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London whisky fraudster could be the "Rudy Kurniawan" of UK spirits

Published:  02 March, 2017

A scuppered fraud operation has revealed "levels of sophistication never before seen in fraudulent spirits production", involving hundreds of counterfeit bottles of whisky and other spirits.

The large-scale case of fraud was unearthed by the Metropolian Police this week, leading to the arrest of a 41-year-old man working in the London area.

The ruse involved the refilling of hundreds of old and rare bottles of whisky, rum and other spirits with cheaper, younger liquids, which were then sold alongside the dealer's genuine collection.

The operation was brought to light after fraudulent whisky bottles landed on the desk of employees at Whisky.Auction.

After contacting police, the bottles were traced back to an address in London, where hundreds of counterfeit bottles were being stored alongside genuine items.

Speaking to Harpers this morning, Whisky.Auction director Isabel Graham-Yooll likened the "sophisticated and prolific fraudster" to the case of Rudy Kurniawan in the US, who become notorious worldwide as the world's biggest wine fraudster.

In 2014 he was sentenced to 10 years in a California prison.

It's too early to tell the full extent of the operation.

But based on the size of the collection, the cost to the buyers and private collectors could be in the hundreds of thousands of pounds.

"Freak bottles regularly turn up on the market and any serious collector will have been offered fakes. But it's rare find to find something of this scale and to be able to trace it back to the source," Graham-Yooll said.

"We don't know who exactly he was selling to, but the more we look into it, the more we realise how many people have been effected. We've already had lots of people coming forward. I think the cost is going to be huge." 

The fraud industry is growing thanks to increasing sophistication of technology and rising demand for wine and spirits collectibles. 

Last year, research from Netnames found that between $300m and $400m is lost globally every year to fraudsters and that there is currently around $100 of counterfeit wine in circulation.

Alarm bells began to ring for Graham-Yooll and her team after they noticed small and subtle anachronisms in items which had been submitted to be sold under auction. 

"Things began to attract our attention: the bottle not matching the label and the cork not being quite right. All of these things change over time and with fashions. It can be very subtle, and that's when you need an expert eye.

"A lot of selling happens peer-to-peer, and that's where the highest risk is. It's a problem. We're glad that we've been able to take a sophisticated and prolific fraudster out of the spirits community. This is something that effects everyone in the trade and something everyone has to be alert to."

The suspect was arrested on suspicion of Fraud by False Representation and has since been bailed pending further investigation.

Graham-Yooll thanked the Metropolitan Police for their work, but also highlighted the importance of garnering publicity around fraudulent cases to ensure wine and spirits fraud is taken seriously.