Massive investment scheme linked to fine wine
NEW YORK - Two British men have been indicted for a massive investment scheme, federal prosecutors in New York claim.
An indictment was filed Monday in Brooklyn federal court against Stephen Burton, 57, and James Wellesley, 55, for wire fraud and money laundering conspiracy.
Prosecutors say the scheme was perpetrated through their company, Bordeaux Cellars, the trade name for two private limited companies, Bordeaux Cellars, Limited and Bordeaux Cellars London Ltd.
Wellesley was arrested on February 4, 2022, in the United Kingdom and Burton remains at large and is considered a fugitive.
Prosecutors claim they duped investors by offering an investment opportunity collateralized by valuable bottles of fine wine. They say it ended up being a nearly $100 million scheme.
"Unlike the fine wine they purported to possess, the defendants’ repeated lies to investors did not age well," stated United States Attorney Peace.
The indictment alleges that from at least June 2017 and continuing through February 2019, they posed as executives of Bordeaux Cellars- and solicited investors, claiming the company brokered loans between investors and high-net-worth wine collectors that would be fully collateralized by high-value collections of wine.
They allegedly promised that investors would receive regular interest payments from the borrowers and that Bordeaux Cellars would keep custody of the wine while the loans were outstanding.
Prosecutors say the "high-net-worth wine collectors" did not actually exist, and Bordeaux Cellars did not have any wine purportedly securing the loans.
Instead, they are accused of using incoming loan proceeds to make fraudulent interest payments to investors and for their own personal expenses.
Wllesley was previously jailed after conning a bank out of millions to fund nights in luxury hotels and extravagant shopping trips.