By Jonathan Stempel NEW YORK (Reuters) -A British man pleaded not guilty on Friday in New York to charges he helped mastermind a nearly $100 million fraud whose victims invested in loans meant for
British Man Denies Charges in $99 Million Wine Fraud Case in New York
By Jonathan Stempel
NEW YORK (Reuters) -A British man pleaded not guilty on Friday in New York to charges he helped mastermind a nearly $100 million fraud whose victims invested in loans meant for wealthy wine collectors -- except that neither the collectors nor their wine existed.
James Wellesley, 58, entered his plea to wire fraud, wire fraud conspiracy and money laundering conspiracy charges before U.S. Magistrate Judge Robert Levy in Brooklyn.
Wellesley, also known as Andrew Fuller, was ordered detained without bail at Brooklyn's Metropolitan Detention Center, after unsuccessfully fighting extradition from Britain.
A lawyer for Wellesley did not immediately respond to a request for comment.
Stephen Burton, 60, another Briton charged with running the fraud, is being held at the same Brooklyn jail. He was extradited from Morocco to face the same charges, and pleaded not guilty in December 2023.
Both defendants face up to 20 years in prison if convicted.
Prosecutors said that from June 2017 to February 2019, Wellesley and Burton convinced victims to invest $99.4 million of loans brokered by their company Bordeaux Cellars, with interest payments coming from the wine collectors.
The men allegedly told victims the loans were backed by an inventory of more than 25,000 bottles of wine, including from Domaine de la Romanee-Conti in Burgundy and Chateau Lafleur in Bordeaux.
But prosecutors said Bordeaux Cellars actually controlled thousands fewer bottles than the loan documents showed, including just 217 bottles in March 2018.
Prosecutors said the defendants used loan proceeds to pay interest to some investors, or for personal expenses.
The scheme collapsed when victims stopped receiving interest payments, prosecutors said.
The case is US v Burton et al, U.S. District Court, Eastern District of New York, No. 22-cr-00079.
(Reporting by Jonathan Stempel in New YorkEditing by Marguerita Choy)
