Test Text1 plain Most of us reserve a fancy bottle of wine for a special occasion and then there are those who really go are foyt, spending a fortune for the best wine they can find. What happens when... See More
Test Text1 plain Most of us reserve a fancy bottle of wine for a special occasion and then there are those who really go are foyt, spending a fortune for the best wine they can find. What happens when that fancy wine has been whipped up in some guy's kitchen? Here's Brian Ross. Reporter: In a city that so celebrates glitz over substance, the fakes can be hard to spot. A perfect place for this master faker, a young, debonair bon vivant from Indonesia who, as these government photos showed, courted Hollywood with his seemingly exquisite taste with his knowledge of the world's finest wines. His name is Rudy kurniawan. He was generous and he had the juice. He wore Hermes suits, very expensive watches. He drove a bugatti he had a house in Bel Air. Living high on the hog and being the toast of the town. Reporter: Rudy was a regular at the top restaurants in los Angeles and New York. He was a big, big partier. Rudy picked up An $85,000 tab and he did that more than once. Reporter: And soon Rudy kurniawan's fame spread across the wine world. Known in auction houses as someone with rare wines that no one else could find. This is a 1961 Latour a pomerol that was basically unseen in the market for about 30 years. Reporter: Maureen Downey is a wine expert who helped to unmask Rudy's many fakes. And all of a sudden, Rudy kurniawan started mass producing them. And they were available kind of like crazy. Reporter: Snapped up, she says, as status symbols for the rich. You know, these bravado jackasses who, you know, my bottle's bigger than your bottle. Reporter: What they did not know was that Rudy's rare wine was not produced in some French chateau 50 years ago, but in this suburban Los Angeles home Rudy shared with his ailing mother. I like to call it his counterfeiting house of horrors. Reporter: In his kitchen, where he soaked the labels off French bottles, printed up new ones from the finest chateaus and then filled the bottles with a home-grown recipe of much less expensive wines that fooled millionaires and billionaires for a long time. He was an artist at this. Reporter: Pete Hellman helped break the story of Rudy kurniawan in the magazine "Wine spectator." And the fact that he made this wine in his kitchen must embarrass a lot of people? It does embarrass many people. It's humiliating. Reporter: And it's not just the wealthy who are being embarrassed and tricked. It turns out the world seems to be awash in fake wines of all kinds and prices. Just two weeks ago, authorities in Italy seized a shipload of fake bottles destined for overseas supermarkets. Police were tipped off by customers who reported a strange bitter taste. They discovered bottles filled with about $4 worth of low-quality chianti, that were labeled and meant to be sold as $40 bottles of Italy's top red wines. By some estimates, as much as by some estimates, as much as one-fifth of the wine sold in the world, in restaurants and stores, is fake, not really what's on the label. A consumer scandal that only began to be noticed in the wake of what Rudy kurniawan was doing in his kitchen. I mean, I think that in the last decade's produced well over $100 million in rare and fine wine. Reporter: And he had a good thing going until he crossed paths with the wrong billionaire. I'm Brian Ross, ABC news. I'm here for bill Koch. The man who lives in this oceanfront mansion in palm beach, one of America's wealthiest people. Bill Koch, who agreed to do something that few billionaires would ever consider, appear on "20/20," to admit he was a sucker, a sucker for fake wine. I bought a lot of them. You've called yourself a sucker. You're damn right. Pigeon, a sucker, whatever they call the mark. Reporter: Koch, whose billionaire brothers are known for the money they spend on conservative politics, is himself known for the money he spends on his passions, including wine and art. There's hundreds of millions of dollars' worth of art in his living room alone. And not a single one of them a fake, according to his experts. But downstairs in Koch's elaborate wine cellar, it is a different story. Laid out for us on this table just a few of the 400 to 500 bottles of fake wine that Koch says he was tricked into buying by Rudy and other fakers. This is a fake? That's a fake. Here's another one, 1805. 1805? Yeah, and that's fake. So when you bought an 1805 you thought, "I'm really buying a piece of history?" That's right, exactly. Instead I was buying, I don't know, moose piss. I've spent close to $5 million and it's all fake. Reporter: Koch was blissfully ignorant that he was a sucker, until he discovered these four bottles that supposedly came from the collection of Thomas Jefferson, but he says were produced by yet another a faker in Germany. Paid over $100,000 per bottle. $100,000 per bottle? Per bottle. Reporter: So Koch has gone on the offensive in a very public campaign against wine fakes. He went to the FBI and agreed to testify in court against Rudy kurniawan and then launched a series of expensive lawsuits. Are you spending more than you lost? Damn right I am. I've spent over $25 million to date. I cannot stand to be cheated. I want someone to know they sell me a fake, man, I'm coming after them no matter how much it costs. Reporter: As Koch admits, it's hard to have much sympathy for a man of great wealth to be parted from his money by a crafty faker. But, as we saw, it is almost enough to make a billionaire cry. Can any wine be worth $25,000, $100,000 a bottle? From your point of view is the taste that much better? You know, a Normal person says, "Hell, no, it isn't," but for me, the art, craftsmanship. Excuse me. You care about this? Oh, yeah. That goes into it, is worth that. Reporter: And as for Rudy, the bon vivant convicted as what prosecutors called the most successful wine fake in the world, a federal judge in new York will sentence him next month, and bill Koch plans to be there.
This transcript has been automatically generated and may not be 100% accurate.