It was a warm fall day in October 2005, and Mark Anderson, a 300-pound man carrying a bucket of gasoline-soaked rags, was definitely up to no good.
He walked into the massive Wines Central warehouse in Vallejo, Calif., where some of the world’s finest wine was stacked on pallets “40 feet high stretched the length of two football fields.”
He lit the rags with a propane torch, dropped them along the pallets of wine and hauled out of there, running as fast as his massive frame would allow. By the time he was done — it took firefighters eight hours to control the blaze — he had destroyed “more than 4 ¹/₂ million bottles of premium wine . . . worth more than a quarter-billion dollars on the retail market. It was the greatest crime involving wine in history.”
But the fire, as veteran journalist Frances Dinkelspiel lays out in her new book “Tangled Vines,” was just the latest, nastiest blow to the industry, as wine fraud had already cast doubt on the identity of some of the supposedly finest wines in the world.
In the past decade, rare wine collecting has taken two major hits.
The first centered around a mysteriously wealthy Indonesian named Rudy Kurniawan, who was “the boy wonder of the fine-wine world,” spending as much as $1 million a month “to acquire coveted varietals.”
Kurniawan joined three wine-tasting groups — BurgWhores; Deaf, Dumb, and Blind; and the Royal Order of the Purple Palate — whose members included “Hollywood directors, movie producers and business managers for A-list stars. He started to meet movie stars, like Will Smith and Jackie Chan, and treat them to gourmet dinners filled with special wines.”
At one especially memorable gathering in 2004, Kurniawan and friends “went on a four-day eating and drinking binge at Cru, a restaurant just north of Washington Square in New York famous for its 150,000-bottle wine list.”
The bottles emptied that night contained what wine writer Michael Steinberger called “a murderer’s row of legendary wines,” including “a 1945 Mouton Rothschild, a 1964 Romanée-Conti, and a 1971 La Tache, wines so rare and expensive few had ever had the pleasure of drinking them.”
The bill for the meal came to $250,000, which Kurniawan paid with his American Express black card.
But while the night propelled Kurniawan into “the upper echelons of the wine world,” it ended on a strange note, as Kurniawan asked the restaurant to send the empty bottles to his home.
In 2006, Kurniawan enlisted an auction house to sell off wine from his collection, which was so spectacular that, for its first time ever, the house held an entire auction for just the one seller. Promoting Kurniawan’s collection, which included some of the rarest wines, they called it, “the greatest cellar in America.”
The auction took in $10.6 million, making it “the largest single-owner sale ever by an American collector,” although Kurniawan eclipsed it soon after with an auction that raised $25.7 million.
Two years later, though, at a similar auction, the bloom came off the rosé. Included in the bottles for sale were “268 bottles from three French Burgundy estates,” including a 1929 Ponsot Clos de la Roche from Domaine Ponsot. When Laurence Ponsot, the estate’s proprietor, heard about the sale, he was “immediately alarmed,” since his family only began “producing wine under its own name” in 1934.
At Ponsot’s insistence, all 97 of his bottles were pulled from the auction — about $1 million worth. One Kurniawan customer who got wind of the fraud was William Koch, brother of David and Charles Koch. William is an energy magnate in his own right, and owner of “one of the world’s most impressive wine collections, with 43,000 bottles scattered across his two cellars.” Koch had spent over $2 million on Kurniawan’s wines.
After discovering that $4.5 million worth of wine in his collection (not all Kurniawan’s) was fake, Koch became the most determined enemy wine frauds could have, spending $30 million to $40 million in the coming years to uncover frauds and bring the perpetrators to justice. He also sued Kurniawan and the auction house in 2009. In time, it was discovered that Kurniawan’s home, which he shared with his mother, was “a veritable wine-counterfitting factory,” with bottles and fake labels everywhere. Federal agents uncovered intricate recipes for reproducing the taste of classic wines. “One recipe for a fake 1945 Mouton Rothschild called for ‘one-half 1988 Pichon Melant; one-quarter oxidized Bordeaux; and one-quarter Napa cab.’”
Kurniawan settled with Koch, paying him $3 million and agreeing to share everything he knew about wine fraud. In August 2014, he was sentenced to 10 years in prison, fined $20 million and “ordered to pay $28.4 million to seven victims.”
But the actual damage Kurniawan did to the wine world is immeasurable, as the fake wine he sold is spread throughout collections across the globe.
“Some say Kurniawan’s deceit has tainted — perhaps irreparably — the rare-wine auction market,” writes Dinkelspiel. “Global auction sales of rare and fine wines dropped 19% in 2012 and another 13% in 2013, and some observers believe the doubts about provenance are partially to blame.”
As harsh as that sounds, the damage done by Anderson might be even worse.
Anderson was a man about town in the Sausalito area who wrote hob-nobby columns about town goings-on and sat on the boards of local organizations. He also spun wild yarns, telling people he “invented voicemail,” or “managed the rock ’n’ roll band Iron Butterfly.” He also claimed to have been an Israeli spy and that he once had lunch with Chairman Mao.
In truth, he was living off his sickly father’s savings. The move created a horrible rift between Anderson and his brother, Steven, who created a website called Corpulent Raider to call out what he saw as his brother’s predatory behavior.
Dinkelspiel describes Anderson as “a self-taught wine connoisseur” who had a deep love of everything wine-related. “He loved wine so much,” she writes, “that he traveled regularly to Italy and France and spent much of his time eating and drinking.”
In August 1999, Anderson opened a wine-storage facility called Sausalito Cellars and the first few years saw robust business. Somewhere along the way, though, his finances took a fall, and it occurred to him that he had a large, valuable asset at his disposal: his clients’ wine collections.
Anderson began selling wine.
Over the next few years, he sold $279,418 worth of wine to one buyer and $296,235 worth to another. By 2002, his business had grown so successfully that he moved into a larger space.
By 2003, “Anderson had gotten into such a rhythm . . . that he didn’t even try to hide his illicit dealings from his employees. Anderson would pull out a box, strip off all signs of his client’s name and then hand the boxes over to a hired cellar worker to put in a van.” He was so open about his theft that one of his employees, on the space on his time card used to designate duties, wrote, “Helped Destroy Evidence.”
Later that year, a restaurateur client going through bankruptcy, Samuel Maslak, was ready to pick up the 756 cases of wine he’d stored with Anderson — worth about $650,000 — so he could sell them. When his driver arrived with a truck, though, he found just 144 cases. Anderson offered a furious Maslak a litany of excuses.
Word spread, and Anderson’s other clients began to check on their collections, only to find them largely emptied out.
His buyers stopped buying from him, but Anderson got around that by simply creating a new company under a new name and selling to the same people (who apparently weren’t well-versed in the art of background checks).
Despite the sales, business was faltering, and Anderson needed a new facility for Sausalito Cellars. He found it at Wines Central, a massive wine warehouse where he rented a 2,500-square-foot bin.
By 2004, Anderson was facing civil suits from numerous clients, and in April 2005 a SWAT team raided his home, finding “a stack of books on how to disappear.” Anderson, meanwhile, continued selling wine.
That June, the owner of Wines Central told Anderson he needed to leave the facility and have his inventory out by September. Anderson — who knew the owner before he opened the warehouse and helped him hunt for investors — considered it a betrayal. He seethed and threatened to sue.
But his biggest concern was that the law was closing in. Searching for a way out, he concluded that a fire at Wines Central would make the embezzlement charges impossible to prove, as he could always say that the missing wine had simply been misplaced and had been elsewhere in the warehouse at the time of the fire.
The prosecutor on the case later estimated that the Wines Central fire destroyed 4 ¹/₂ million bottles of wine worth around $277 million. Many small wineries had most or all of their inventory at Wines Central and learned that insurance would not cover their losses, as wine in a warehouse was considered “in transit.” Many wineries also stashed their libraries — samples of every wine they ever produced — at Wines Central. The fire wiped out their histories.
Anderson was arrested in March 2007 on 19 counts, including “arson, interstate transportation of fraudulently obtained property, mail fraud, use of a fictitious name in connection with a scheme to defraud and tax evasion.” He was sentenced to 27 years in prison, and ordered to pay $70.3 million in restitution.
After the fire, when Anderson was still just a suspect, someone — most likely his brother, Steven — posted, on the website he had set up to tell the world what an awful person Mark Anderson was, speculation as to Anderson’s motives.
“After being charged with embezzlement, Anderson set the warehouse ablaze in an attempt to destroy the evidence,” he wrote. “This is how Mark works . . . if he doesn’t get his way, he will wreck everything for everybody.”