A British national pleaded guilty on Tuesday in Brooklyn federal court for his role in a fraud scheme that took nearly $100 million from victims who funded loans to fake wine collectors, Reuters said.
Prosecutors said James Wellesley and co-defendant Stephen Burton posed as executives of London- and Hong Kong-registered Bordeaux Cellars, raising $99.4 million by promising interest payments from “high-net-worth” collectors, the news outlet reported.
The pair claimed the loans were backed by an inventory of more than 25,000 fine-wine bottles, including Domaine de la Romanée-Conti and Château Lafleur, when in reality the company controlled as few as 217 bottles, and used investor funds for personal expenses and to pay earlier investors.
The scheme ran from June 2017 to February 2019 and collapsed when interest payments stopped, Reuters said. Under a plea agreement, Wellesley agreed to forfeit $1 million plus funds in more than two dozen bank accounts. Burton previously admitted to wire-fraud and money-laundering conspiracies and accepted a $26 million forfeiture order.
Both men remain jailed at Brooklyn’s Metropolitan Detention Center.
Read more at Reuters