How Wine Fraud Works

To fake an expensive wine, you have two options: tamper with the bottle or mess with the wine inside. For the first method, you can buy bottles of perfectly good wine and plaster on the label of a much better one. Sometimes all you have to do is replace one digit of the vintage year or blur a few numbers on the aging cork.

For the second method, the bottle is legit, but the wine is fake. There is a brisk business on eBay in empty wine bottles from exceptional vintages like a 1982 Chateau Lafite-Rothschild [source: Goldstein]. Once you possess a real bottle, the trick is to mix up a convincing cocktail of quality Bordeaux and a shot or two of California red to pass the sniff-and-spit test.

Even better, many collectors view their most expensive bottles as too precious to drink. As long as the bottle passes muster, the con artist is in the clear.

Wine fraud is not an exact science like reverse engineering a $500 iPad and selling it in China as a $17 iPud. The experience of drinking wine is extraordinarily subjective and greatly influenced by the name on the label, the experienced (or inexperienced) palate of the drinker, and the price paid for the bottle.

Given the extreme subjectivity of wine, a successful wine forger must sell more than a convincing label or even an excellent tasting wine; he must sell himself as an avid collector and trusted wine expert. That's the best way to create the illusion that the $10,000 bottle in your hand is not a well-packaged fraud, but the "priceless" real deal.

Successful con artists throw lavish marathon wine-tastings and Dionysian dinner parties in private rooms at the most exclusive restaurants. It's no coincidence that the most expensive bottles are often uncorked at the end of the night, when the guests are too loaded to know the difference between a 1945 Mouton and a boxed Bordeaux from Costco [source: Keefe].

Next we'll look at two of the most brazen cases of wine fraud.

One of the most accomplished wine frauds in recent history is Rudy Kurniawan, sentenced in 2014 to 10 years in prison for his crimes. Kurniawan's exploits as a wine fraud were brilliantly chronicled in a 2012 Vanity Fair profile by Michael Steinberger.

From that article, we learn that Kurniawan came to America from Indonesia as a teenager and fell in love with wine with his first sip of the high-end California wine Opus One. Bankrolled by what he said was family wealth, Kurniawan launched an expensive wine habit in his 20s, buying millions of dollars of rare bottles at auction and splurging for elaborate parties with bar tabs in excess of $250,000.

Once Kurniawan amassed an impressive collection of rare vintages, he began selling them. At two auctions alone in 2006, Kurniawan sold thousands of bottles for $35 million, including a few bought by Bill Koch.

But Kurniawan, FBI investigators ultimately discovered, was a wine fraud of the second school: real bottles, fake wine. After his lavish wine-tasting parties, he demanded that restaurants ship him the empties. Back home, he would fill the bottles with off-label versions from the same region or concoct his own custom blends using his talented nose for detecting subtleties of flavor. Koch sued Kurniawan in 2009 for selling him counterfeit booze, but it was the fed's criminal investigation that landed him in prison for mail fraud [source: Steinberger].

The second most famous wine cheat is still at large. German collector Hardy Rodenstock, born Meinhard Goerke, was the con-man genius behind the "Jefferson Bottles," 1780s vintages of Chateau Lafite bearing the scrawled initials of famous Francophile Thomas Jefferson.

Like Kurniawan, Rodenstock cultivated a colorful reputation as a globetrotting millionaire with exceptional taste. His greatest talent, though, was finding previously undiscovered cellars containing some of the world's rarest vintages. The Jefferson Bottles, Rodenstock insisted, were discovered behind a brick wall in a Paris basement [source: Keefe]. The address, conveniently, remains a secret.

Koch and fellow billionaire Christopher Forbes bought several of the hand-blown, wax-capped Jefferson Bottles at auction for hundreds of thousands of dollars a pop.

They became the crown jewels of Koch's collection, and he solicited historians from Monticello — Jefferson's estate in Virginia — to fill in the backstory of the wine's provenance.

To Koch's severe displeasure, the Jefferson experts reported the bottles were likely counterfeit, since they never appeared in Jefferson's meticulous records. Secondly, Jefferson typically signed his name "Th:J" in letters, but the initials on the bottles were "Th.J" [source: Keefe].

To solve the mystery, Koch employed an ex-FBI agent named Jim Elroy to scour the globe for clues. What did he discover?

Jim Elroy learned about a nuclear physicist in France who might hold the key to unlocking the true age of the wine inside the Jefferson Bottles. The physicist, Philippe Hubert, is an expert in dating objects by detecting levels of cesium-137, a radioactive isotope of the element that didn't exist before the explosion of the first atomic bombs over Hiroshima and Nagasaki in 1945. If the Jefferson Bottles are as old as Rodenstock claimed they were, the grapes used to make the wine should not contain any cesium-137. Hubert had used this method to debunk several other supposedly ancient wines [source: Keefe].

For Koch, though, cesium-137 wasn't the smoking gun. The test showed no radioactive elements, meaning the wine was produced before 1945. But 160 years before 1945? The killer clue turned out to be on the bottle, not in it. Consulting glass and tool experts, Elroy concluded that the etching of "Th.J" on the bottles could only have been done by modern dentist's drills, not 18th-century copper wheels [source: Keefe]. Koch sued Rodenstock, but the German citizen claimed immunity from U.S. prosecution and continues to collect and sell wine as of 2014.

High-profile con men aren't the only wine fraudsters in on the game. Knockoff outfits in China are selling cases of counterfeit product supposedly from high-end California wineries, and legions of smaller con artists are flooding the auction circuit with fakes. One wine expert believes that 80 percent of pre-1980 Burgundies sold at auction are counterfeit [source: Steinberger].

To protect their investment and calm jittery buyers, some wineries are investing in technology that authenticates their bottles. A company called Prooftag sells a product that creates a one-of-a-kind "bubble seal" — like a fingerprint — on the neck of the bottle [source: Gannon]. The bubble pattern, along with a scannable QR code, tracks the bottle back to the winery. Another company, Applied DNA Sciences, can embed invisible, encrypted DNA tags into the wine's label. The DNA information cannot be replicated or even detected by counterfeiters [source: ADNAS].

Further, the California label Opus One has invested in a tamper-proof capsule that changes color once the bottle has been opened. There's also a chip on the back label that can be scanned with a smartphone to give information on the wine as well as its precise location. [source: Stephens].

But all of this new technology isn't much use to collectors like Koch, who crave bottles from the pre-digital age. For his part, the retired billionaire doesn't dwell much on being duped. As Koch said in a 2007 article about the Jefferson Bottles in The New Yorker, "I used to brag that I got the Thomas Jefferson wines. Now I get to brag that I have the fake Thomas Jefferson wines."