeit $20 million and to pay restitution to his victims of $28,405,502.