Indonesian wine dealer had history of heavy debt, New York fraud trial told
Prosecutors say Indonesian illegal immigrant had kitchen laboratory producing fake vintages
An Indonesian wine dealer on trial in New York for selling counterfeit wine was millions of dollars in debt in the years before his arrest, prosecutors told his fraud trial.
Rudy Kurniawan, 37, who has lived illegally in the United States since his asylum bid was rejected in 2003, is accused of blending ordinary wines into fake vintages in his kitchen to sell to collectors.
On Tuesday the court in Manhattan was shown photographs of his alleged wine "laboratory" at his suburban Los Angeles home, where he lived alone with his Chinese mother. The place was covered with bottles at all stages of production and there was a "drying zone", according to FBI agent James Wynne, who carried out the raid during Kurniawan's arrest in March last year.
Five years earlier, the man nicknamed "Dr Conti" for his love of Romanee-Conti, the fine burgundy, was considered one of the five top wine collectors in the world, but he owed creditors millions of dollars, prosecutors told the second day of his trial.
That autumn he applied for a US$3 million loan without saying he was already more than US$10 million in debt, said witness Barbara Chu, a banker at Emigrant Bank Fine Art Finance.
"He said he needed to bridge the payments he received from his family and he wanted to create a new wine company," she told the federal court in Manhattan.
To get the loan, Kurniawan put up as collateral 24 works of fine art estimated to be worth more than US$6 million.
Chu's financial services company contacted a specialist who described Kurniawan as "a very large collector of wine … one of the top-five wine collectors in the world", she said.
But after Fine Art made him the loan, it was "approached" by lawyers of New York auction house Acker Merrall & Condit, with whom Kurniawan sold wine for US$35 million several months earlier. Fine Art discovered that Kurniawan had borrowed US$8 to US$9 million from the auction house and some clients, which, added to interest and other small loans, came to more than US$10 million.
Fine Art, which in early 2008 cleared US$2.5 million for Kurniawan, ordered him to auction off his art work, which included pictures by Andy Warhol and Damien Hirst.
Its funds were then repaid in the spring of 2009.
"You didn't lose a penny," said defence lawyer Vincent Verdiramo. Chu acknowledged that was the case.
Kurniawan is accused of postal fraud by selling fake vintage wines and of wire fraud by fraudulently obtaining the loan. He faces up to 40 years' jail.
The case involves an alleged attempt by Kurniawan to sell 97 bottles of acclaimed wine in 2008.