Case Study: The Real Fraud Behind Netflix's 'Sour Grapes'

Have you heard the tale of America’s first convicted case of wine fraud?

It’s the inspiration for the 2016 Netflix documentary, Sour Grapes. The story is so twisted, it’s no wonder Netflix jumped at the chance to produce a feature-length film covering this case.

We can’t blame them: It really does read like a Hollywood movie—an assumed identity, a secret lab, a bootleg wine operation, a cast of high-profile L.A. elites and multi-millions in fraudulent sales. For nearly 10 years, our main player was living large and rubbing elbows with some of Hollywood’s most elite...that is, until it all came crumbling down around him.

At the crux of this tale lays a side character, seemingly so small and unassuming that it’s often overlooked. But, as you read on, pay attention to this little detail—the wine labels—which became such a crucial part of this case that we can’t help but wonder: Could brand protection labeling have stopped the case that led to America’s first wine fraud conviction?

So, sit back, relax and pour yourself a glass of wine (just double- and maybe triple-check that you’re drinking the real thing) while we spin you this yarn. 

United States vs. Kurniawan

How It Started

Investigators aren’t exactly sure how this highly-profitable counterfeit operation began. What we do know is that our main character, Rudy Kurniawan, was an Indonesian immigrant who had overstayed his student visa issued in the 1990s. By 2003, he was ordered to leave the country voluntarily; but in 2004, Kurniawan was not only still in the U.S., but he had already begun the counterfeit operation that would eventually defraud wine enthusiasts and investors out of millions of dollars. 

The Ruse

It’s no secret that investors and collectors are always on the lookout for old and hard-to-come-by wines. But getting your hands on such rare bottles costs a pretty penny, and Kurniawan took that opportunity when he saw it. 

At first, he emerged onto the California wine scene posing as just another investor and collector of fine wines. Over time, he created relationships with prominent collectors and auctioneers, which gave him better access to authentic wines of the Burgundy and Bordeaux varieties which he would later imitate. 

He took that information and put it to use—noting the taste profiles of the most luxurious wines and experimenting with lower-cost varieties in an attempt to recreate the flavor. Soon, Kurniawan was “brewing” his own batches of wine in his home in Arcadia, California, and rebottling them with labels inaccurately dated from the 20th century and, in some cases, as early as 1899.

Rolling in Profit

It wasn’t long before Kurniawan was making millions. Through his connections, he auctioned off his counterfeit wines to unsuspecting collectors. He even beat the record for most profits in a single day at an auction house in 2006—to the tune of $24.7 million. On another occasion, a single collector forked over more than $2 million for 219 bottles of wine. 

In total, as many as 12,000 bottles of fake wine were sold by Kurniawan, some of which may still remain in private collections. 

And what did he spend all that money on? It funded his high-end lifestyle. Kurniawan regularly paid for fine food and wine for himself and his connections. For himself, he purchased several luxury vehicles, designer clothes and goods. 

It Falls Apart

Rubbing elbows with such prominent figures came with great visibility to his customers. Many counterfeiters attempt to fly under the radar, selling online where they can remain anonymous and where transactions are faceless. 

This was one luxury Kurniawan couldn’t buy. The nature of his counterfeit operation meant that he was on a first name basis with the very people he was fleecing. And, like anyone who flies too close to the sun, cracks soon began to show in his lies. 

Kurniawan’s undoing was the very thing that brought him profit—auctions. 

As early as 2007, several of the bottles he put up to auction were determined to be inauthentic. In 2008, a wine valued at $600,000 was pulled from auction before it could be sold. 

The reason? Kurniawan began to get sloppy. The wine he had tried to auction had a label from 1929—but the authentic wine he was trying to copy wasn’t bottled until 1934. Later, other wines he passed off as being from the 1940s and 1970s were labeled for a winemaker that didn’t begin operating until the 1980s. 

The FBI Gets Involved

After receiving multiple tips about Kurniawan’s fake wines, the federal government raided his home in 2012. There, they found up to 50 empty bottles and hundreds of supplies like funnels, corks and wax for resealing the bottles. Later, the FBI confiscated 19,000 bottles of counterfeit wine from Kurniawan’s home. 

Conviction & Deportation

In 2013, Kurniawan was found guilty of counterfeiting and ordered to pay more than $28 million in restitution. His assets were also seized, resulting in the forfeiture of $20 million from Kurniawan’s estate. He received a 10-year sentence for his crime and, in 2021, Kurniawan was deported back to Indonesia. 

"Cheers!" to the teams that worked tirelessly to secure this conviction.

Key Takeaways

This conviction was a rare occurrence. Due to the faceless nature of most counterfeit operations, even when fake goods are found and seized, the criminals can rarely be prosecuted. 

The cornerstone of Kurniawan’s operation was his ability to imitate genuine wine labels that made his fake wines look like the real deal. 

So, what does that mean for you?

This story highlights the important role labels play in how consumers determine what is an authentic product. Many counterfeiters like Kurniawan find that product labels are easy to scan, copy or duplicate, making it even harder for consumers to determine what is real and what isn’t.

The best way to fight counterfeiting: Brand Protection Labeling

Secure labeling is the direct answer to counterfeiters like Kurniawan. Mixing both human-visible and micro-features, these Anti-counterfeiting Labels create a unique, intricate shield that protects you against fraud. 

How Brand Protection Labeling works: 

1. Anti-counterfeiting Labels combine a variety of features that are hard to replicate and impossible to copy or scan

2. Tamper-evident Labels provide tangible evidence of tampering by either leaving behind adhesive material or including void messaging on that material

3. Traceability Labels leverage unique serial numbers and barcodes to create a two-factor authentication for shipments as well as allowing you to track products digitally throughout the entire fulfillment process

The one-of-a-kind label created by the combination of these features create a bullet-proof shield that protects your products from counterfeiting.

About GBS

With more than 50 years of print experience, GBS is poised to help brands like yours secure their products from counterfeiting.

Our in-house label printing capabilities and strong network of business partners allow for endless brand protection possibilities. With the latest in print technology at our fingertips, we work with you to create highly-advanced, custom-designed Brand Protection Label Solutions to fit your exact needs.

Sources:

Cumming, Ed. “The Great Wine Fraud.” The Guardian, Guardian News and Media, 10 Sept. 2016, https://www.theguardian.com/global/2016/sep/11/the-great-wine-fraud-a-vintage-swindle.

Jablon, Robert. “Former L.A. Wine Fraudster Rudy Kurniawan, of 'Sour Grapes' Notoriety, Is Deported.” Los Angeles Times, Los Angeles Times, 14 Apr. 2021, https://www.latimes.com/world-nation/story/2021-04-14/sour-grapes-wine-fraudster-rudy-kurniawan-deported.

“Prominent Wine Dealer Rudy Kurniawan Sentenced in Manhattan Federal Court to 10 Years in Prison for Selling Millions of Dollars of Counterfeit Wine.” FBI, FBI, 7 Aug. 2014, https://www.fbi.gov/contact-us/field-offices/newyork/news/press-releases/prominent-wine-dealer-rudy-kurniawan-sentenced-in-manhattan-federal-court-to-10-years-in-prison-for-selling-millions-of-dollars-of-counterfeit-wine.

“Rare Wine Dealer Sentenced in Counterfeiting Scheme.” FBI, FBI, 5 Sept. 2014, https://www.fbi.gov/news/stories/rare-wine-dealer-sentenced-in-counterfeiting-scheme.