An alleged investment fraud scheme claimed to broker loans between investors and ‘high net worth’ fine wine collectors, with expensive bottles purportedly held in storage as collateral, US authorities said this week.
Prosecutors filed an indictment in a New York federal court charging two British men, Stephen Burton, 57, and James Wellesley, 55, with wire fraud conspiracy, wire fraud and money laundering conspiracy in connection to the scheme – which was allegedly perpetrated through their company, Bordeaux Cellars.
Running from ‘at least’ June 2017 to February 2019, it’s alleged the scheme caused people to invest a total of more than $99m in ‘sham loans’, according to the indictment statement.
‘As alleged, these defendants duped investors by offering them an intoxicating investment opportunity collateralised by valuable bottles of fine wine that turned out to be too good to be true,’ said Breon Peace, US Attorney for the Eastern District of New York.
Federal prosecutors highlighted that charges remain allegations only, and the defendants are presumed innocent unless and until proven guilty.
If found guilty, the defendants face up to 20 years in prison.
Michael J. Driscoll, assistant director-in-charge at the FBI’s New York field office, said the indictment serves as a reminder that ‘[alleged] illegal investment fraud schemes won’t be overlooked.’
According to the indictment announcement, dated 1 March, Wellesley was arrested on 4 February in the UK, but Burton ‘is a fugitive’. It added that their company, Bordeaux Cellars, is the trading name for two private limited companies, ‘Bordeaux Cellars, Limited’ and ‘Bordeaux Cellars London Ltd.’, registered in Hong Kong and London respectively.