Fraud trial@St Albans: Templar Vintners Ltd

(Proceedings rather seem to have jumped ahead of themselves moving rapidly onto Templar Vintners, the third and most recently formed company involved in this trial. A question I think of juggling with witnesses' availability. Doubtless there will be a return to evidence involving the Bordeaux Wine Trading Company and International Wine Commodities.

The Judge – His Honour John Plumstead may have revealed that the judiciary have also been subject to government cuts when he referred to 'his creaky old laptop'.)

Dr Francis Leigh Moss

Dr Moss explained that he had been contacted on his mobile phone by a Daniel Price, a salesman for Templar Vintners Ltd. Initially he was surprised to be contacted on his mobile as he rarely gave the number out. On reflection Moss thought he might well have filled out a form expressing interest in buying wine for investment. He had already previously bought wine for investment from the Bordeaux Wine Company.

Moss said that Daniel Price was confident, well spoken and had an air of knowledge – he spoke the language (of wine investment). In October 2009 he agreed to buy a case of 2008 Ausone (St Emilion) en primeur for £7740. As well as his invoice Moss received a Templar Vintners brochure, which looked 'glossy', 'professional', 'establishment – at the upper end of the market and a 'multi-million pound' company stating that 'Templar Vintners is one of the leading fine and rare wine merchants'.

In December 2009 Moss bought a case of 2008 Lafite-Rothschild for £4200. After Christmas he decided to rationalise his wine investment portfolio: to sell the less well performing wines to free up funds to buy wines that would show a greater return.

Looking at his portfolio Moss concluded that it was "the highest and scarcest wines from the best vintages – 2000, 2003 etc. which had given the best performance. This was a good time to remove the less good wines from my portfolio, sell them and reinvest. I was open to offers and Templar Vintners raised the question of an exchange."

It was arranged that the wines Moss wanted to sell would be bought by Bordeaux Index Ltd "a highly reputable, secure company (Moss)" and the wines transferred from Branford bond to London City Bond. The deal was worth between £13,000 and £15,000. Templar Vintners would use the money raised to buy new wines for Moss.

Before he went ahead with this new deal Moss decided, given the amount of money involved, that  he needed to do more research. He checked with Companies House and discovered that Templar Vintners was incorporated in 2008 and had changed its name during 2009. There were two directors: Andrew Griffiths and James Allie. Moss could find out little about Griffiths but discovered that Allie was a Liberal Democrat councillor in Brent, so felt reassured.

Moss was also worried that the firm's address Hamilton House was 'an address of convenience'. That his contact with Templar Vintners was by mobile phone and that the brochure had used material from other companies – "cut and pasted". "Looking at the brochure I became more concerned – not a true and genuine document'. He told Templar Vintners that he was not prepared at this time to go through with the deal.

On a Friday evening in January around 5pm he spoke on the phone with an Ethan Brook who was "agitated, angry and affronted". Brook accused him of "neneging on the deal – a deal that he had requested". Moss asked for his money back on the previous deals but was told that this wasn't possible for legal reasons as under the Distance Selling Regulations there was a six week tiime period.

Moss asked for reassurance that this was a genuine deal and asked for a signed letter from Andrew Griffiths or James Allie. He asked in particular for reassurances from James Allie as he thought someone in James Allie's position would not be involved in something that was not legal and above board.

Moss never received a signed letter from either Griffiths or James Allie.  He did receive an email purporting to come from Allie but it wasn't signed. The transfer never went ahead nor has he received any money back for the two cases of 2008 that he ordered.

Under cross-examination from Mr Smith, representing Andrew Griffiths, Moss agreed that the brochure didn't mention 'multi-million pound company'. However he drew this inference from Templar's claim: 'our clients benefit directly from our immense buying power, amassed through years of experience'.

The trial continues.

3rd November 2010:
Please note that Andrew Griffiths has now been severed (official parlance) from this case with a new trial date to be set in due course.

Fraud trial@St Albans: 'There seemed to be a never ending supply'

Stephen Creaton 

In the second half of last Friday's morning session prosecution witness Stephen Creaton, a tele salesman, gave the first part of his evidence. Creaton described how he had been employed by a number of wine investment companies.

He started with the Bordeaux Wine Company where he worked from approximately April 2006 to October 2006. As he had no previous experience of the fine wine industry – "I'd never worked in wine before" – much of his time at BWC was spent being trained by Anthony. The software programme used was Goldmine, which is a way of keeping a record of calls to customers.

Mr Creaton said that at BWC there was a senior sales team, which consisted of two women, and a junior team which consisted of between 8-10 people. Oseghale Hayble, one of the defendants, was the manager of the junior sales team. Creaton's pay at BWC was £25,000 a year basic then a commission rate that ranged from 2%-4%.

In October 2006 Hayble invited Mr Creaton to join the Bordeaux Wine Trading Company, a new wine investment firm selling en primeur Bordeaux and based in Potters Bar. Creaton moved companies as BWTC was closer to his home and the money was better: £1000 a month retainer and 10% commission once you had earned £1000. It was a two room office operation with the offices separated by a long corridor and a number of other offices that were quite independent of BWTC. The larger room was the salesroom with 9-10 telesales staff. Paul Craven, one of the defendants, was usually in the small office along with a girl who handled the admin.

The sales staff cold called potential investors using a three-page script. Hayble gave  Mr Creaton his script. Although Mr Creaton got on well with Hayble the relationship with Craven was more difficult. "They were like chalk and cheese. Craven was rash and harsh – always looking for money. No pleasing him. If you weren't on the phones he wanted to know why."

Creaton became unhappy with the job. The whole set up started to ring alarm bells. This was crystalised when Craven said he was going to Bordeaux to pick up wine. "Although I didn't know all the ins and outs I knew you couldn't just go to Bordeaux to pick up wine as everything goes through the négociants. It wasn't quite right and I was concerned. I stopped selling and started to look for an exit."

Creaton was 'let go' in Spring 2007 and went to work for a family run wine investment business based in Edgeware. He worked in the back office sending out cheques covering for someone who was off on maternity leave. He stayed four to five months.

Creaton received a call from Hayble who told him that he was no longer with Craven and that he was setting up International Wine Commodities Ltd in Wheatstone, although they had a Mayfair postal address. Commission was 10% up to £25,000, 15% from £25,000-50,000 and 25% thereafter. Hayble's partner in IWC was Benedict Moruthoane, another defendant. Creaton said that Moruthoane was the "silent partner" in IWC.

At IWC there was a white board on which the wines they had to push were marked up and the sales team would cross off cases as they sold them. At BWTC there had been an unchanging list of the five First Growths. "The wines stayed the same," said Creaton, "although the price would change. There seemed to be a never ending supply. There was never a stop point."

Creaton explained that he didn't use his own name because business cards had aleady been printed with another person's name and that their elderly customers preferred to deal with someone with an Anglo-Saxon name.

Mr Creaton worked at IWC until the company was raided by Hertfordshire Police who closed down the company. Hayble claimed that this was "a bit of a mistake" and that the police had confused BWTC with IWC. 

Creaton was due to be cross-examined on Monday but I wasn't at the court.


 



       

2010 Bordeaux vintage: Gary Boom's urges caution

(Received this morning views of Gary Boom, founder and MD of Bordeaux  Index)

Bordeaux harvest update – wine industry prepares for a new episode of ‘twin peaks’

Press Release: October 18th 2010 – The spirits of wine lovers and investors have been buoyed by the news that the 2010 Bordeaux harvest is living up to its early promise, with the quality already being compared in some quarters with last year’s exceptional vintage.
 
With the harvest now complete, three of the region’s top chateaux have told fine wine merchant Bordeaux Index (www.bordeauxindex.com) they’re expecting this year’s vintage to be remarkable.

“It seems a little premature to mention Bordeaux 2010 when we’ve only just said farewell to the all-consuming jamboree that was Bordeaux 2009,” said Bordeaux Index founder and MD Gary Boom. “But initial reports are that the latest crop is destined to be good, very good indeed.”
 
Promising early reports from Bordeaux are often greeted with a degree of scepticism within the industry. However, the character and standing of the chateaux involved – Including Angelus, Latour and Le Pin – is adding credibility to the claims.
 
The final factor in the equation – the weather – has also played its part with warm temperatures in south western France characterising the final stages of the harvest.
 
“Remembering that 2009 was a truly wonderful vintage, I wouldn’t be that surprised if we have a serious case of vinous twin peaks on our hands,” said Gary Boom.
 
With the likelihood of another promising pedigree on offer, attention is now focusing on the inevitable question – what price will the 2010 vintage fetch?
 
Gary Boom is advising a note of caution, “It’s a complicated market at the moment. Normally the arrival of a great vintage is one of the most powerful tools for attracting interest but the reality is that we already have ample supply of ‘prime’ vintages, with plenty of the 00/05/09s sat awaiting consumption. In contrast, it’s the highly sought after ‘off-prime’ vintages of 99/01/04 that are looking increasingly stretched. “
 
The key factor behind this change in recent years has been increased demand from Asia as brand-based consumption has triumphed over all other factors.
 
“In short, this market wants the cheapest available vintage of a small set of favoured brands,’ observed Gary Boom. “As we’re on the cusp of another ‘great’ vintage, my advice to investors would be to focus on the 2007/08s with the right labels and be wary of the 2009/05s at the wrong price.”

Fraud trial@St Albans

Wine investors ‘defrauded of £2.5 million’

The trial of six people involved in three allegedly fraudulent wine investment companies started in St Albans Crown Court this week. The three companies were the Bordeaux Wine Trading Company, International Wine Commodities Ltd and Templar Vintners Ltd.  There are a number of charges. Niklas Cashman, Paul Craven, Oseghale Hayble and Benedict Moruthoane are charged with conspiracy to defraud. Benedict Moruthoane and Andrew Griffiths are charged with fraud and Anita Lanskill with transferring criminal property. Although the case is linked, it is believed that none of the defendants was involved in all three companies. All the defendants have pleaded not guilty to the charges. 

Investors were persuaded by cold calling telesales staff to invest in Bordeaux en primeur mainly 2005 First Growths. Although the victims paid a total of £2.5 million, it is alleged that the companies only ever bought one £10,350 case of wine. No other orders were placed. 

Instead the defendants spent the money on luxury goods, including flash cars and designer watches. The court heard today of a spending spree by 37-year old Paul Craven, who ran the Bordeaux Wine Trading Company. In October 2006 he bought BMW convertible for £20,600. In November he spent over £16,000 on various items in Selfridges including Ozwald Boateng clothes and Cartier watches. In January 2007 Craven bought an electric wine cooler (£1225) as well as a Jacuzzi bath and bathroom TV. 

In October 2007 Craven bought a black RR sport Land Rover for £55, 700. The next month he splashed out on a black BMW sports convertible for his girlfriend paying £32,162 on the spot by debit card.  The saleman described Craven as 'very cocky and loud – a Jack the lad'. 

Shortly afterwards the couple split up. Craven contacted the garage and inquired about selling the BMW back to them but he never came back into the garage to pursue the enquiry further.     

The court also heard part of the evidence of Stephen Creaton, a tele salesman who worked for both the Bordeaux Wine Trading Company Ltd and International Wine Commodities Ltd. He will be cross-examined on Monday.

The trial continues and is expected to last four to five weeks. 

Wine investment and inheritance tax: a further warning

News - Tax
Written by Ray Clancy
Wednesday, 13 October 2010 10:25
UK investors in wine are building up huge unexpected tax bills having been misled by salesmen over how HM Revenue and Customs treat wine, it is claimed.   HMRC recently produced guidance warning of increasingly widespread misunderstanding that the value of wine investments for inheritance tax (IHT) purposes is based on the purchase price of wine rather than its current market value. Read the rest here. ** Clearly anyone considering wine investment or who already has wine investments should get professional tax advice and not rely on what some high pressure telesales person tells them. Nor should they rely on claims about wine being a tax-free investment made on some companies' websites. Although many wines but not all are considered by HM Reveue and Customs to be wasting assets, the concept of wasting assets does not apply for inheritance tax. Inheritance tax values are based on current prices and not the price at which the wine was bought.

FT article on wine investment and inheritance tax

Interesting article in the FT (5th October 2010) on Revenue and Customs looking at inheritance tax on wine investments:

HM Revenue targets wine cellars
By Ellen Kelleher

Published: October 5 2010 14:48 | Last updated: October 5 2010 14:48

Executors of wills are facing the prospect of paying unexpected tax bills for failing to record the market value of the wine cellars in estates, accountants claim.

Read the rest here.