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Grapes of wrath — when $250 million in rare wine was set on fire
Nov 1, 2015
(NYPost) - It was a warm fall day in October 2005, and Mark Anderson, a 300-pound man carrying a bucket of gasoline-soaked rags, was definitely up to no good.
He walked into the massive Wines Central warehouse in Vallejo, Calif., where some of the world’s finest wine was stacked on pallets “40 feet high stretched the length of two football fields.”
He lit the rags with a propane torch, dropped them along the pallets of wine and hauled out of there, running as fast as his massive frame would allow. By the time he was done — it took firefighters eight hours to control the blaze — he had destroyed “more than 4 ¹/₂ million bottles of premium wine . . . worth more than a quarter-billion dollars on the retail market. It was the greatest crime involving wine in history.”
But the fire, as veteran journalist Frances Dinkelspiel lays out in her new book “Tangled Vines,” was just the latest, nastiest blow to the industry, as wine fraud had already cast doubt on the identity of some of the supposedly finest wines in the world.
In the past decade, rare wine collecting has taken two major hits.
The first centered around a mysteriously wealthy Indonesian named Rudy Kurniawan, who was “the boy wonder of the fine-wine world,” spending as much as $1 million a month “to acquire coveted varietals.”
Kurniawan joined three wine-tasting groups — BurgWhores; Deaf, Dumb, and Blind; and the Royal Order of the Purple Palate — whose members included “Hollywood directors, movie producers and business managers for A-list stars. He started to meet movie stars, like Will Smith and Jackie Chan, and treat them to gourmet dinners filled with special wines.”
At one especially memorable gathering in 2004, Kurniawan and friends “went on a four-day eating and drinking binge at Cru, a restaurant just north of Washington Square in New York famous for its 150,000-bottle wine list.”
The bottles emptied that night contained what wine writer Michael Steinberger called “a murderer’s row of legendary wines,” including “a 1945 Mouton Rothschild, a 1964 Romanée-Conti, and a 1971 La Tache, wines so rare and expensive few had ever had the pleasure of drinking them.”
The bill for the meal came to $250,000, which Kurniawan paid with his American Express black card.
But while the night propelled Kurniawan into “the upper echelons of the wine world,” it ended on a strange note, as Kurniawan asked the restaurant to send the empty bottles to his home.
In 2006, Kurniawan enlisted an auction house to sell off wine from his collection, which was so spectacular that, for its first time ever, the house held an entire auction for just the one seller. Promoting Kurniawan’s collection, which included some of the rarest wines, they called it, “the greatest cellar in America.”
The auction took in $10.6 million, making it “the largest single-owner sale ever by an American collector,” although Kurniawan eclipsed it soon after with an auction that raised $25.7 million.
Two years later, though, at a similar auction, the bloom came off the rosé. Included in the bottles for sale were “268 bottles from three French Burgundy estates,” including a 1929 Ponsot Clos de la Roche from Domaine Ponsot. When Laurence Ponsot, the estate’s proprietor, heard about the sale, he was “immediately alarmed,” since his family only began “producing wine under its own name” in 1934.
At Ponsot’s insistence, all 97 of his bottles were pulled from the auction — about $1 million worth. One Kurniawan customer who got wind of the fraud was William Koch, brother of David and Charles Koch. William is an energy magnate in his own right, and owner of “one of the world’s most impressive wine collections, with 43,000 bottles scattered across his two cellars.” Koch had spent over $2 million on Kurniawan’s wines.
After discovering that $4.5 million worth of wine in his collection (not all Kurniawan’s) was fake, Koch became the most determined enemy wine frauds could have, spending $30 million to $40 million in the coming years to uncover frauds and bring the perpetrators to justice. He also sued Kurniawan and the auction house in 2009. In time, it was discovered that Kurniawan’s home, which he shared with his mother, was “a veritable wine-counterfitting factory,” with bottles and fake labels everywhere. Federal agents uncovered intricate recipes for reproducing the taste of classic wines. “One recipe for a fake 1945 Mouton Rothschild called for ‘one-half 1988 Pichon Melant; one-quarter oxidized Bordeaux; and one-quarter Napa cab.’”
Kurniawan settled with Koch, paying him $3 million and agreeing to share everything he knew about wine fraud. In August 2014, he was sentenced to 10 years in prison, fined $20 million and “ordered to pay $28.4 million to seven victims.”
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