Bordeaux Wine Trading Company: Paul Craven looted investors' money

There are a number of reasons why I'm delighted that Paul Craven, 'managing director' of the Bordeaux Wine Trading Company Ltd (BWTC) was found guilty of fraudulent trading on Monday at the second time of asking. 

The guilty verdict shows that you can't just take investors' money on the pretence that you are buying Bordeaux en primeur, and instead blow it on a succession of cars, expensive watches, almost continuous holidays, a flat and £100 a week cocaine habit.

During his evidence Craven said he was proud to be 'managing director' of a company that was doing well. In reality Craven was the looter in chief – very far from the 'managing director'. Ann Evans, the Crown Prosecutor was right when she told Craven – "You treated BWTC as your own private piggy bank". 

I'm delighted because it underlines that a jury often comes to the right decision in drinks investment trials. At the end of the first trial last autumn the jury couldn't decide whether Craven and Oseghale Hayble were guilty in relation to BWTC, so there had to be a retrial. As previously reported Hayble became ill during the trial, so Craven was left as the sole defendant. I suspect that at the first trial the jury, faced with a number of defendants and three different companies – BWTC, International Wine Commodities and Templar Vintners, they felt they couldn't safely convict Craven for his part in BWTC. 

Happily this time it was different. In the full glare Craven's threadbare defence was evident. It was not in dispute that the company had never bought any wine for its investor clients. Instead Craven claimed that it was Hayble, who had been responsible for buying the wine.  He maintained that he assumed that Hayble was buying wine. Craven, the sole signatory on the bank account for much of BWTC's fraudulent life, claimed he had taken Hayble's word as his bond as he passed over wads of cash in brown envelopes to Hayble. Laughably Craven explained that Hayble had told him that if he paid for the wine in cash they would get a 50%-60% discount of the First Growths they were selling to their clients. 

Craven claimed that he was still passing great wads of cash over to Hayble even after Hayble had left to set up the equally fraudulent International Wine Commodities Ltd. On one occasion £85,000 was "handed over" in the car park of the Maze Inn in North London. Curiously Craven never thought to ask for a receipt for any of this cash. Nor did he appear to think it curious that there were no receipts for wine bought, although the company did keep records of invoices and bills for office furniture, computers and the like. Furthermore Craven acknowledged that one of his few tasks at the company was to check the bills. No receipts for the £1.2 million taken from BWTC's clients to buy investment wines? "I trusted Hayble – took his word as his bond," said Craven.

Yet at the same time Craven claimed in the witness box that Hayble was spending a lot of time in night clubs – drinking heavily and snorting cocaine. No receipts for the cash handed over! Flying pigs territory! The simple answer was it was never Craven's intention to buy any wine. From his very short time as a salesman at the Bordeaux Wine Company Craven had learned that there is easy money to be made in flogging wine as an investment to naive punters. Even easier, if as was the case with BWTC, you simply trouser your clients' cash.             

It is clear from the unanimous guilty verdict that Craven gained no friends from his egotistical display in the witness box. Although he mouthed some platitude about having "a duty of care to BWTC investors to ensure that their wine was bought", Craven couldn't have cared less about the clients he had fleeced to provide him with coke, flashy cars, smart clothes, designer watches etc. The only person he felt sorry for was – Paul Craven – the last defendant and in prison on remand. "I've been left to carry the can!" he bleated.     

Testimony from the sales force painted Craven as a bully who could be charming when he wanted to be but was unpredictable. Craven insisted that his boiler room sales team pounded the phones incessantly – not as it turned out because of a work ethic but to pour more cash into his pockets. "It was sometimes difficult to even get a coffee," said one of the salesmen.

At the autumn trial Hayble along with Benedict Moruthoane were found guilty for their part in the International Wine Commodities fraud and, in addition, Moruthoane for the Templar Vintners fraud. On 5th January 2011 Moruthoane was sentenced to 7.5 years, which is a considerable sentence for fraud.

On Thursday it will be the turn of Paul Craven and Oseghale Hayble – I hope they, too, get substantial sentences.      

Finally I'm delighted that Hertfordshire police's economic crime unit carried out the investigation and obtained these convictions.   

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It was extraordinary to watch convicted fraudster, Frederick Achom, give evidence that he is a partner in the Bordeaux Wine Company Ltd, a wine investment company set up in 2002 by Achom and his fellow fraudster – Anthony Grant. Both men were banned in 2002 from being directors for 11 years until July 2013. Yet here they are running a wine investment company as shadow directors. Achom testified that up until 2006 was he was in charge of buying the wine, while from other testimony given during the trial it is clear that Anthony Grant is fully involved in the day to day running of the company, particularly in managing and training the sales staff.  

Why one might wonder bother to ban people from being directors if you are not going to enforce these bans?