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U.S. wine dealer on trial for faking labels and selling counterfeits

By Joseph Ax

NEW YORK (Reuters) - A California man who rose to become one of the country's most prominent rare wine dealers systematically defrauded collectors by printing forged labels and selling counterfeit bottles, a U.S. prosecutor told jurors on Monday.

Rudy Kurniawan, 37, transformed his computer into a "virtual ATM that printed out one-thousand-dollar bills in the form of fake wine labels," Assistant U.S. Attorney Jason Hernandez said in a federal court in New York, where Kurniawan's trial for mail and wire fraud began on Monday.

But his defense lawyer, Jerome Mooney, said that the rare wine market is plagued by counterfeits and that buying and selling fakes is common.

"If you're buying a lot of wine, you're going to buy a lot of counterfeits," Mooney said. "Everything that has been put together in this so-called case is just a house of cards."

Federal authorities allege that Kurniawan bought empty rare bottles and refilled them with a mix of lower-priced wines he acquired separately, before using his computer to replicate labels for highly coveted bottles.

In one instance, Kurniawan attempted to sell at least 84 counterfeit bottles purportedly from the French winery Domaine Ponsot at a 2008 auction in New York. One was supposedly bottled in 1929, even though the winery's first vintage was in 1934, prosecutors said. The bottles were withdrawn just before the auction, according to the indictment.

Kurniawan's motive, Hernandez said, was an "unquenchable thirst" for the finer things in life, such as luxury cars and expensive clothing.

But Mooney said his client, who was born in Indonesia, had always been an outsider and was simply trying to fit in with an insular crowd of rich, successful wine connoisseurs.

"He's always wanted to belong," Mooney said.

Prosecutors have also accused Kurniawan of lying to a finance company, Fine Art Capital, about his personal loans and his immigration status in order to secure a $3 million loan.

The trial is expected to last approximately two weeks.

The case is U.S. v. Kurniawan, U.S. District Court for the Southern District of New York, No. 12-376.

(Editing by Dan Grebler)

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