UK man arraigned in Brooklyn court on fine wine Ponzi scheme: feds

Metro

By Matthew Sedacca

A British man accused of bilking investors out of nearly $100 million in what amounted to a fine wine Ponzi scheme was arraigned in Brooklyn federal court Saturday morning on fraud charges, officials said. 

Stephen Burton, who was extradited from Morocco this week, operated a company called Bordeaux Cellars alongside fellow Brit James Wellesley, which the pair said brokered loans for rich wine collectors that were collateralized by luxe vino the firm stored, according to court documents. 

From at least June 2017 to February 2019,  Burton, 58, and fellow Brit James Wellesley preyed on individuals at investor conferences in the United States and Mexico, among other places.

The pair convinced the investors to fork over at least $99 million, with the promise they would receive regular interest payments from the borrowers, and that the firm would hold onto the wine bottles to back the outstanding loans. 

The supposed high-net-worth wine collectors getting the loans, however, were ultimately fiction.

And while the company touted having in its custody pricey wine from Domaine de la Romanee-Conti in Burgundy and Chateau Lafleur in Bordeaux, officials said they lied, and held thousands fewer wine bottles than the company claimed, according to court docs.

The boozy swindlers, who used various aliases, ultimately used the loan proceeds to make fraudulent interest payments to investors and splurge on their own personal expenses, according to the court papers. 

“With the successful extradition of Burton to the Eastern District of New York, he will now taste justice for the fine wines scheme alleged in the indictment,” said Breon Peace, US Attorney for the Eastern District of New York. “This prosecution sends a message to all perpetrators of global fraud that you can run from law enforcement, but not forever.”

Burton and Wellesley, 56, were each charged with wire fraud, wire fraud conspiracy, and money laundering conspiracy. If found guilty, they could each face up to 20 years in prison.

With Post wires.