Astor family name ‘used to dupe businessman in $416m loan scam'
That very reputation appears to have been used by an alleged fraudster to deprive a Mexican billionaire of more than $416 million in shares, according to extraordinary allegations made in courts in Britain and Monaco.
The case stems from when a business called Astor Asset Management 3 offered to lend Ricardo Salinas $113.8 million. The tycoon, who believed the company was 'owned by the wealthy Astor family', agreed to offer up $416.3 million in shares of his company Grupo Elektra as collateral.
Salinas's executives were told they would be discussing the deal with Thomas Mellon, who was described in
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The Independent
8 minutes ago
- The Independent
Young people! Here's what you need to know about ‘buy now, pay later' loans
Klarna and its pals have taken over the British High Street, with buy now pay later (BNPL) loans exploding in popularity. The market ballooned from £60m in 2017 to more than £13bn last year. One in five Britons used it to borrow money over the 12 months to May 2024. Regulatory oversight is long overdue and with legislation finally on the books, the Financial Conduct Authority has delivered its proposals. They are really quite mild. It is worth remembering that the government decided not to fully apply the Consumer Credit Act to these products even though, I repeat, they are loans. This has tied its hands to some extent. Under the plans, BNPL lenders will have to secure authorisation, check that people can afford to repay their loans, spell out the risks and charges for late payment, and offer more support to those who get into trouble. That could include forbearance (the sector will just love that one). Consumers will also be able to approach the Financial Ombudsman in the event of disputes. These loans are disproportionately popular among younger people (30 per cent of adults aged 25-34 used them at least once in the year to May '24), poorer people (nearly one in three adults with 'low resilience' took them out) and those living in the most deprived parts of Britain (29 per cent). I'm not about to deny that they can prove useful. Deferring the cost of purchasing a new school uniform for the kids for 30 days, or paying in three monthly installments, could be helpful to a low-income parent. But that's not how these things are typically used, and they are so easy to access it is very easy to get into trouble with them if they aren't used carefully. In my view, this is the crack cocaine of lending. The business model speaks to that. BNPL firms receive a commission on each transaction from the retailers they work with. Why are the latter willing to pony up? Because BNPL loans encourage consumers to spend more. Commissions aren't the only revenue stream available to firms in the sector, however. They also typically charge late fees and the FCA found what it called 'high arrears levels' in the sector with some firms generating 'significant revenue' from these charges. It further found that consumers weren't always aware that they could get hit for failing to pay on time. Critics of regulation argue that people shouldn't need handholding or nannying. The watchdog found that the most common use of BNPL in the 12 months to May 2024 was for lifestyle and beauty purchases (41 per cent), followed by 'treating myself or other people' (37% per cent). Surely it would be churlish to deny people the chance of a good time? I get the point. I do. But consumers should know what they're getting into and the sector hasn't always been good at explaining the risks. Indeed, the regulator criticised what it termed 'benefit framing' where firms emphasise the good bits and downplay the dangers. For the record, Klarna described the proposals as 'a win for the consumer' while rival Clearpay said it would 'support the FCA as it consults on and finalises its specific rules for the sector'. Make of that what you will. I still fear that BNPL's explosive growth, and some of the practices found by the regulator, means the potential is there for a serious scandal. Meanwhile we're likely to see snowballing numbers of cautionary tales, in which people find themselves plunging into financial hell. That being the case, it is regrettable that the wheels of regulation are still moving at the speed of a sloth with a stitch: After five years of consultation with the Treasury, oversight of the sector still won't finally come in until next July.
The Independent
8 minutes ago
- The Independent
UK sanctions Russian spies who ‘targeted Britain in sustained campaign'
Britain has hit more than a dozen Russian spies with a wave of sanctions, targeting those it accused of running a 'sustained campaign' of malicious activity against the UK. The Foreign Office named 18 officers from Russian spy agency the GRU, as well as hitting three of its units with measures aimed at cracking down on Vladimir Putin's increasing aggression abroad. It said the military intelligence officers targeted were 'responsible for spreading chaos and disorder on Putin's orders', and included those who had targeted the family of former Russian spy Sergei Skripal. The officers sanctioned had targeted a device belonging to Mr Skripal's daughter Yulia with malicious malware known as X-Agent five years before GRU attempted to murder them in Salisbury with the deadly Novichok nerve agent. The units are also accused of conducting a prolonged campaign of cyberattacks across Europe, including in Britain, aimed at destabilising the continent and undermining democratic institutions. 'GRU spies are running a campaign to destabilise Europe, undermine Ukraine 's sovereignty and threaten the safety of British citizens," Foreign Secretary David Lammy said. He added: 'The Kremlin should be in no doubt: we see what they are trying to do in the shadows and we won't tolerate it. That's why we're taking decisive action with sanctions against Russian spies.' On 15 March 2022, shortly after Russia invaded Ukraine, Unit 26165 carried out online reconnaissance on civilian bomb shelters in Mariupol, southern Ukraine and in Kharkiv, eastern Ukraine, the Foreign Ministry said. One of the targets was the Mariupol theatre. Civilians sheltering inside from Russian bombs had painted the word 'children' outside in the hopes they would be spared. But the next day, the theatre was hit by Russian airstrikes, killing about 600 people, including children, according to an Associated Press investigation. In 2013, officers from the same unit had targeted the daughter of former Russian spy Sergei Skripal with malware, designed to harm or infiltrate computer systems, the foreign ministry said. In 2018, Mr Skripal and his daughter Yulia were poisoned with the nerve agent Novichok in the English city of Salisbury, in an attack the British government said was organised by Russian intelligence. The sanctions also targeted the Africa Initiative, which the Foreign Ministry said employed Russian intelligence officers to carry out information operations in Africa, including undermining public health programs and destabilising various countries. Russia's campaign of sabotage and disruption across Europe ranges from cyberattacks and propaganda to arson and attempted assassination. Mr Lammy said: 'Putin's hybrid threats and aggression will never break our resolve. The UK and our allies' support for Ukraine and Europe's security is ironclad.' More than 70 different attacks have been attributed to Russia by Western officials since the invasion. The military intelligence units sanctioned Friday also targeted foreign aid to Kyiv, ports, infrastructure and border crossings as well as technology companies, the Foreign Ministry said. Although targeting GRU officers with sanctions is likely to have limited effect, the ministry said the goal is to raise awareness of Russia's campaign and raise the cost to people working for its services, including making it harder for them to travel.
Times
9 minutes ago
- Times
Fooled by the accent? How Brits ‘tricked Americans in $99m wine fraud'
The audience at the Las Vegas convention centre listened intently to the suited British businessman pitching a seemingly irresistible investment opportunity. The man was James Wellesley, the chief financial officer of Bordeaux Cellars, and he was there to tell them about an unexpected way to make money from the world of fine wines. 'We only lend against investment-grade wine,' Wellesley told his audience at the Sovereign Man conference. 'We're dealing mainly with French bottles, some of the nicer California ones.' The proposition was an enticing one back in 2017: high returns in an era of record low interest rates. The American investors gathered in the auditorium could not have known it then, but they would wind up victims of one of the biggest and most ambitious alleged frauds ever to envelop the world of wine. Wellesley, 58, of Tunbridge Wells, was extradited to New York last week to face charges of wire fraud and money laundering in connection with a $99 million Ponzi‑style scheme. His business partner, Stephen Burton, was arrested and extradited to the US in 2022. Both men have pleaded not guilty. 'The story behind Bordeaux Cellars is a pretty extensive and sordid one,' Don Cornwell, a Los Angeles attorney and 'wine detective' who spent years looking into the case, said. Inspired by a Sunday Times article Burton, of London, founded Bordeaux Cellars in 2010 as a company trading fine bottles. Wellesley, a childhood friend of Burton's, joined shortly after. With banks averse to lending money for such risky investment deals, Bordeaux Cellars found a niche acting as an intermediary between 'high net-worth' collectors who needed liquidity to buy rare wines and the investors who provided the money, receiving interest rates as high as 12 per cent in return. Burton, 60, claimed to be a Stanford University School of Business graduate who became a wine broker in his twenties. He told CNBC in 2013 that the idea for Bordeaux Cellars came to him while reading an article in The Sunday Times. 'There was a pawnbroker over here in London who had a warehouse full of Aston Martins and Ferraris,' he said. 'Literally, people were just driving into this warehouse, handing them the keys for a cash loan. So I just put two and two together, and I thought, you know, we could do this with wine.' Wellesley, meanwhile, was a disbarred lawyer turned property developer looking for a way to make quick money. The men told investors the loans would be backed by Bordeaux Cellars' vast wine inventory, which included bottles worth thousands of dollars from Domaine de la Romanée-Conti in Burgundy and Château Lafleur in Bordeaux. According to a criminal complaint filed over the case, they would receive regular interest payments from the collectors. Burton and Wellesley claimed Bordeaux Cellars had investors in Singapore, Hong Kong and Japan because those countries offered fairly low interest rates. Burton boasted that he had made more than 200 loans worth more than $30 million and had never experienced a default. Fooled by the accent? Burton and Wellesley drummed up business at investment conferences from Las Vegas to Cancún, Mexico. Wellesley would introduce himself using a number of different aliases, including Andrew Fuller, James Anderson and Andrew Templar. Wellesley explained Bordeaux Cellar's model at the 2017 Vegas conference: 'Lots of our customers now are property developers who are short of cash,' he said. One investor, a restaurateur who put in several thousand dollars, told The Times: 'I was totally convinced. Maybe it was the accent, maybe it was the confidence, but he had me.' The pair were becoming well-known in wine circles in New York, Hong Kong and London. Burton as the apparent aficionado, Wellesley the business brains. Burton's LinkedIn profile shows him posing next to an expensive Château Pétrus and claiming to have a private collection of more than 5,000 cases: 'Stephen was the guy who would show up with crazy bottles at dinners and try to impress people with his stories,' said Alex Turnbull, then at the London-based wine firm Justerini & Brooks and now head of private and online sales at Jeroboams. 'I once heard him say with great confidence that he had the largest collection of Penfolds Grange [an acclaimed Australian shiraz] in the world. I said to him, 'funnily enough, I know someone who claims the same, you guys should meet up'. 'He got very defensive and kept making excuses.' Turnbull also claimed Burton spoke with an Australian accent that he thought was affected. 'You get a sense very quickly when you share a great wine with someone whether they're legitimate or not,' he said. 'They would have disappeared off the face of the earth' Turnbull's only professional dealing with Bordeaux Cellars was in 2017, when one of his clients was looking to secure a loan against his $5 million collection. 'Bordeaux Cellars agreed to something like 25 per cent loan-to-value, so I think they were paying something high like a million, a million-and-a-half, in cash.' Turnbull said Wellesley was insisting the client relabel his collection with Bordeaux Cellar labels, which Turnbull called a 'red flag'. He said: 'That's a very important technicality because if a case of wine stored under bond gets relabelled with someone else's name on it then legally they become the owners of that property, which could become a real problem for the collector. 'James called up and he was very aggressive, issuing all sorts of threats and saying the [relabelling] had to happe. I'm convinced that if we had done it at that moment in time James Wellesley and Stephen Burton would have disappeared off the face of the earth along with all that wine.' Meanwhile, the restaurateur began to suspect something was amiss when Burton claimed that an American going through a divorce had put up two dozen cases of Screaming Eagle to get 'some quick cash'. The investor questioned why a person wealthy enough to own so much of Napa Valley's priciest cult cabernet sauvignon would agree to loan it at 16 per cent interest. For the first two years, investors saw regular quarterly interest payments. Then, as the years went on, the payments became fewer and further between. Arrested on Valentine's Day According to legal papers, it is alleged that another American investor handed over $200,000 as a loan for an investment against a collateral of rare wines contained in the Bordeaux Cellars' warehouse in London, but when he went to check, the wine was not there. 'According to one of the witnesses from the wine trade that I spoke with in the UK, in late 2018 Burton showed up at the storage facilities and used a credit card to pay the duty and VAT on the wines stored in bond there and then took every last bottle with him,' said Cornwell, the Californian wine detective who helped to expose the infamous forger Rudy Kurniawan. The story of Kurniawan's downfall — and Cornwell's role in it — was turned into the hit Netflix series Sour Grapes. • How the world's biggest wine fraudster could yet make his fortune The Bordeaux Cellars scheme collapsed in February 2019 when Burton and Wellesley stopped making interest payments to investors altogether. One victim attempted to call the London office on the number given on the Bordeaux Cellars business card, only to be told there was no such firm at that office. According to legal filings, the wines claimed as collateral for the loans did not, for the most part, exist. The money raised by the new investors had gone to pay interest to the previous ones, and to the two partners. Burton was arrested in a hotel in Kent on Valentine's Day, 2019, after a tip-off. In his room, the police found two fake passports, expensive collectors' watches, gold bars and South African and British currency with a total value of almost £1 million. Burton was charged in the UK with money laundering and possession of false documents and sentenced to four years in prison. He was released in the summer of 2020 and left the country, just as the FBI began investigating allegations of the fraud. 'Andrew Templar' lives a lavish life Burton and Wellesley were indicted in March 2022 by a grand jury in New York, accused of inducing investors to 'invest in excess of approximately $99.4 million in term loans purportedly brokered by Bordeaux Cellars'. The US authorities requested their extradition, alleging that 71 of the 141 victims were based in the US and that they had collectively lost nearly $25 million in the alleged Ponzi scheme. Burton was arrested again in Morocco in 2022, federal prosecutors say, when he tried to enter the country using a fake Zimbabwean passport, and was then extradited to the US on an FBI warrant. Wellesley faces up to 20 years in prison if convicted LEE SORRELL Wellesley, while working as a solicitor, had been found guilty by a disciplinary tribunal of embezzling funds from his clients' accounts during the period from 1989 to 1995 totalling £127,000 and was later disbarred. In 2013, Wellesley served jail time for fraud after borrowing £5.7 million for a property scheme involving 19 luxury apartments and failing to repay the loan after the bottom fell out of the market. Wellesley had kept about £3.5 million of the proceeds, using the money to fund a lavish lifestyle in southeast Asia, where he changed his name to Andrew Templar to avoid detection. He was eventually arrested when he returned to Britain in 2013 to visit his family. He served three years of a six-year sentence, before returning to work at Bordeaux Cellars after his release in 2016. Wellesley was arrested in 2022 and held at Wandsworth prison until his arraignment at the Brooklyn federal courthouse last Friday. 'These are all allegations, and we will defend them vigorously,' John Wallenstein, Burton's lawyer, said. Wellesley's lawyer could not be reached for comment. Trial dates have not yet been set, but both men face up to 20 years in prison if found guilty. Announcing the indictment, Breon Peace, US attorney for the eastern district of New York, said: 'Unlike the fine wine they purported to possess, the defendants' repeated lies to investors did not age well.'
