Stephen Burton and James Wellesley were accused of running a fraudulent wine lending business that defrauded over 100 investors globally. Their company, Bordeaux Cellars, raised approximately $99.4 million but lacked the wine it claimed to have as collateral. Both men initially pleaded not guilty, but Burton changed his plea to guilty and now faces serious penalties, including restitution and forfeiture. The federal indictment highlights substantial financial losses for investors, amounting to $25 million, due to the fraudulent activities of the business partners.
Burton pleaded guilty Thursday to wire fraud conspiracy and money laundering conspiracy, facing a maximum of 20 years in prison for both charges.
The indictment alleges the two men raised $99.4 million from over 140 investors, losing a collective $25 million while falsely claiming they had wine as collateral.
Representatives from the U.S. Attorney's Office stated that many of the specific bottles listed in loan documents were never in Bordeaux Cellars' custody.
Burton's plea included mandatory restitution and a forfeiture agreement, with the dollar amount undisclosed.
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