Wine Fraud: An Increasingly Serious Problem: Watch Out!

Wine Fraud Isn’t New.

France has long been the center of wine fraud. And within France, the Bordeaux region has been the center of dishonesty.

         Overview

I.   Georges Deboeuf

II.  Pinot Noir

III. Cotes-du-Rhone

IV.  Label Fraud

V.   Wine Fraud Widespread

VI.  Resources

Historically, French vintners often sold Algerian wine as French wine at much higher prices. Sometimes the wine came from Morocco or Tunisia. After the early 20th century, Spanish wine often replaced Algerian in the fraud.

Another fraud is to secretly blend foreign wine with French wine, rather than completely substitute it. An alternative was to substitute cheap wine from other sections of France for more expensive wine from Bordeaux. Or to blend it secretly.

I. Georges Debouef Fraud

Unfortunately, the practice of deception continues. The Georges Deboeuf wine company is one of France’s best-known wine producers.

One internet scammer offered “1995 Mouton Rothschild-original box.” The successful bidder paid a very high price for what turned out to be just the box. There was no wine.

In the late 1960s, Georges Debouef successfully developed and promoted the concept of Beaujolais Nouveau. Vintners now rush to release their wine on the third Thursday of November. This makes it available for Thanksgiving Day in the U.S. That holiday falls on the fourth Thursday of November.

Deboeuf is a very large company. It sells over 30 million bottles of Beaujolais wine each year. That’s about one-fifth of all wine produced in that region.

However, the company is also known in wine circles for something else: wine fraud. In 2006, Georges Deboeuf was convicted of fraud. His company had mixed inferior grapes into its vintage single grape wines.

No one detected the fraud by the taste of the wines. France’s consumer protection agency caught it through a routine audit.

II. Pinot Noir Fraud

wine fraud

Pinot Noir grapes

In 2006, a carefully devised con was developed. It involved wineries, wine cooperatives, and wine dealers. The swindlers sold vast quantities of Pinot Noir to an unsuspecting U.S. marketer.

However, there was a problem. Pinot Noir had become in short supply and expensive. (The popular film, Sideways,  greatly increased the demand.) So the fraudsters substituted cheaper wines.

Again, no one detected the fraud by the taste of the wine. Government auditors noticed that the Languedoc region was selling a lot of Pinot Noir. In fact, it was selling several times more that it was producing. That led to the culprits’ detection and conviction.

III. Cotes-du-Rhone Scandal

wine fraud

Cotes-du-Rhone

In 2017, the French anti-fraud unit reported a huge scam. Cheap wine was sold as expensive wine from Cotes-du-Rhone and Chateauneuf-du-Pape.

For example, wines from Chateauneuf-du-Pape sold in the U.K. for £15 to £50 per bottle. But the value of the actual wine was probably under £5 per bottle.

The fraud involved 66.5 million bottles of counterfeit wine. That’s equivalent to over 19 Olympic-size swimming pools full of wine.

The fraud was discovered during a tax audit. Investigators began inspecting the wine operation closely and discovered the crime. However, no one noticed anything suspicious from the taste of the wine.

IV. Wine Label Fraud

Wine writer Frank Prial notes the practice of famous Champage producers buying unlabeled bottles from lesser known producers. Then illegally labeling it as their own.

But producers of expensive Champagnes aren’t the only fraudsters. For example, consider Rudy Kurniawan.

Rudy Kurniawan

Rudy Kurniawan (born Zhen Wang Huang in 1976) is a Chinese Indonesian. He came to the U.S. on a student visa but stayed illegally. Still in his 20s, he began buying and selling rare wines. He spent up to one million dollars per month buying expensive wines at auction.

wine fraud

Rudy Kurniawan

Kurniawan hosted tastings of rare wines attended by wine collectors. Robert Parker, Jr. and other wine celebrities also attended. By 2006, he began selling wine through auction houses for tens of mllions of dollars profit. That year, Kurniawan sold through auction a total of eight magnums (large bottles) of 1947 Château Lafleur.

A Problem

However, there was a problem. The former head of the wine department of Sotheby’s noted that only five magnums of the 1947 Lafleur were produced. Therefore, Kurniawan was clearly selling fake wine.

Similarly, Kurniawan offered for auction Clos St. Denis vintage wines. But there was another problem. Those vintages were long before any recorded production of wines from that vineyard. Vintage or not.

See In Vino Duplicitas: The Rise and Fall of a Wine Forger Extraordinaire to discover more about Rudy Kurniawan. The documentary Sour Grapes details the the story of Kurniawan and his wine frauds.

It was errors like these that tripped up the con man. It wasn’t that people recognized the deception through the taste of the wines. They didn’t.

Finally, in 2012, FBI agents raided Kurniawan’s house. The agents found proof of the scam. There were inexpensive wines with notes showing how he would counterfeit them. In addition, there were corks, stamps, labels, and other materials he used to defraud people.

A jury found Kurniawan guilty of fraud and he is now behind bars serving a ten year prison sentence.

Hardy Rodenstock

Unfortunately, Rudy Kurniawan is far from unique. German Hardy Rodenstock (born Meinhard Görke) shares many similarities to Kurniawan. One is the change in birth names. Another is that they both hosted exclusive tastings of very rare old wines. Guests included celebrities and leading wine critics.

wine fraud

Hardy Rodenstock

Rodenstock’s specialty was discovering hordes of very rare and expensive wines. Also like Kurniawan, he bought and sold rare old wines through auctions. In 1985, he reported that he had acquired a number of bottles of wine that had belonged to Thomas Jefferson. The bottles were supposedly found in a walled-up cellar in Paris.

Jefferson had been a wine-lover and had lived in Paris. Moreover, the bottles were engraved “Th. J.” However, Rodenstock refused to tell from whom he bought them. Or the address of where they were discovered. Not even  how many bottles he acquired. Also, the bottles received great publicity. Yet no one has ever came forward to confirm any of the story. No worker, no building owner, no neighbor who heard demolition. No one.

So What?

Nevertheless, Rodenstock put a bottle up for auction. It sold for a record-breaking bid by Christopher Forbes. Later, forensic researchers found that the initials were made by a modern drill. Other tests also failed to support the authenticity of this and the other bottles.

The story of Hardy Rodenstock is detailed in The Billionaire’s Vinegar by Benjamin Wallace. A group in Hollywood has bought the film rights to the book.

Bill Koch bought four of the alleged Thomas Jefferson bottles at another auction. Upon finding that only an auctioneer authenticated the bottles, his staff contacted the Thomas Jefferson Foundation. Jefferson had carefully kept three separate ledgers recording each of his purchases and sales. But there was no record that he ever purchased any of the bottles. Rodenstock was the source of the bottles.

Investigative Team

Koch then hired a former FBI agent to form an investigative team. After extensive testing, Koch sued Rodenstock for fraud and won. However, Rodenstock stayed out of the U.S. and Koch was unable to collect or have him imprisoned.

Wine fraudsters are caught by their mistakes. Not by wine experts who detect fraud by the taste of the wine.

Discover how to find Good Wine at a Reasonable Price: the Secret to Finding It.

Rodenstock served Imperial (6 liter) bottles of Château Pétrus at some of his tastings. They were from the 1921, 1924, 1926, 1928, and 1934 vintages. However, the manager of Pétrus reported that, according to its records, it never produced any Imperials during those vintages.

Rodenstock later sold magnums (1.5-liter bottles) of 1921 Pétrus. A buyer then challenged their authenticity and sued.

V. Wine Fraud is Widespread

The fraudulent wine produced by Rudy Kurniawan and Hardy Rodenstock continue to be bought and sold. Even by well-known auction houses. And they are only two of many other wine fraudsters.

Few people, even in the wine industry, realize how widespread wine fraud is. For example,

  • About 20% of all international wine sales are of counterfeit wine, reports Sud Ouest.
  • The International Center for Alcohol Policies asserts that 30% of all alcohol consumed is fraudulant.
  • 75% of Canadian ice wine sold in Asia is counterfeit, according to expert Rhys Pender.

Even if these estimates are twice the actual level, wine fraud is still enormous. And it’s not always expensive wines. Much wine fraud involves low-priced wines as well. They sell in local wine shops, supermarkets, and other merchants.

VI. Wine Fraud Resources

Cornwell, D. WARNING – ZACHY’S WINE AUCTIONS IS NOW OFFERING WINES FROM FRAUDSTER ERIC GREENBERG. (Learn about Eric Greenbers’s wine frauds.)

Hellman, P. In Vino Duplicitas: The Rise and Fall of a Wine Forger Extraordinaire. NY: Experiment, 2017.

Keefe, P., The Jefferson Bottles, New Yorker, Sept. 3, 2007.

Steinberger, M., What’s in the Bottle?, Slate, June 14, 2010.

Tobiassen, R. The “Fake Alcohol” Situation in the United States. Alexandria, VA: Center for Alcohol Policy, 2014.

Wallace, B. The Billionaire’s Vinegar. NY: Three Rivers, 2009.

 

Note. The author has made great effort to be factually correct. However, he cannot guarantee total accuracy.