It was an “intoxicating investment opportunity,” attorneys in the U.S. Attorney’s Office in Brooklyn said. The defendants, who were indicted in U.S. District Court in Brooklyn, N.Y., told investors that the defendants’ company, Bordeaux Cellars, brokered loans between investors and high-net-worth wine collectors that would be fully collateralized by high-value collections of wine.
The defendants promised that investors would receive regular interest payments from the borrowers, and that Bordeaux Cellars would keep custody of the wine pledged as collateral while the loans were outstanding.
The problem, the indictment claimed, was that these representations were false, the “high-net-worth wine collectors” did not actually exist and Bordeaux Cellars did not maintain custody of the wine purportedly securing the loans. Instead, the defendants used incoming loan proceeds to make fraudulent interest payments to investors and for their own personal expenses.
The defendants, Stephen Burton, 57, and James Wellesley, 55, are both UK citizens. They were charged with wire fraud conspiracy, wire fraud and money laundering conspiracy. Wellesley was arrested on February 4, 2022 in the United Kingdom and Burton remains at large.
“Unlike the fine wine they purported to possess, the defendants’ repeated lies to investors did not age well. As alleged, these defendants duped investors by offering them an intoxicating investment opportunity collateralized by valuable bottles of fine wine that turned out to be too good to be true,” stated United States Attorney Breon Peace. “This Office and our law enforcement partners will work to protect investors from deceptive schemes and ensure that loans that are financed with investor funds are not stolen by fraudsters.”
“Burton and Wellesley, as alleged, lied to their victims to get them to invest in what ended up being a nearly $100 million scheme. Today’s indictment brings their criminal activity to light and reminds other like-minded criminals that illegal investment fraud schemes won’t be overlooked,” stated FBI Assistant Director-in-Charge Driscoll.
Burton is a fugitive. Anyone with information related to his whereabouts is asked to contact the FBI by calling 1-800-CALL-FBI or by visiting tips.fbi.gov