Stephen Burton, a British national, was arraigned in Brooklyn federal court on charges of fraud related to an alleged wine Ponzi scheme. Burton, extradited from Morocco, is accused of defrauding investors out of nearly $100 million. He operated Bordeaux Cellars with James Wellesley, another British national, as per court documents.
The company claimed to broker loans for affluent wine collectors, using luxury wines as collateral. From June 2017 to February 2019, Burton, 58, and Wellesley, 56, reportedly engaged with potential investors at conferences in the United States and Mexico. They are accused of convincing investors to contribute at least $99 million, promising regular interest payments backed by the wine collection.
However, the high-net-worth collectors purportedly receiving loans were non-existent. Despite claims of possessing expensive wines from renowned vineyards like Domaine de la Romanee-Conti and Chateau Lafleur, court documents indicate the company held significantly fewer bottles than stated.
The funds obtained from investors were allegedly used for fraudulent interest payments and personal expenses. Following Burton’s extradition to the Eastern District of New York, he faces charges alongside Wellesley, including wire fraud, wire fraud conspiracy, and money laundering conspiracy. Both individuals could face up to 20 years in prison if convicted.