Federal prosecutor Stanley Okula Jr. reiterated that point,
finding it shocking that the defence lawyer would suggest that fraud against rich people should be seen in a different, and less harsh, light. “Fraud is fraud,” he said. “There is no distinction in the guidelines, or in logic, for treating it differently.” Kurniawan, however, was by no means the only fraudster
reaping huge profits from wine fraud. In December 2013, the Daily Mail reported, a “billionaire businessman unknowingly spent more than £3 million [$5.7 million] on between 500 and 600 bottles of counterfeit Bordeaux wine. Others are believed to have spent similar amounts of money, but are too embarrassed to confess to being the victims of fraud.” The newspaper’s story said the bottles, most of which “were
picked up in China,” were exposed as frauds “at a specialist lab in Bordeaux, run by the French Finance Ministry.” With the price for genuine rare wines ever increasing, espe-
A sophisticated wine drinker, however, should be able to spot
the charade, he said. “There is a distinctive taste in aged wine — [that of] canned asparagus.” Old wines, especially from regions such as Burgundy and Bordeaux, “have lost the major- ity of their tannins, giving them a soſter taste reminiscent of the vegetable,” the BBC explained. To help those concerned about becoming victims of wine
fraud, Maureen Downey, oſten billed as the world’s top wine fraud investigator, launched a subscription website in late spring to assist vendors and buyers of rare wines with informa- tion about wine counterfeiting and authentication. Downey, who had been suspicious of Kurniawan from the
day she met him while she worked at an auction house in the early 2000s, calls her website
winefraud.com. In an April 2014 interview with
decanter.com, she told of a recent client who asked her to examine potentially problematic bottles.
More than 5% of wine consigned and sold at auction is fake “Downey had them professionally photographed before
cially in Asia, fraudsters have found they can make staggering profits by producing fakes. “Many purchase old, empty bottles from the most prestigious
French vineyards, so that the wine passes tests that sample the bottle’s glass or inspect the label,” the newspaper reported. “A recent search on eBay revealed several old, empty bottles were for sale, including a 1958 Château Lafite Rothschild, a 1928 Château Margaux and a 1971 Romanée-Conti — all of which are some of the most counterfeited wines.” To counteract fraud, some wineries are now laser-engraving
their bottles with unique serial numbers, or using holograms or bar-code stickers. “The Bordeaux winegrowers’ professional association has even created an app — called Smart Bordeaux, which provides information on individual wines and wineries,” the paper said. For the average wine consumer, however, distinguishing a
fake from a genuine bottle can be difficult, the BBC reported, noting that wine fraud goes back to at least the days of classical Rome. The network estimated that “over 5% of wine consigned and sold at auction is fake.” Ponsot testified at Kurniawan’s trial that, in his estimation,
about 80% of pre-1980 bottles available at auctions from Burgundy’s top-four domains, including his own, are likely fakes. An untrained palate could easily be fooled into thinking a
young, inexpensive wine was actually much older and more valuable. “By blending the fruitiness of a new wine with the aged character of the old wine [Kurniawan] would approximate in some manner a very, very good aged Burgundy,” wine chemist Andrew Waterhouse told the BBC.
forensically inspecting the glass, label, cork and capsule of each,”
decanter.com said. “The tools of her trade are surpris- ingly basic: a magnifying glass, jeweller’s loupe, torch, box cutters and Kleenex. ‘It’s slow, labour-intensive work. I can only really process about 30 bottles a day,’ she says. In the end, Downey concluded that only three wines were genuine. The other 37 had cost US$2.4 million from a London retailer, which shortly received Downey’s discreet and comprehensive report. ‘That’s how my client gets his money back. Every vendor we’ve sent a report to, saying our client was robbed, has paid up.’ ” Koch agrees that few victims want to admit they’ve been
duped. “He said many businessmen opt to swallow their losses, instead of admitting their own ignorance, adding: ‘There’s a code of silence in the entire industry,’” the Daily Mail said. “Fabien Teitgen, who is in charge of winemaking at Château Smith Haut Lafitte in Bordeaux [said]: ‘I think the ostrich strat- egy — hiding yourself and saying we’ll figure it out later — is not satisfying. It is best to speak about it openly and let consumers know what means there are to verify that they have the right product.’ ” Perhaps the snobbery sometimes associated with amateur
wine enthusiasts, who pretend to know more than they actually do, also makes some victims reluctant to admit they’ve been taken. Perhaps they should take advice from former US secre- tary of state Colin Powell, who once said: “Bad news isn’t wine. It doesn’t improve with age.” Let’s drink to that.
DAVID MALAMED, CPA, CA•IFA, CPA (ILL.), CCF, CFE, CFI, is a partner in forensic accounting at Grant Thornton LLP in Toronto
MAY 2015 | CPA MAGAZINE | 57
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