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A man from the United Kingdom was arraigned Friday in Brooklyn federal court after being charged with running a $99 million money laundering scheme through a faux wine company.
James Wellesley, 56, was arraigned after his extradition from the U.K., where he and co-defendant Stephen Burton, 58, were arrested in 2022.
The two are charged with wire fraud conspiracy, wire fraud and money laundering conspiracy in an alleged scheme perpetrated through Bordeaux Cellars, a company Wellesley and Burton operated.
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The indictment alleges that from at least June 2017 through February 2019, Wellesley and Burton posed as executives at Bordeaux Cellars, soliciting investors in New York and at investor conferences in the U.S. and overseas.
Wellesley and Burton told investors Bordeaux Cellars brokered loans between investors and wealthy wine collectors that would be fully collateralized by high-value collections of wine, according to court documents.
They also allegedly 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.
Prosecutors claim the “high-net-worth wine collectors” did not exist, and Bordeaux Cellars did not have the wine that was supposedly securing the loans.
Instead, Wellesley and Burton used the money they made from incoming loans to make fraudulent interest payments to investors and for their own personal expenses, resulting in $99 million in misdirected funds, according to court documents.
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“Today’s arraignment sends a message to all perpetrators of global fraud schemes that my office will work tirelessly to ensure they answer for crimes committed in the United States,” United States Attorney Joseph Nocella wrote in a statement. “We will not rest in our efforts to seek justice for victims of fraud.”
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Ricky Patel, HSI New York special agent in charge, accused the duo of stealing hundreds of thousands of dollars from collectors.
“James Wellesley and his coconspirator are accused of masterminding their nearly $100 million international fraud scheme that exploited the unsuspecting public, including New Yorkers, for their own selfish enrichment,” Patel said.
“As alleged, the defendants claimed Bordeaux Cellars boasted a high-value wine stockpile and a clientele of ‘high-net-worth wine collectors’ and, in turn, profited handsomely, all while they swindled investors out of hundreds of thousands of dollars, if not more.”
Burton was extradited from Morocco in 2023 and is awaiting trial. Wellesley was ordered detained pending trial.
If convicted, the pair face up to 20 years in prison.
