Wine Fraud: Buyer Beware — A Post by Natalie Berkowitz

The following is a post by Natalie Berkowitz, author of The Winemaker’s Hand: Conversations on Talent, Technique, and Terroir

Obsessed individuals with deep pockets bitten by the collecting bug willingly spend a fortune on rare treasures to display their affluence. Insatiable acquisitiveness and eagerness to flaunt their trophies are a subtle form of “look at me.” Stratospheric prices confer immense cachet on the object and to its owner, but it takes an unfortunate negative turn. Con artists can smell a mark and will engage in their tricks of the trade: fraud, forgery, misrepresentation, and counterfeiting.

Even though wine fraud plays second fiddle to more sensational examples of art fraud, scams involving wine have been known to run into the millions of dollars. Beginning in the early 2000s, demand and prices for the rarest wines shot up rapidly, as did the potential payoff from selling fakes. The idea of owning a prestigious historical bottle created a frenzy among potential collectors. Covetous wine lovers, some who are connoisseurs and others who collect rare bottles for prestige, compete to buy cult wines, rare vintages, and famous labels. Wine collectors who covet particular vintages and notable producers suspend credulity, seduced into believing they achieved their heart’s delight when in many cases they paid outrageous sums for fraudulent wine.

Wine deception abounds. It can start on the most basic level at a winery when a harvest goes awry and fails to produce high quality grapes. Some less-than-honest vintners adulterate a poor vintage, adding wine from a previous crop or from different wine regions. Coloring agents or wines with stronger color are used to deepen pallid wines. Some wines are adjusted for the tastes of certain markets.

Fraud can also occur at the seller level when unscrupulous merchants fill old bottles of rare provenance with new wines sold as the genuine article, complete with counterfeit labels that provide assurance to buyers. Even if the new owner decides to uncork the bottle and taste the contents, who knows what a two hundred year old wine tastes like?

Con artists developed a successful formula for counterfeiting wine. Collect a cachet of old bottles by buying great wines at restaurants and taking home the corks and bottles as souvenirs with labels in good condition. If that’s not an option, a duplicating machine and a little skill in making a new label look old works. Sand the vintage date from the cork. Carefully reprint a new date onto the old cork to match the label. Blend vin ordinaire with old or even excellent wine that costs only a couple of hundred dollars. Recork the bottle and add a capsule, and Voila! An ordinary wine has now gained an impeccable prestige.

One notorious scam included many famous labels, including a cachet of old Bordeaux purportedly belonging to Thomas Jefferson found in Paris in the 1980’s. As American envoy to France, Jefferson developed a love of wines from top chateaux in Bordeaux and became an ardent collector of French wine but worried about the common practice at the time of adulterating wine. He ordered directly from owners of his favorite chateaux, Lafitte, D’Yquem and Haut Brion to insure the quality of the cases he was sending to George Washington and to his home at Monticello.

Hardy Rodenstock, a German collector who endeared himself to well-known celebrities, writers, and connoisseurs of the wine world, sold four of the Jefferson bottles to the billionaire Bill Koch, who over several years, spent $2.1 million on wine. The bottles turned out to be a fraud.

The Jefferson imprimatur made the sales easy to accomplish. No one knew what a 200 year-old wine tasted like, and more than likely, the bottles would remain as unopened trophies. Even so, Koch became suspicious and hired a team of detectives. A new test proved the wine was new and the “Th J” initials might have been incised with a dental tool. Koch sued Rodenstock and launched a multi-million-dollar campaign to combat what he believed was a flood tide of counterfeits.

A more recent case involved Rudy Kurniawan considered this century’s most notorious perpetrator of wine fraud. In 2012, he was arrested indicted and convicted for selling counterfeit wine at auction. The thirty-year old built a reputation as a charming, debonair wine connoisseur, spending immense sums entertaining friends in restaurants, taking home empty bottles of expensive wine and their corks as souvenirs, impressing everyone with his knowledge and excellent palate. (Who knows if he really tasted what he described? Wine lingo slips easily off the tongue.) He became famous for his ability to find some of the rarest, most expensive wines in the world, and eventually made a fortune passing off fakes of great wines, including several Jefferson bottles.

His successful run ended when police raid found his computer loaded with scanned images of old wine labels, stacks of rare French wine labels Kurniawan allegedly forged on a laser printer, and historic bottles, among them bottles supposedly from Thomas Jefferson’s cellar. Prosecutors labeled him as a fraud who duped some of the country’s wealthiest wine collectors passing off young wines blended with commonplace older wine in his kitchen. Kurniawan was sentenced in August of 2014 to ten years in prison, fined over $20 million dollars, and ordered to pay a similar amount in restitution to former clients.

Questions remain about a bond between the con artist and an avaricious, gullible mark. What provokes someone, even with unlimited resources, to pay six figures for a single bottle of wine that may never be tasted, but rather bought as an investment for future sale … or for prestige? The lesson to be learned? Caveat emptor.