British man, 58, accused over '£78million fake wine scam' is extradited to the US and appears in court
James Wellesley, 58, pleaded not guilty during his arraignment on Friday in Brooklyn federal court following his extradition from the United Kingdom, where he was arrested in 2022.
He faces claims he defrauded investors in a Ponzi-style scheme that conning them into lending money to non-existent high-net-worth wine collectors.
Wellesley was ordered to be detained pending trial on wire fraud and money laundering charges.
His co-defendant, Stephen Burton, was extradited from Morocco in 2023 after using a bogus Zimbabwean passport to enter that country.
Burton, a 60-year-old British national, has also been detained and pleaded not guilty to similar charges in the same Brooklyn court.
Federal prosecutors say that Burton and Wellesley ran Bordeaux Cellars, a company which they said brokered loans between investors and high-net-worth wine collectors.
The pair allegedly solicited just over £78 million from investors in New York and other areas from June 2017 to February 2019, approaching them at places including conferences in the United States and overseas.
The men told lenders that the loans would be backed by wine they stored for wealthy collectors and promised profits through interest payments, prosecutors alleged.
However, these collectors 'did not actually exist and Bordeaux Cellars did not maintain custody of the wine purportedly securing the loans,' the U.S. Attorney's Office for the Eastern District of New York argue.
Instead, officials said, Burton and Wellesley used loan money provided by investors for themselves and to make fraudulent interest payments to other investors.
Christopher Raia, assistant director in charge of the FBI New York office, said: 'James Wellesley and his business partner allegedly concocted an elaborate scheme defrauding investors out of millions of dollars to finance their own personal expenses.
'Their alleged deceit spread across years and continents.
'Today's arraignment signals to all criminals that the FBI will practice the same resolve in bringing perpetrators to justice.'
New York Special Agent, Ricky Patel added: 'James Wellesley and his co-conspirator are accused of masterminding their nearly $100 million international fraud scheme that exploited the unsuspecting public, including New Yorkers, for their own selfish enrichment.
'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.
'Let it be known, regardless of the nature of the transnational criminal scheme, HSI New York, alongside our law enforcement partners, will continue to adapt and evolve to fight global and domestic financial crimes wherever and whenever possible.'
The two men have been charged with wire fraud conspiracy, wire fraud and money laundering conspiracy.
If convicted, the two face up to 20 years in prison each.
United States Attorney, Joseph Nocella said: '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.'
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