[Music] billions of dollars circulate the wine industry every year whenever that much money is involved people will always be lurking in the shadows trying to cheat the system Rudy Kearney Awan was a wine enthusiast he was the toast of the town among high-end dealers and collectors however he was also a criminal and the mastermind behind the largest underground wine operation in history but how exactly did he scam wine how big did his shady system grow and what was the clue that allowed the FBI to pounce and finally closed a case that had gone on for
years cheers to that let's find out Americans love wine that's just a fact the United States is by far the largest consumer of wine in the world downing four point three billion bottles of wine per year most of it however isn't made in the US but over in Europe the three biggest wine producers in the world Italy France and Spain together accounts for 51% of world wine production that's over half of the 270 million hectoliters annually produced whatever we look at it that's a lot of wine and it adds up to a lot of money
being passed around over 61 billion dollars in the USA alone with bottles raking in as much as 60% profit each while you can pick up a bottle for a few bucks at the local liquor store that's just one end of the spectrum bottle prices vary radically just like art wine is collectible we've witnessed bottles of Chateau Margaux 1787 Chateau Lafite 1869 and Cheval Blanc 1947 sell for well over $200,000 however it's a 73 year old bottle of French burgundy that reigned supreme drawing in a nearly incomprehensible 558 thousand dollars at an auction in 2018 the
1945 romanée-conti became the most expensive bottle of wine ever sold so whether it's a merlot cab pinot noir champagne or even a sweet port you can clearly see that there is a monumental amount of cash spent by the wine aficionados of this world of course when stacks of money that big or at play there's always someone ready to bend the rules and exploit the system this is Maureen oh no she's not the one doing the exploiting she's the one helping to squash it she is one of the world's foremost experts on wine fraud affectionately dubbed
the Sherlock Holmes of wines and according to Maureen the face value of counterfeit wines in circulation easily exceeds several billion dollars it's not even solely wines that are ripped off it's all types of alcohol spirits are actually targeted for counterfeiting more frequently than wine however there's a noticeable difference in why we see more fake Shiraz than fake ripped-off rum the spirit industry attacks the issues of counterfeiting head-on because they're usually larger firms with extra money in the bank the wine landscape on the other hand is chock-full of small companies and independent family-run vineyards even if
they're not small they're discreet the French labels for example often choose not to press charges when finding fake bottles preferring to keep their name and reputation squeaky-clean one of the shady characters responsible for this ongoing counterfeiting is a name that's sat on the FBI's watch list for a very very long time taking the wine auction industry by storm was none other than this man Rudy turn you on he had a fondness for wine when he first started rubbing elbows with the high rollers at auctions but he also had a fondness for breaking the rules when
we consider the damage he did to the industry if we fast forward to today the wine markets have never fully recovered they're still rattled with pricing uncertainty and skepticism because of Rudy's mischievous antics don't pop your cork just yet cuz we'll get back to Rudy a little later for now there's a question we need to answer how can someone counterfeit wine in the first place well technically it's not the wine itself that you're ripping off but the bottle as a scammer it doesn't matter what you're putting inside the bottle so long as on the outside
it looks authentic at the point of sale let's take a peek at an example say the romanée-conti D'Arcy from burgundy in France a 1996 vintage by the way vintage doesn't necessarily mean old or classic like say a vintage Mustang in the world of wine making vintage simply refers to the year it was produced anyway a set of eight of these bottles fetched two hundred and twenty four thousand nine hundred dollars at auction by Sotheby's London in 1996 so we know there's value attached to the brand the bottle and the vent now how would someone like
Rudy forge a bottle there are a number of ways to do it actually first off there's replicating the counterfeiter can print their own romanée-conti labels and shape their own bottles although the more expensive the target wine the more precision is needed in the knockoff bottle and labelled there's also what the wine fraud industry calls unicorns a perfect example of this would be if we tried to sell you something that we claimed to be a 5 liter bottle of high-class 1945 Chateau Cheval Blanc from Bordeaux if you did some digging you'd realize the black and white
fact the 5 liter size was not introduced in Bordeaux until 1978 it exists only in the mind of the scammer and the fool who falls for it the total value of fake wine according to Maureen Downey is around 3 billion dollars and it's estimated that 20 percent of all bottles are scams sometimes they're cheap and easily distinguishable such as fraudsters changing the label from the Australian Penfolds brand to Penfolds with an eye where the L should be and hoping buyers won't notice the difference other times like in Rudy's case the bottles are exact counterfeit copies
even though wine makers are adding more and more details to their labels to throw off scammers there's still one glaring problem - counterfeiting prevention what's the best way to fake an authentic bottle avoid it being fake in the first place by which we mean finding a real legitimate bottle and simply refilling it with dirt cheap wine as long as you're clever enough to think of all the factors like the old discolored cork then it's a huge illegal moneymaker often high-end restaurants forget to destroy the bottles so a clever dumpster diver could relatively easily intercept a
potential gem the invisible ink and micro writing on the labels used to deter counterfeiters would already be there since the bottle is authentic of all the people's scammed by Rudy Kearney on there were seven main victims one of those was william koch were bill for short a billionaire yachtsman entrepreneur and wine investor 20,000 bottles of fine and rare wine from bill's personal collection went to auction in 2016 fetching a staggering twenty one point nine million dollars so as you can see he didn't mess around when it came to buying exclusive expensive wines a few years
earlier when bill realized that some of the bottles in his collection were a ruse he hired private Actives that would prove to be one of the first steps in taking down the greatest wine scammers of all time yep that'd be Rudy based on the notion that 20% of wines around the world are shady we can infer that scams cost bilko at least 4.4 million dollars now let's swivel our attention back to Rudy the cunning wine fraud who set new records in wine deceit in disguise although clearly not cunning enough in the end otherwise he wouldn't
been caught hidden away in his California home Rudy had built a fully equipped counterfeiting workshop that allowed him to execute his simple yet brilliantly effective underground operation on hand he had a variety of corking tools label makers an array of empty bottles in all shapes and sizes and extensive tasting notes the method placed new wines in old bottles expensive on the outside trash on the inside knowing full well that the most expensive wines are so rarely drunk that few can claim to actually know how they're supposed to taste okay so what about distribution the key
to all of Rudy's sales came from his persona Rudy was able to establish a name for himself in the industry it was this industry reputation as a rare wine connoisseur and the trust that came with it that helped him to transition to fraudulent sales without so much as a weird look FBI Special Agents Jim Wine no relation to the product said it best these were not stupid people they just took it on faith that Rudy was telling the truth all in all Rudy's scam empire was valued at around five hundred and fifty million dollars hold
on a second why did the FBI let this drag on so long according to Maureen Downey it was because they constantly reached dead ends agents would dig until they had all the answers in front of them however neither the winemakers nor the victims would be willing to come forward and press charges they didn't want their reputation damaged as a collector or as a producer to which the FBI said well if you're not persecuting we're not gonna waste our resources and so wine fraud went on and on and on as the years passed authentification experts saw
more and more dodgy consignments emerging from these record-breaking auctions and whose name kept popping up Rudy's with the evidence mounting the FBI needed someone to get behind them they needed a mindset shift they needed companies and collectors to wants to persecute well that shift was coming it just needed a spark remember the unicorns we mentioned earlier selling something that doesn't actually exist well Rudy messed up by making one and getting caught in 2008 he offloaded a number of domain ponceau cloths saint-denis Grand Cru wines with vintages ranging from 1945 through 1971 Laurent Ponzo head of
domain pon so quickly interfered he stated that the cloth saint-denis variety had only been released for the first time in 1982 some 37 years later than Rudy was selling this was one of the key moments that paved the way for other French winemakers to join the hunt deciding to cooperate with investigators hoping to stop the fraud winemakers had started to become suspicious of all the outlandish claims that Rudy was making how could he have collected so many rare vintages where did he get all the money to create and resell an expensive collection it just didn't
seem right as soon as the FBI was approved for a search warrant it was game over the FBI stormed Rudy's home in Arcadia California on March 8th 2012 uncovering the lab and finding enough evidence to make an arrest amongst the findings were cheap Napa wines with notes indicating that they would be passed off as older vintages of Bordeaux at court despite saying he was sorry the verdict was unanimous Rudy was found guilty by a jury at trial in December of 2013 and was sentenced to a 10-year prison term for his elaborate counterfeiting scheme on top
of that they also found him guilty of bank fraud with more than 7 million dollars in outstanding loans not to mention that he had no legal immigration status in the country Rudy was forced to pay more than 28 million dollars in restitution to his victims and forfeit 20 million dollars to the authorities so what's the most expensive bottle of wine that you've ever bought let us know in the comments don't forget to Like subscribe and thank you for checking out the richest we'll see you next time
