(Decanter) - Rudy Kurniawan had spiralling debts totalling millions of dollars around the same time that he attempted to sell counterfeit fine wine at auction, a court has heard in the second day of the alleged wine fraudster's trial.

Kurniawan already owed millions of dollars to auction house Acker Merrall & Condit by the time he applied for a further $3m loan from Fine Art Capital in late 2007, the US District Court, Southern District of New York heard yesterday (10 December).

'He didn't say he owed money to them,' said witness Barbara Chu, an employee of Emigrant Bank Fine Art Finance, formerly known as Fine Art Capital, when questioned by the prosecution.

The court also heard how Kurniawan lied that he had 'permanent residency' status in the US, in order to secure the extra $3m loan, which he was granted in early 2008.

In what was the first full day of testimony, one of the FBI agents who raided Kurniawan's Los Angeles home in March 2012 was asked to describe what he had found.

He said Kurniawan's kitchen window was covered with foil, so 'you can't see in or out'. Photos were shown to the court, including one depicting several bottles of wine floating in water in Kurniawan's kitchen sink, with some labels on the side. Nearby, there was a drying area and what appeared to be a device used for extracting corks from bottles without piercing them. Some bottles were shown corked and not labelled.

'We were looking for evidence of counterfeiting activities of fine wine,' FBI agent James Wynne told the court. 'So, we were looking for corks, capsules, labels, devices to extract corks, devices to rebottle, documents respecting wine transactions, and/or provenance.'