NEW YORK  — Two British executives were charged with cheating investors out of millions of dollars in a collateralized loan scam that falsely promised investments used for loans were backed by fine wines, authorities said Tuesday.

An indictment returned Monday in Brooklyn federal court charged Stephen Burton, 57, and James Wellesley, 55, with conspiracy and wire fraud.

According to a news release by federal authorities, Wellesley was arrested Feb. 4 in the United Kingdom, while Burton is a fugitive. It said both worked at two private companies, Bordeaux Cellars Limited and Bordeaux Cellars London Ltd., with Burton serving as chief executive and Wellesley as the chief financial officer.

Michael Driscoll, head of New York’s FBI office, said the men lied to investors to get them involved in the nearly $100 million swindle.

U.S. Attorney Breon Peace in Brooklyn said that the lies the men told investors “did not age well.”

“These defendants duped investors by offering them an intoxicating investment opportunity collateralized by valuable bottles of fine wine that turned out to be too good to be true,” Peace said.


According to the release, the men spent some money from investors, making fraudulent interest payments to them and using other proceeds for personal expenses.

An indictment alleged that the men defrauded investors from June 2017 to February 2019 by soliciting people at conferences sponsored by the companies in the United States and elsewhere to invest money in loans that would be backed by fine wines.

Actually, though, the wine businesses did not have many of the specific bottles of wine that they identified as collateral in the loan documents in their custody, the indictment said.

While some investors received interest payments for a time, all interest payments stopped in February 2019, and principal was not returned, either, the indictment said.

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