British man charged with running $100m wine Ponzi scheme
A British man has been charged with running a Ponzi scheme which defrauded investors out of almost $100m over fine wines.
Stephen Burton, 58, was arraigned in federal court in Brooklyn on Saturday morning before US Magistrate Judge Taryn A Merkl.
He is charged with wire fraud conspiracy, wire fraud and money laundering conspiracy in connection with a scheme perpetrated through Bordeaux Cellars, a company that he operated.
Mr Burton was extradited on Friday to the Eastern District of New York from Morocco where he was arrested in 2022 after entering the country using a false Zimbabwean passport. His co-defendant, James Wellesley, 56, remains in extradition proceedings in the United Kingdom.
If convicted, both men face up to 20 years in prison.
United Kingdom Citizen Extradited to Face Charges in $99 Million Wine Fraud https://t.co/AxB09EKgvE (Announced with @NewYorkFBI)
— US Attorney EDNY (@EDNYnews) December 16, 2023
The indictment alleges that from at least June 2017 and continuing through February 2019, Mr Birton and Mr Wellesley solicited investors, including residents of the Eastern District of New York, at, among other places, investor conferences held in the United States and overseas.
The defendants claimed to investors that Bordeaux Cellars brokered loans between investors and high-net-worth wine collectors that would be fully collateralized by high-value collections of wine.
Bordeaux Cellars allegedly had custody of thousands fewer wines than loan documents reflected, including wine from Domaine de la Romanee-Conti in Burgundy and Chateau Lafleur in Bordeaux, court papers obtained by Reuters showed.
Prosecutors said Mr Burton and Mr Wellesley both used multiple aliases and used loan proceeds to make fraudulent interest payments to investors or for personal expenses in the scheme.
USA Peace: “With the successful extradition of Burton to the EDNY, he will now taste justice for the fine wines scheme alleged in the indictment. This prosecution sends a message to all perpetrators of global fraud that you can run from law enforcement, but not forever.”
— US Attorney EDNY (@EDNYnews) December 16, 2023
The defendants promised that investors would receive regular interest payments from the borrowers, and that Bordeaux Cellars would keep custody of the wine, securing the loans while the loans were outstanding.
“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,” stated United States Attorney Breon Peace.
“This prosecution sends a message to all perpetrators of global fraud that you can run from law enforcement, but not forever.”
Mr Peace thanked Moroccan authorities for their assistance with the arrest and extradition of Mr Burton.
