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Friday 18 April 2014

Kurniawan owed ‘millions’

11th December, 2013 by Rupert Millar

Alleged wine counterfeiter Rudy Kurniawan was millions of dollars in debt to a major auction house the court heard yesterday as his trial continues in New York.

kurniawan trial

The Federal court in Manhattan where the trial is being held

According to AFP, the first witness called in the case, Barbara Chu, a senior banker at Emigrant Bank Fine Art Finance, said that he applied for a US$3 million loan in the autumn of 2007 despite already being $10m in debt.

He also lied about his residency status as he was technically living illegally in the US since his residency request was denied in 2003.

Chu told the court: “He said he needed to bridge the payments he received from his family and he wanted to create a new wine company.”

Fine Art apparently contacted a “specialist” who said that Kurniawan was “one of the top-five wine collectors in the world.”

According to Wine-Searcher, John Kapon, president of auction house Acker Merrall & Condit, vouched for Kurniawan’s credentials in a phone conversation with Fine Art.

Kurniawan put up part of his fine art collection to the tune of $6m as collateral for the loan but the bank was “approached” soon afterwards by lawyers from Acker Merrall which had apparently lent Kurniawan $8-$9m some time earlier.

Kurniawan’s defence counsel, Vincent Verdiramo, asked Chu why Kapon never mentioned the debt before Fine Art agreed the loan. Chu said he never mentioned it.

In 2008 Fine Art ordered Kurniawan to sell off his art collection, which included work by Andy Warhol and Damien Hirst, to clear the loan which was finally paid off in 2009.

The court was also shown physical evidence found at Kurniawan’s home which included bottles of wine, a bag of labels and a stamp with the name Screaming Eagle.

It heard from FBI agent James Wynne who told the court that: “We were looking for corks, capsules, labels, devices to extract corks, devices to rebottle, documents respecting wine transactions, and/or provenance.”

When asked if any items of that description were found he replied, “yes”.

Acker Merrall’s director of auction operations, Truly Hardy, was also called to the witness box where he was questioned in particular about two consignments Kurniawan had made in 2006 and 2008.

He confirmed that in the wake of the “Cellar II” auction in 2006, some buyers had returned lots or parts of lots to the auction house due to doubts over their authenticity.

Today’s witness will be Burgundian winemaker Laurent Ponsot as well as Douglas Barzelay, a retired attorney turned wine writer who has always been a fierce critic of Kurniawan.

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