Rudy Kurniawan wasn’t the only wine enthusiast convicted in a Manhattan federal court on Wednesday. Just hours after jurors returned a guilty verdict against Kurniawan, another jury announced that it had found a 41-year-old portfolio manager named Michael Steinberg guilty on four counts of securities fraud and one count of conspiracy to commit securities fraud. It is a little surreal when someone whose name is almost identical to yours is in the news for a crime (okay, maybe it isn’t all that unusual if your name is John Smith, but if your name is Michael Steinberger….). It is jarring when you also happen to know the person. Through our mutual interest in wine, I was casually acquainted with Steinberg, who worked for SAC Capital Advisors, the embattled hedge fund run by billionaire investor Steven A. Cohen. Steinberg’s trial took place across the street from Kurniawan’s, but I didn’t see any of it; courtroom voyeurism isn’t my thing, and frankly, I would have been embarrassed had Steinberg caught me gawking at his trial. He was charged with securities fraud, Kurniawan with wine fraud, yet their cases were strikingly similar in how they unfolded and how they concluded. They were also noteworthy for what they failed to achieve.
I met Steinberg five or six years ago, either at a wine tasting or a wine auction. I had first seen his name on erobertparker.com, where he would occasionally post. He was familiar with my name, as well, and we had a good laugh when we were finally introduced. I liked him instantly: he was smart, personable, and didn’t seem to have any Wall Street, monster-of-the-universe swagger. The longest I spent with him was at an Acker Merrall & Condit (AMC) auction at Cru in 2007. Cru, of course, was the scene of some of Kurniawan’s wildest nights, and also the site of his unmasking. It was an evening auction, and Steinberg, spotting me across the room, invited me to join him and some friends for dinner at their table. He was a Burgundy guy and treated us to a 2002 Lafarge Volnay Clos des Chênes off the list (Cohen apparently has a taste for Burgundy, too; from what I gather, he takes a hefty annual allocation of DRC from a retailer in Greenwich, Connecticut, where he lives). While I knew that Steinberg worked for a hedge fund, I had no idea that it was SAC, and he didn’t mention it. Only later did I learn that he was said to be Cohen’s right-hand man. It was undoubtedly a very lucrative position, but it was also a dangerous one when his boss became the primary target of a government crackdown on insider trading.
If you aren’t familiar with Cohen, you can read about him here. He is known to be a brilliant trader, but his results have been so phenomenal that they have long aroused suspicion. Over the last two decades, SAC has notched 30 percent average annual returns, a performance that struck many observers as too good to have been achieved without cheating. Rumors of insider trading have dogged Cohen for years, and SAC, which manages around $14 billion, has been under investigation since the mid-2000s. But the pressure on the firm ratcheted up considerably when Preet Bharara became U.S. Attorney for the Southern District of New York four years ago. In the wake of the global financial meltdown, Bharara launched a sweeping assault on Wall Street corruption. Since 2009, he has won 77 convictions for insider trading without a single loss.
It no secret that the man Bharara most wants to take down is Cohen, and he and his team have been using the time-honored strategy of going after little fish in order to snag the big one. Before Steinberg’s arrest in late March, seven SAC employees had been charged with insider trading and six of them had pleaded guilty (the other case is still pending). Just two weeks before Steinberg’s arrest, Cohen agreed to pay $616 million to settle insider trading charges brought against his firm by the S.E.C. In July, the Justice Department indicted SAC on five counts of insider trading. The hedge fund pleaded guilty last month and agreed to pay $1.2 billion in penalties and forfeited profits in order to settle the case. It also agreed that it would no longer take money from outside investors; SAC is now being converted into a family office that will primarily manage Cohen’s personal fortune, estimated at $9 billion.
However, the guilty plea and the enormous fines are all tied to misconduct by Cohen’s underlings; what prosecutors have yet to come up with is evidence proving that Cohen himself broke any laws, and that is clearly what they are after. But Cohen has repeatedly proclaimed his innocence, and he has certainly not been acting like a man who thinks his days of fresh air, sunshine, and private showers are numbered. In fact, his conduct has struck many as defiant, almost taunting. On March 26th, 11 days after SAC agreed to pay the SEC the $616 million and just three days before Steinberg was arrested, Cohen, a major art collector, paid $155 million to purchase Picasso’s “Le Reve” from casino magnate Steve Wynn. A week after Steinberg was led from his Park Avenue apartment in handcuffs, Cohen purchased a house in the Hamptons for $60 million. Correctly or not, these acquisitions were widely construed as Cohen essentially mooning the prosecutors (not a pretty image, I will acknowledge, but you’ll have forgotten it by Christmas Day—I promise!).
Steinberg’s arrest was said to mark a dramatic escalation in the government’s pursuit of Cohen; his stature at the firm seemed to bring the investigation perilously close to Cohen. Prosecutors clearly hoped that Steinberg, facing up to 85 years in prison, would provide them with incriminating evidence against his boss in exchange for leniency. But either because he didn’t have anything to offer the government or wasn’t willing to turn against Cohen, he opted to fight the charges instead. Cohen was not asked to testify during the month-long trial, and Steinberg’s defense team didn’t call any witnesses. Given Bharara’s undefeated record on insider trading cases, going to trial was a very risky move for Steinberg and it backfired, badly. He seemed to know that even before the jury announced its decision: on entering the courtroom Wednesday afternoon to hear the verdict, he fainted.
Kurniawan, by contrast, remained impassive when the jury forewoman read the guilty verdict against him late Wednesday morning. But the two cases otherwise played out in similar fashion. I have to assume that when prosecutors ordered Kurniawan arrested last year, they thought they were pulling a thread that would unravel a broader conspiracy. Given the enormous number of counterfeit bottles that Kurniawan appeared to have sold, it seemed very unlikely that he had acted alone, and speculation about possible accomplices quickly focused on one person in particular: John Kapon. For what it’s worth, I never believed that Kapon had been in on the plot. He was certainly guilty of greed and gross negligence. It still blows my mind that Acker tried to sell those fake Ponsots; my 12-year-old son, seated at his computer, could have done all the due diligence that was required in probably two minutes or less (a visit to the domaine’s website quickly reveals that Ponsot didn’t make Clos Saint-Denis prior to the 1980s). Evidently, Acker’s authentication process went something like this: if it came in a dark green glass bottle, had a cork, and contained a liquid that looked like wine, it was deemed authentic.
But I thought Kapon was too smart and had far too much to lose to risk it all in a counterfeiting scheme, and the emails that he exchanged with Kurniawan at the time of the controversial Spectrum auction in London last year did not suggest they had been partners in crime; quite the opposite, in fact. If you recall, Kurniawan had defaulted on $10 million in loans from Acker, and as part of a deal to work off that debt, he had agreed that he would not sell any wines without first obtaining permission from Kapon. When it was reported that Kurniawan had consigned wines to the Spectrum sale through a third party, Kapon was furious; in the emails, he demanded to know if the rumors were true and sternly reminded Kurniawan about the terms of the agreement (“You know you can’t do this, Rudy, without our written consent”). Based on those emails, and based on what I knew of Kapon, I never bought the idea that he had conspired with Kurniawan.
However, it was easy enough to understand why others made that leap. Kapon called Kurniawan his best friend, the two seemed inseparable, and to say it was a mutually beneficial relationship would be an understatement: John made Rudy, but more importantly, Rudy made John. In 2005, Acker was a middle-of-the pack auction house; then came the two Kurniawan sales in 2006 that together grossed $35 million, and suddenly, Acker was atop the league table, a position that it has maintained pretty much ever since. No one profited more from Kurniawan’s emergence on the wine scene than Kapon, and when Kurniawan was arrested, it was inevitable that people would wonder whether he had somehow been involved. But even before Kurniawan was caught, there were doubts about Kapon and Acker. It was the startling size of the sales ($24 million here, $15 million there) and all the record prices; it was the extreme rarity of some of the wines being sold and the improbably large quantities in which they were being offered; it was the boisterous atmosphere at the auctions and the fact that they so often seemed to consist of friends selling to friends through a friend; it was Kapon’s youth and brashness—to a lot of people, something just didn’t seem right (and at least with regard to the Kurniawan wines that Acker sold, we now know that something was very wrong).
In essence, the two big Kurniawan sales turned Acker into the SAC of the wine auction market, and Kapon became the wine world’s answer to Steve Cohen. And like Cohen, Kapon has been defiant in the face of controversy. He didn’t lower his profile after the fraudulent Ponsot bottles were pulled from the Acker auction in 2008, he didn’t do it after Kurniawan was arrested last year, and he didn’t do it even as his former best friend went on trial this month. Kapon would surely say that he did nothing wrong and thus had no reason to become less visible, and it’s certainly true that he has not been charged with any crime in relation to the wine counterfeiting scandal. Still, it was surprising to see him tweeting photos from a Lafite tasting the weekend before Kurniawan’s trial began, and as I noted in my previous post, Kapon tweeted a provocative photo on the night that Kurniawan’s case went to the jury: it was hard not to interpret that one as a raised middle finger aimed squarely at the prosecutors and at Laurent Ponsot, too. Whatever the explanation, Kapon, like Cohen, has not been acting like a man who fears that he may be headed to a federal prison anytime soon.
Kapon didn’t testify at Kurniawan’s trial, and the defense called just one witness. This was the first time the government had pursued a criminal case involving wine counterfeiting, and it was a big win for Bharara’s office, and in particular for lead prosecutor Jason Hernandez. But I very much doubt that investigators believed, when Kurniawan was arrested, that the counterfeiting probe would begin and end with him. (That’s where the Steinberg case differs: the government’s pursuit of Cohen didn’t commence with Steinberg’s arrest and won’t end with his conviction.) I am sure they hoped that the prospect of spending as much as 40 years in prison would lead Kurniawan to name any co-conspirators that he had. But evidently, Kurniawan wasn’t willing to play ball: he either refused to talk or didn’t offer the government enough information to justify making a deal with him. (Given the apparent scale of his operation, I don’t think there is any chance that he acted alone; he had to have had help.)
Kurniawan will be sentenced on April 24th, and Steinberg will be sentenced the following day. Both intend to appeal their convictions.
Jury deliberations begin this morning in the Rudy Kurniawan trial. Kurniawan’s attempted sale of several dozen allegedly fraudulent Domaine Ponsot bottles at an Acker Merrall auction in 2008 set in motion the events that ultimately led to his arrest four years later. As Kurniawan sat in jail awaiting his fate, here’s what John Kapon was drinking last night:
It can also lead to this pic.twitter.com/uBP0LYu8cI
— John Kapon (@JohnKapon) December 18, 2013
One of the Rudy memes making the rounds is the theory that he had authentic bottles alongside all the knockoffs and that he was careful not to serve or sell his counterfeit wines to people who were likely to recognize them as such, in particular Allen Meadows. In response to my last post, in which I questioned why Kurniawan’s attorneys hadn’t sought to put Meadows on the witness stand, several people wrote to me suggesting that Kurniawan had used Meadows as part of a pump-and-dump scheme, serving him legit bottles in order to gin up demand for those wines, demand that Kurniawan then satisfied with his fakes. In a comment on eBob yesterday, Robert Parker posited this very scenario (although he didn’t cite Meadows by name). The underlying assumption is that Meadows was much too good a taster to be fooled by sham bottles, and that Kurniawan knew this and plied him with genuine bottles instead. What everyone seems to be forgetting is that there was at least one instance in which Kurniawan is known to have served Meadows a counterfeit wine, and we know this because it was one of the bottles that triggered Kurniawan’s downfall. However, it wasn’t Meadows’s palate that snagged Kurniawan.
In early April 2008, John Kapon hosted a rollicking dinner in Los Angeles that was attended by, among others, Meadows and Kurniawan, who contributed several bottles to the bacchanal. The dinner was a presale roadshow for an Acker Merrall auction that was scheduled for later that month in New York. The centerpiece of the auction was a large cache of wines consigned by Rob Rosania, A.K.A. Big Boy, who was also at the dinner and apparently supplied most of the bottles that were opened that night. But Kurniawan had consigned some wines to the April 25th sale, as well, including 38 bottles of Domaine Ponsot Clos Saint-Denis from the years 1945-1971, and one of the bottles that he brought to the dinner in Los Angeles was a 1959 Domaine Ponsot Clos Saint-Denis. Just a few weeks later, Kurniawan’s 38 bottles were abruptly withdrawn from the Acker auction, along with a number of other Ponsot bottles that he was attempting to sell, after it was pointed out to Kapon that Domaine Ponsot hadn’t produced any Clos Saint-Denis prior to 1982.
But it was New York wine collector Doug Barzelay, not Meadows, who flagged the dubious bottles. Barzelay didn’t attend the Los Angeles extravaganza but had seen the Ponsots in the auction catalog and was puzzled because he couldn’t recall ever encountering any pre-1980s Domaine Ponsot Clos Saint-Denis. He did some poking around on the Ponsot website, which indicated that the estate had only acquired its parcel of Clos Saint-Denis in the early 80s. According to Barzelay, he then reached out to Meadows to see if he had any recollection of pre-80s Ponsot Clos Saint-Denis; Meadows told him that, in fact, he had just been served a 1959 Domaine Ponsot Clos Saint-Denis at a dinner in Los Angeles and had “also been suspicious about whether such a wine had actually been made by Ponsot.” (Barzelay ultimately contacted Laurent Ponsot to alert him to the Acker auction, which set in motion the events that led to Kurniawan’s arrest four years later.)
However, if Meadows had doubts about the bottle’s authenticity, he evidently didn’t share his concerns with Kapon, and based on what Kapon subsequently wrote, it appears that Meadows had no qualms about how the wine tasted. Several days after the Los Angeles get-together, Kapon published one of his Vintage Tastings missives, porn-ishly titled “Big Boy Does Los Angeles”, in which he recapped the evening. Here’s what Kapon had to say about the 59 (I’m including the preamble, which makes for interesting reading, too):
“There was another guest flight, but this one was planned, as there is also a guest consignment in Rob’s sale from ‘THE Cellar.’ Rudy had long since arrived on the scene, and he brought gifts, two flights of them, in fact. Rudy and Rob have developed a great friendship over the years with their comparable generosity and passion for rare, old wines. I should start a dating service lol.
“The first wine in this second flight of red wines first had oats and brown sugar in its nose, also having classic bouillon, garden, earth and dirt. Flavors of citrus, earth and ‘caramel’ (Jerry) were present in this tangy wine, and Allen was all over its ‘lemongrass’ quality, and it was just that! Clean and almost crisp, this was a mellow yet solid bottle of 1959 Ponsot Clos St. Denis Vieilles Vignes that had nice spice and stayed fresh (95).”
Kapon’s tasting note clearly suggests that Meadows was enthusiastic about the wine. The specter of fraud didn’t seem to be weighing on Meadows the following day, either. In the first paragraph of his article, Kapon wrote,
“Allen Meadows, aka the Burghound, was there, and the next morning had this to say to Rob: ‘Seriously, I have attended a lot of really nice events over the years, but this one ranks in my top five ever, which is saying something,’ or as he put it to me, ‘Dude. That was AWESOME.’”
There’s no way of knowing for sure without seeing Meadows’s tasting note for the 59 Clos Saint-Denis, but it certainly appears that the wine itself fooled him, and that’s not surprising. Having written fairly extensively about wine fraud, I’ve come to believe that even the most experienced and knowledgeable tasters can be easily duped; in fact, wine critics may be the easiest marks of all. I’m also convinced that bamboozling so-called experts is a source of added inspiration and pleasure for wine fraudsters. I have no doubt, for instance, that the magnums of 1920s-era Pétrus that Hardy Rodenstock uncorked for Robert Parker and other luminaries in Munich in 1995 were bogus. They may have tasted like 100-point wines to Parker, but I am confident that they were also 100 percent fake. Rodenstock plainly saw that hubris and desire make people exquisitely vulnerable to the kind of deception that he perpetrated, and he knew this to be as true of wine gurus as it was of wine collectors—and probably even more so. I think he got a thrill from trying to hoodwink recognized authorities like Parker and Michael Broadbent, and it seems to me that he understood them better than they understood themselves. I suspect it was the same with Kurniawan, and it is highly unlikely that the 59 Domaine Ponsot Clos Saint-Denis was the only counterfeit wine that he shared with Meadows.
Oh, and for those keeping track at home: another wine served at the Los Angeles dinner was a bottle of 1945 Romanée-Conti. Go figure.
Some observations and comments:
-Bill Koch, Antonio Castanos, and Doug Barzelay all testified yesterday. After testifying, Koch gave an impromptu press conference in the hallway outside the courtroom. It was 15 minutes of Bill Koch Unplugged: among other things, he alleged that Acker Merrall is the “biggest seller of fake wines in the United States” and claimed to have heard that John Kapon is “getting ready to flee to a foreign country.” He shared with reporters a photo of Kurniawan’s brothers, as well as photos of Kurniawan mugging with the actors Will Smith and Jackie Chan and the singer Lionel Richie. He also displayed pictures of the so-called “sexy boys“, Jeff Sokolin and Daniel Oliveros of Royal Wine Merchants, including one of them with Robert Parker (Koch is suing Royal over the sale of allegedly counterfeit bottles). His dossier even included a photo of Oliveros’s estranged wife, the pornstar Savanna Samson (she was fully clothed in the picture).
-Laurent Ponsot, Christophe Roumier, and Aubert de Villaine testified on Thursday. It was a riveting day, but it was also sad to see three of Burgundy’s greatest vignerons on the witness stand in an American courtroom. This whole saga, and the culture of excess that spawned it, is just so contrary to the spirit of Burgundy.
-The jury seemed completely engrossed as Ponsot, Roumier, and de Villaine explained the intricacies of Burgundy and shared the histories of their domaines. That was nice to see, although with Burgundy prices already exorbitant, the last thing we need is new Burgundy fans and even greater demand!
-This is not meant as criticism, but it is astonishing to me that so few wine writers have come to watch the proceedings. The redoubtable Peter Hellman, who has done sensational reporting for the Wine Spectator, has been there every day (someone get that man a book deal). Tyler Colman caught Wednesday’s session and was back yesterday, and Elin McCoy was there Thursday. Non-wine journalists are covering the trial, but the paucity of wine writers in the gallery is mystifying.
-The testimony of Ponsot, Roumier, and de Villaine gave Kurniawan’s defense team the opportunity to play the Burgundian minefield card—to suggest that the lack of record keeping and the often ad hoc manner in which Burgundy producers labeled their bottles back in the day makes it impossible to say for certain that Kurniawan’s allegedly fraudulent wines are indeed counterfeit. But Kurniawan’s attorneys, Jerome Mooney and Vincent S. Verdiramo, didn’t pursue this line of reasoning with any consistency or rigor; they made no attempt to build a sustained argument that might create reasonable doubt in the minds of the jurors. The bumbling became downright surreal when Roumier was on the stand. Mooney brought up the Nazi occupation of France and noted that many winemakers had sought to hide their wines from the Germans. Roumier responded that none of his family’s wines were confiscated. “But your grandfather had to answer to the wine fuhrer, right?” Mooney asked, prompting lots of head-scratching and eye-rolling in the gallery. Roumier, clearly puzzled, said that the Nazis didn’t occupy his grandfather’s home and indicated that his family was pretty much left alone during the war. Pivoting from the Roumiers to wartime Burgundy in general, Mooney then asked, “Isn’t it true that a lot of strange things started happening with bottling and labels? And that in order to meet the demands the Germans were making, they started to put together all sorts of false and phony bottles to send over to the Germans?” Roumier replied with a befuddled “I don’t know.”
It was more of the same on Friday. Mooney’s cross-examinations basically consist of him repeating what the witnesses have just told the prosecutors and prompting the witnesses to then repeat it themselves; it’s the courtroom equivalent of doing donuts in a high school parking lot. But maybe that is for the best: when Mooney tried to take the discussion with Barzelay in a new direction, it was a debacle. He started asking about a dinner that he claimed Barzelay had had with Kurniawan, to which the latter had supposedly brought two bottles of the same wine, one of them a fake. Barzelay looked perplexed and said he didn’t recall any such dinner; Mooney got flustered, rifled through his papers for a moment, and then changed the subject. It suddenly dawned on me that Mooney was referring to a dinner that Laurent Ponsot and Kurniawan had had, in 2009. Anyway, that gives you a flavor of just how hapless the defense has been. It brings to mind the famous Casey Stengel line: Can’t anyone here play this game? As far as I can tell, the only doubt Mooney has succeeded in raising thus far is about his own competence. But I suppose there could be a more charitable explanation for the pathetically feeble defense: perhaps he and Verdiramo have concluded that a guilty verdict is unavoidable and are simply going through the motions. Which brings me to my next point….
-If I were defending Kurniawan, Allen Meadows would be my star witness. Few if any people tasted more of Kurniawan’s wines than Meadows, and he gave gushing reviews and high scores to many of the bottles. Mooney seems to recognize that Meadows is a central figure in this drama; he invoked his name several times Thursday and Friday. On Thursday, the court was shown a picture of a bottle of 1945 Romanée-Conti that Kurniawan had contributed to a Romanée-Conti tasting in New York in 2007, an event attended by Kurniawan, de Villaine, Meadows, and a group of major collectors. Mooney observed that all of the attendees had signed the bottle after it was consumed, and he called attention to two signatures in particular: de Villaine’s and Meadows’s (Meadows signed his name on the neck label, putting “Allen” to the left of “1945” and “Meadows” to the right of it). Mooney went on to note that Meadows had given the bottle 100 points. True to form, Mooney made no effort to drive home the significance of that rating (i.e. that Meadows, the foremost authority on Burgundy, had judged it to be a legit bottle). But unless he really is a total nincompoop, he surely must realize that Meadows’s reviews are a potential lifeline for his client.
I’m not a lawyer, but I’ll pretend to be one for a moment. It would take the defense probably all of 30 seconds to establish that Meadows is widely recognized as the preeminent Burgundy expert (they could just show the jurors a selection of Burghound citations in auction catalogs) and that he was invited to these fancy tastings because collectors and auction houses alike coveted his imprimatur. Once on the witness stand, Meadows would have two options: he would either have to stand behind the scores that he gave to Kurniawan’s wines, or he would have to renounce them and, by extension, renounce his own claim to authority. If Meadows affirmed the validity of those ratings, it would surely sew doubt in the minds of at least a few jurors. If, on the other hand, he backed away from his reviews, jurors might well conclude that the fine wine world is a gilded cesspool, teeming with vulgarians and charlatans and critics with purchasable palates, and that Kurniawan is being made a fall guy for the sins of many.
I’m not suggesting that this is a slam-dunk strategy that would get Kurniawan acquitted; the weight of the evidence against him is pretty overwhelming. But it does strike me as the best way—probably the only way—to plant some uncertainty in the minds of the jurors. I emailed Mooney Thursday night to ask if Meadows was on the list of potential witnesses; he replied several hours later and told me that Meadows was not on the list, adding, “last I heard he was entrenched in Burgundy and out of reach of both sides.” So the defense is evidently going to rest without putting on the stand the one person whose testimony could possibly turn the case in its favor. In a truly bizarre trial, that may be the strangest twist of all.
There was an amusing moment at the Rudy Kurniawan trial yesterday afternoon. Jim Wynne, the FBI agent who led the Kurniawan investigation, was on the witness stand and was asked by defense attorney Jerome Mooney to examine an empty magnum of 1937 Domaine de la Romanée-Conti Romanée-Conti that Kurniawan and some friends had signed. Mooney asked Wynne if he recognized any of the names. The bespectacled Wynne took the bottle, read aloud a few names, and then paused. “Big Boy?”, he said. “I don’t know who that is.” His comment elicited laughter from some of the reporters and wine experts on hand: Big Boy” is the nickname of the colorful Rob Rosania, a major New York collector who was close to Kurniawan. (When I later examined the bottle, I noticed it was actually signed “Big Boy Style”. I noticed, too, that someone had written “I’m a rat” and that someone had marked the date and time: 02-08-2008 8:38 pm). Don Cornwell and Maureen Downey, who are both attending the trial, whipped out their loupes as soon as the bottle was put on display and immediately judged it to be counterfeit; according to Downey, it had a computer-generated label.) As laughter rippled across the courtroom, Kurniawan turned around to look at the media section, and he was chuckling, too. I will admit that it was nice to see him smile; I was struck, on entering Courtroom 12D in the Daniel Moynihan United States Courthouse in lower Manhattan yesterday, by how awful he looked. I suppose 21 months behind bars would be hard on anyone, but it had clearly been hell on Kurniawan. He was pale and gaunt, barely filling his gray suit, and sadness was etched on his face. It appears no one from his family has come to the trial, which started on Monday, nor have any of his wine cronies been there. He is facing a long prison sentence, and he is totally alone except for his defense team—and they, of course, are being paid to sit at his side.
Mooney is Kurniawan’s second attorney; the 37-year-old collector dumped his first one, Michael Proctor, over the summer. That didn’t leave Mooney much time to prepare a defense; indeed, he is still figuring out how to pronounce his client’s name. Several times Tuesday, he said “Kurn-ee-yay-won,” but another time he pronounced it “Kurnee-a-won”. (Surnames seem to be a challenge for him generally; at one point, he referred to John Kapon as “John Capone”). If Mooney has cooked up a brilliant strategy to save Kurniawan, it was not apparent yesterday. He questioned Wynne for around two hours, and to say that he was grasping at straws would be putting it charitably; the bemused expression on Judge Richard M. Berman’s face pretty much told the story. In his folksy courtroom manner, Mooney grilled Wynne about the evidence that the FBI collected at Kurniawan’s Arcadia, California house the day it arrested him, and he sought to persuade the jury that what prosecutors claimed was a wine counterfeiting operation was really just one oenophile’s enthusiasm run amok. He noted that the FBI had found four bottles of 1985 Henri Jayer Richebourg lined up on a mantle in Kurniawan’s house and that the collector had taken a photo of the bottles. Mooney said there was nothing nefarious about this: Kurniawan just liked to take pictures of his trophy bottles. He also suggested that there was a perfectly innocent explanation for Kurniawan’s habit of removing labels from fancy bottles: he pointed out that Kurniawan was building a home in the Bel Air section of Los Angeles and said that perhaps his client was planning to use the labels to wallpaper his new house.
After Mooney took a seat, Assistant U.S. Attorney Jason Hernandez, the government’s lead lawyer, quickly and methodically demolished the sand castle he had built. Hernandez asked Wynne if he was aware of any plans Kurniawan had to wallpaper his Bel Air pad with labels of famous wines; Wynne, keeping a straight face, said no. Hernandez wondered aloud if perhaps Kurniawan was also planning to use the importer strips, the Nicolas stamps (a reference to the negociant house Nicolas), the stencils, and the wax seals that the FBI had seized from his Arcadia home to decorate the Bel Air mansion. A couple of jurors looked ready to burst out laughing. Hernandez asked that the photo of the four Jayer bottles be shown again. He then produced an email that Kurniawan had sent to one Kristoffer Meier Axel at 12:30AM on March 8th 2012, in which Kurniawan offered to sell him four bottles of 1985 Jayer Richebourg. The email included that same photo. Hernandez pointed out that Kurniawan sent the email just hours before he was arrested by the FBI. Mooney didn’t appear to slump in his chair, but that’s okay: I slumped for him. It was a brutal moment, and hardly the only one that the defense has suffered. And not for the first time, observers were left to wonder how it was that this case even went to trial.
Two interesting tidbits from yesterday:
-Jim Wynne said that Kurniawan had wired $12 million to his brother Dar, who lives in Hong Kong, and another $5 million to his brother Teddy Tan, who resides in Indonesia. Wynne didn’t say when these transfers were made, but that might go some way to clearing up one of the big mysteries in this whole saga: what happened to all the money that Kurniawan made from the two Acker auctions in 2006, and why was he begging people for loans just months later? Wynne said that very little money flowed in the other direction, from Kurniawan’s brothers to him—“minimal amounts,” in his words. This appears to contradict what the government claimed at the time of Kurniawan’s arrest. In the March 9 2012 letter that prosecutors submitted to a US District Judge Denise Cote asking that Kurniawan be denied bail because he was a flight risk, the government asserted that “Kurniawan’s family has demonstrated its willingness to provide him with substantial resources when he needs them. For example, from 2010 to June 2011, one of Kurniawan’s brothers who resides in Asia sent Kurniawan approximately $1.5 million from a bank account on Hong Kong.” I was surprised that Mooney didn’t ask Wynne to explain these seemingly contradictory claims.
-During Wynne’s appearance on the witness stand, the jury was shown a short but intriguing email exchange between John Kapon and Kurniawan. Kurniawan emailed Kapon asking, “Can you get Dar 100 to 200 cases of cheap 80s Bordeaux? Like 81 to 88? 400-700 a cs.” Kapon answered, “Will look into it but those prices barely exist anymore.” The emails were sent on April 14 2008; although it wasn’t pointed out in court, this was 11 days before the Acker Merrall auction at which Kurniawan tried to sell the allegedly fake Ponsot bottles, which ultimately led to his arrest. Why did Kurniawan ask Kapon to get his brother in Hong Kong such a large cache of cheap old Bordeaux, and did this peculiar request set off any alarm bells at Acker?
Speaking of Ponsot: Laurent Ponsot spent a good part of yesterday milling around in the hallway outside Judge Berman’s courtroom, awaiting his call to testify. Thanks to Mooney’s lengthy cross-examination of Wynne, the call never came. Ponsot is expected to finally be on the witness stand today. Ponsot is smart, witty, and has a flair for the dramatic; it should be an entertaining day in court.
Six months since my last post? Jesus, time flies. I guess I’ve created a new kind of Internet persona: the content non-provider. At any rate, my apologies to the two or three of you who missed me. All I can say is that it really has been a busy last six months! A good chunk of my summer was taken up reporting and writing a cover story about Roger Federer for The New York Times Magazine. Yes, it was an awesome assignment: I got to spend five days at Wimbledon, where I interviewed Federer, hovered around a couple of his practice sessions, and watched both of his matches on Centre Court, including his shocking loss to Sergiy Stakhovsky. There isn’t a bad seat on Centre Court, and the press gallery offers a particularly good vantage point. I’ve attended lots of sports events, but I’ve never experienced drama and tension quite like what I experienced sitting just feet away from Federer as he battled to save himself against Stakhovsky; I needed a cold beer after that one (unfortunately for me, I was in London, and the Brits still take their beer warm). That loss was the start of a miserable summer for Federer, whose struggles became the storyline for my article.
Here are some pictures from Wimbledon:
At the end of the summer, my wife published a brilliant cookbook called Keepers, which you must buy. While she was out flogging her book, I tried to keep the kids housed, clothed, and fed (using recipes from her cookbook, of course).
In October, the beautiful Gramercy Tavern Cookbook, for which my wife served as the recipe editor, was published. Two huge book projects simultaneously? Even after all these years, her competence awes me.
But I haven’t been a total slacker myself (appearances to the contrary). Last week, I published a book called The Wine Savant. It is best described as a polemical wine guide, combining advice on becoming a smarter wine buyer and a better taster with spirited commentary on various wine matters (natural wines, the pendulum shift in California, the triumph of Burgundy over Bordeaux, etc.) It received a starred review from Kirkus (I’m told that a star from Kirkus is sort of a big deal as publishing goes), and some generous praise from Jon Bonné of the San Francisco Chronicle, who has written an important new book that you should also buy. Purchase both books for the holidays, make two authors happy.
Anyway, now that the publishing orgy in my household has come to an end for the moment, I hope to try to drop in here a little more frequently (how’s that for setting a low bar?). As you may know, alleged wine counterfeiter Rudy Kurniawan went on trial in New York today (the Wine Spectator’s Peter Hellman wrote a good curtain-raiser, and the last line will give you a chuckle). I am planning to catch a couple of days of the trial this week and a few more next week; I will try to post some thoughts and impressions. Having written a big story about Kurniawan, I’m certainly eager to see the trial. But given what’s been happening in the auction market, I now wonder how much the Kurniawan case, and the effort to combat wine fraud generally, really matters. If I can find the time—again, just setting realistic expectations!—I will explain in a post tomorrow.
I gave a talk last week about America’s wine revolution at the Mercantile Library in Cincinnati. It is a lovely, privately funded institution that has a terrific speakers program, and I was honored that they invited me out. Around 100 people attended, and it was gratifying to see how interested they were in the culture of wine. There were a few self-acknowledged wine geeks in the crowd, but most were casual wine enthusiasts. Yet, they all seemed completely engaged by the topic. I spoke for around 35 minutes, then took questions for a half-hour. The questions were very smart, and had we not run out of time, the discussion might have gone on long into the evening. We know that cities such as New York, San Francisco, and Chicago have incredibly vibrant wine scenes, and we also know that there are plenty of oenophiles in places like Charlotte and Austin. But at the risk of sounding like an ignorant coastal type, it was very encouraging to see that the wine bug is truly a national phenomenon. During my talk, I made the claim that United States has the most dynamic wine culture of any country now, and the audience in Cincinnati proved my point.
I drove back and forth to Cincinnati, about nine hours each way. Driving was probably not the wisest choice—the Pennsylvania Turnpike is as dull as it is interminable!—but it was depressingly revealing. There was nothing to eat on the highway except fast food, and by the look of things, fast food was pretty much all that was available off the highway, too, in places such as western Pennsylvania and eastern Ohio. Sure, we all know fast food is everywhere, but I don’t think you can fully appreciate the extent to which it dominates the American landscape until you drive through some of these areas.
Acclaimed consulting winemaker Stéphane Derenoncourt gave an interview earlier this month to the French newspaper Le Monde in which he acknowledged preparing special cuvées expressly for the annual Bordeaux en primeurs tastings. Derenoncourt told Le Monde that the en primeurs blends are put into barrel sooner than the rest of the vintage so that they taste more evolved than would otherwise be the case six months after the harvest. Decanter magazine picked up the story last week and cited a handful of winemakers confirming that this is standard practice in Bordeaux. One winery owner, Yann Bouscasse of Châeau Cantinot, confessed that he gives different samples to different critics; some taste from new oak barrels, others from older barrels. “James Suckling, Neal Martin or Robert Parker will get a new barrel,” Bouscasse said, “while Gault Millau, or Revue du Vin de France, will get second or third use. American tasters can cope better with oak—Suckling likes a wine with more body.” Setting aside the fact that Martin is British, not American, Bouscasse’s candid remark calls to mind Michael Kinsley’s famous definition of a gaffe: it is when a politician accidentally tells the truth. I might have more to say on this topic tomorrow, but I am just curious: is anyone surprised to learn that the Bordelais are doctoring up samples for critics?
Bloomberg Pursuits, a quarterly magazine published by Bloomberg, recently sent me to Tokyo to do a story about the city’s culinary scene. Hardship duty, I know—it was a delicious assignment (despite an epic case of jet lag), and I came away convinced that Tokyo is the best food city on the planet. By the end of my week in Tokyo, the only outstanding question for me was how quickly I could get back there (soon, I hope). The story was posted last week; here’s the link, if you’d like to have a look. I thought I’d also use this opportunity to share some of the photos I took in Tokyo—a mix of food porn and street scenes. (I posted two of these pictures back in March. Please forgive the repetition, but really, who could ever get tired of looking at blowfish sperm sac?)
I’m delighted to report that my Vanity Fair article about Rudy Kurniawan won a James Beard Foundation journalism award. The awards ceremony was held Friday night in New York. I’d been nominated for Beard awards in the past but had never won—I just figured it was my destiny to be the Susan Lucci of the Beards. But Lucci eventually got her Emmy, and now I’ve got a Beard.
Several people near and dear also won Beards. Jancis Robinson, along with her co-authors Julia Harding and José Vouillamoz, was awarded a Beard for her remarkable opus, Wine Grapes: A Complete Guide to 1368 Vine Varieties, Including Their Origins and Flavors. Roger Sherman won for The Restaurateur, his outstanding documentary about Danny Meyer, and the Canal House ladies, Melissa Hamilton and Christopher Hirsheimer, won a Beard for their terrific book, Canal House Cooks Every Day. It was a fun evening that ended with a rollicking after-party at David Chang’s restaurant Má Pêche, where much wine and many pork buns were consumed. (On Twitter yesterday, Chang indicated that he is considering taking the pork buns off the menu because “pork belly doesn’t grow on trees.” I trust this has nothing to do with the fact that I ate around a dozen pork buns at the party—they are addictive little bastards, and I was starving.)
The Beard journalism awards were on Friday; last night, they held the Beard restaurant and chef awards, during which several people were inducted into the Who’s Who of Food & Beverage in America. This year’s inductees included Dorothy Kalins, a mentor to my wife and easily the most influential figure in my household (I rank sixth, after the puppy), and my excellent wine writing colleague Eric Asimov. Congratulations to Dorothy and Eric for these richly deserved honors.
Lastly, an update on the Kurniawan saga. Yesterday, U.S. District Judge Richard Berman said that he will allow three Burgundy winemakers, Aubert de Villaine, Christophe Roumier, and Laurent Ponsot, to testify by videotape at Kurniawan’s trial, which is scheduled to begin September 9. Federal prosecutors had expressed concern about that date because it would likely conflict with the harvest and would make it impossible for the winemakers to testify. So for the moment, at least, September 9 remains the start date.
“The jihadist movements of non-sulphured wines, green, under-ripe wines, low alcohol, insipid stuff promoted by the anti-pleasure police”—Robert Parker via Twitter, 5/1/2013
An Al Qaeda safe house in Waziristan, Pakistan
Sheikh Omar: Khalid, I asked you not to disturb me until lunch hour.
Khalid: I am sorry, Sheikh Omar, but I felt obliged to bring this to your attention immediately. This Blobber Parker—he is on to us once again. Look at what he wrote yesterday.
(Khalid places his iPad in front of Sheikh Omar).
Sheikh Omar: He is indeed on to us. But we have no need to silence him; he is helping our cause.
Khalid: I’m afraid I do not understand, Sheikh.
Sheikh Omar: Yes, Blobber Parker sees that we are using wine as a tool of jihad. He is a very intelligent man, with a keen nose for wine mischief; he once met with the FBI and taught them everything they know about fake wines. But no one believes Parker anymore. He was for many years a powerful wine critic, the most powerful wine critic, but now his people mock him. They regard him as a sodden fool shouting at the voices in his head. The more he talks about jihad, the more they scorn him. They believe the opposite of whatever he says. He is an asset for us.
Khalid: So he is a prophet in the wilderness, one might say.
Sheikh Omar: In a manner of speaking, but “prophet” is perhaps not the right word. I’m not such a stickler, but some of our brothers might not appreciate you referring to an infidel as a prophet.
Khalid: You are right; let me rephrase that. He is a wise, benevolent emperor shunned by his demented people. But tell me, Sheikh, for I have never understood: how is wine part of jihad?
Sheikh Omar: Khalid, we have studied these people closely.
Khalid: These people?
Sheikh Omar: Americans. We have studied Americans very closely and know them better than they know themselves. They are a decadent, hedonistic people. They savor the pleasures of the flesh and the pleasures of the table, and they naturally prefer decadent, hedonistic wines. In contemplating some of the more subtle ways in which we could break their will—what we call “soft jihad”—it occurred to us that if we could persuade them to renounce wines of pleasure, to turn away from the wines that truly made them happy, we could weaken them, weaken their resistance to us.
Khalid: Genius. But how did this happen?
Sheikh Omar: Burgundy. We convinced the infidels that the wines of Burgundy were the true wines of pleasure.
Khalid: And that’s not the case?
Sheikh Omar: Ha! Have you ever tasted that shit? I spit it out, of course, but I tasted Burgundy, and it was just as this Blobber Parker said—thin, acidic wine that only a person who hates flavor, who hates pleasure, who hates life and little children and puppies, could possibly like. The aroma was like the breath of a thousand camels, and it is said that all great Burgundies smell like this. Do you know what DRC really stands for? Dirty rotten crap. Blobber Parker saw Burgundy for the cruel hoax that it was, and he tried valiantly to stop his people from smiting their palates with these emaciated, insipid wines.
Khalid: So how did we convince them that Burgundy was good?
Sheikh Omar: We found impressionable young sommeliers, and we played on their vanity. We told them that Parker had a grudge against Burgundy, that his palate was shot from too much high alcohol wine and too much Flannery’s beef, and that they could become the new tastemakers by championing the wines of Burgundy. Once we had the sommeliers duped, the stupid journalists fell into line, and consumers soon followed. We also planted people on wine discussion boards, where they would rave about Burgundy, and this further helped lead the infidels astray.
Sheikh Omar: It was worked out better than we ever imagined. These pathetic Americans have convinced themselves that the path of righteousness leads to Burgundy. In fact, it is the road to dhimmitude, and to the restoration of the caliphate. Beaune is the new Vienna, and this time, Insha’Allah, we will breach the gates.
Khalid: Do they really like Burgundy?
Sheikh Omar: They think they like it, they tell themselves they like it, but you can see that they are not deriving any pleasure. The wines are thin, and so are their smiles. They now completely shun the wines that they most enjoy. They are a demoralized people. Their economy is terrible, they’ve run out of good reality shows, they turn to wine for solace, and all they get is flavored water. And it is not just Burgundies that they torture themselves with: they drink cadaverous, vegetal wines from other places, too. They are even forcing winemakers in California to produce such wines. California, the land of sunshine, and they make wines that taste like they came from an outhouse in the Loire—can you imagine? It is a nation gone mad, a nation of wine masochists. And I must tell you something else: we have also conspired to deprive them of the wines they used to prefer.
Khalid: How so?
Sheikh Omar: Do you remember a few years ago when I and several of our brothers cheered the news that thousands of bottles of an Australian wine called Mollydooker had been destroyed in a warehouse accident, and how I went around all that day calling myself the Mollydooker Sheikh?
Khalid: Now that you mention it, I do.
Sheikh Omar: That was no accident; we did that. Besides persuading Americans that the worst wines are really the best wines, we have tried to reduce the supply of wines that they actually enjoy. Some of our brothers in captivity were very cunning—they convinced the infidels that the harshest way to waterboard them was to use Mollydooker. The fools have gone through hundreds of bottles of this glorious wine because they think it is compounding the torture. But they are the ones tortured by it: they now treat it as if it is poison. They wear Hazmat suits while opening the bottles and make sarcastic comments about the high ratings that Parker gave Mollydooker.
Khalid: And what do our brothers think of the wine?
Sheikh Omar: They love it. They don’t try to drink it, but it gets in their mouths anyway, and they say it is very tasty. In fact, they think Parker was too restrained in his praise of Mollydooker.
Sheikh Omar: I feel sorry for this Blobber Parker—as sorry as I can feel for an infidel. He recently sold his business, and a life of luxury now awaits him. And yet, he persists in trying to save his countrymen from themselves. He knows what we are up to, he knows we are using wine to wage jihad and to slowly drain Americans of their zest for life, and all he gets in return is the mockery of an ungrateful nation. The Americans are unworthy of such a man, and they will come to regret their failure to heed his many warnings. In turning away from hedonistic fruit bombs, they have disarmed themselves, and they will pay dearly for this mistake, Insha’Allah.