Counterfeiting has been a mainstay for the criminal underworld for generations. Whether printing fake currency or manufacturing knock-off consumer items, crooks have used counterfeiting to reap millions of dollars in illicit profits. Recently, however, the FBI announced the conviction of a New York man involved in a counterfeiting scheme that brings new meaning to the terms “bold” and “refined.”
The United States Attorney’s Office for the Southern District of New York, in collaboration with the FBI, announced that wine dealer Rudy Kurniawan was convicted in Manhattan federal court for his part in a plot to manufacture and sell counterfeit bottles of so-called “rare and expensive” wine for millions of dollars.
In its press release, the U.S. Attorney’s Office said that Kurniawan pulled off the fraud by not only promoting and selling the counterfeit wine, but that he also prepared, bottled, and labeled the fake vintages, which he sold to unsuspecting victims.
According to the facts presented at trial, Kurniawan had been a collector of expensive and rare wines and became one of the most well-known and prolific wine dealers in the United States. From 2004 through 2012, Kurniawan engaged in an elaborate plan to defraud wine collectors and consumers by selling or attempting to sell numerous counterfeit bottles of what he touted as rare and expensive wine.
The U.S. Attorney’s Office claimed that Kurniawan produced counterfeit bottles of “rare and vintage” wine at his home in Arcadia, California, operating what was, in effect, a counterfeit wine making operation; kind of like the "Breaking Bad" of wine making. Kurniawan mixed together low-cost wines so that they would take on the taste and character of rare and far more expensive wines. He then poured his concoctions into empty bottles that he acquired from various sources. Kurniawan created the finished product by sealing the bottles with corks and pasting the bottles with counterfeit wine labels, which he created. Kurniawan then sold or attempted to sell these fake bottles of wine at auctions and through direct sales to affluent wine collectors. Kurniawan garnered millions of dollars through the sale of these counterfeit bottles of wine. Kurniawan, who was 37 years-old at the time of his conviction, could face up to twenty years in prison.
In addition to wine, sophisticated criminal networks have created millions of illegally produced, counterfeit and pirated goods including clothing, music, movies, fashion accessories and computer software. An entire black market or underground economy has been created, in which these illegal goods are sold or traded. Due to the illicit nature of the goods, the market itself is forced to operate outside the formal economy and profits are diverted back to the criminal enterprises. According to the International Chamber of Commerce, counterfeiting accounts for between 5-7% of world trade, worth an estimated $600 billion a year.
Counterfeiting has become one of the fastest growing economic crimes, largely due to the enormous profits created from the sale of pirated goods. Counterfeiting presents companies, governments and individuals with a unique set of problems, in that it devalues corporate reputations, hinders investment, and funds criminal syndicates. American journalist Sydney J. Harris summed it up by saying, “Men make counterfeit money; but in many more cases, money makes counterfeit men.”