Former wine collector to forfeit $20 million for counterfeiting

NEW YORK Fri Jul 25, 2014 2:10am IST

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NEW YORK (Reuters) - An Indonesian man once considered one of the world's top wine collectors was ordered Thursday to forfeit $20 million for selling millions of dollars of counterfeit bottles of wine to unsuspecting buyers.

Rudy Kurniawan, whose fall from grace made international headlines, was ordered to forfeit the sum by U.S. District Judge Richard Berman. The order came at a hearing that was originally scheduled for his sentencing, which was delayed until Aug. 4.

The delay followed arguments over how much in losses Kurniawan's crimes had caused, a key factor in determining his sentence. The judge said he wanted more information.

Kurniawan, 37, was found guilty in December of one count of mail fraud for counterfeiting wine and one count of wire fraud for defrauding a financing company out of a $3 million loan.

Meanwhile, Kurniawan has agreed to settle a civil lawsuit filed by billionaire oenophile William Koch, who in 2009 sued him in California state court as part of a long-running legal crusade against fake vintage wine.

The deal was disclosed in court by Kurniawan's lawyer, Jerome Mooney. Brad Goldstein, a spokesman for Koch, confirmed the deal, which he said was for $3 million in damages.

Mooney in an email said what Kurniawan ultimately pays Koch will be determined by the probation department. Goldstein also said Kurniawan had agreed to "provide full cooperation to help reform the industry."

Koch, the founder of Oxbow Group, testified as a government witness against Kurniawan. He is the brother of conservative political activists, Charles and David Koch. Forbes estimates his net worth at $3.9 billion.

Prosecutors accused Kurniawan of operating a counterfeit wine factory out of his California home, buying empty rare bottles, printing forged labels and spending thousands on French wax to produce hundreds of fakes.

Mooney argued at trial he had acquired the fake bottles unknowingly and had been made a scapegoat for a pervasive counterfeit problem in the fine wine industry.

Ahead of the sentencing, Koch was expected to seek $2.1 million in restitution.

Earlier this month, the billionaire reached a confidential settlement in a separate lawsuit filed in 2008 in New York state court against Acker, Merrall & Condit Co, a wine dealer and auction house that sold him Kurniawan's bottles.

"As I testified during Kurniawan's criminal trial, I, like many others, was conned and cheated by Mr. Kurniawan," Koch wrote in a letter to Berman in May.

(Reporting by Nate Raymond and Joseph Ax in New York, editing by G Crosse)

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