Benedict Moruthoane sentenced to 7.5 years for fraud

On 5th January 2011 Benedict Moruthoane was sentenced to 7.5 years in prison for fraud in respect to two wine investment companies: International Wine Commodities Ltd and Templar Vintners Ltd. Neither company bought any wine – IWC took some £800,000 from investors and Templar Vintners £100,000. Hertfordshire police raided and closed the offices of IWC in October 2008. They closed Templar Vintners down in January 2010 soon after it started operation.  

Just before Christmas, following a trial at Saint Albans Crown Court lasting two months, the jury found Moruthoane guilty just before Christmas. The case followed an investigation by the Economic Unit of the Hertfordshire Police.

 

In January 2010 Guernsey Financial Services Commission issued a public warning against Templar Vintners Ltd for falsely claiming on its website that it was authorised by the Commission. 

James Allie, a Brent councillor and the Liberal Democrat's parliamentary candidate for North Brent at the last General Election, was company secretary for Templar Vintners Ltd. Allie's name was used to give a patina of respectability to the fledgling company 

A concerned client of Templar Vintners, who had paid for two cases – 2008 Ausone  and 2008 Lafite – received an email purporting to come from Allie but it is likley that it was sent by Moruthoane. It is thought that Allie had no active involvement in Templar Vintners and no charges were brought.

Clearly it was, at the least, careless and foolish of Allie to have  unwittingly allowed his good standing and reputation to help persuade potential customers to invest in a fraudulent scheme.    

Fraud trial@St Albans: jury is still out

The jury is still considering its verdicts in this case. They retired on Monday 13th and have now been allowed by Judge John Plumstead to return majority verdicts.  

Fraud trial@St Albans: jury retires

I understand that the jury retired around 10.30am yesterday morning to consider their verdicts.

No news so far (17.30 14th December) and Crown Court closes at 4pm, so I assume that the jury will continue their deliberations tomorrow.

Wednesay 15th (20.00): No news so I assume the jury is still out and will continue their deliberations tomorrow.

Fraud trial@St Albans: closing speeches

Following the disruption last week to transport caused first by the tube strike and then the snow I wasn't able to get up to St Albans to catch up with the case until this morning.

All the evidence has now been given and closing speeches have started. I heard part of Anne Evans, concluding remarks for the prosecution this morning. She was due to continue this afternoon with the first of the defence speeches starting later today. With the court tomorrow only sitting in the morning, closing speeches won't be finished until sometime on Thursday and then His Honour Judge John Plumstead will be summing up and issuing his directions to the jury, which is now down to 11 members. It looks like the jury will retire to consider its verdict from Friday or Monday. Then it will depend upon how long they need to make their decisions, which may be sometime as there are six defendants. Also there are a number of charges for them to consider, so it may be Tuesday or Wednesday of next week at least before the jury decides on its verdicts.  

(I hope to add some detail from Anne Evans' concluding speech as well as from Paul Craven's evidence earlier in the trial.)

Fraud trial@St Albans: tube strike and weather KOs visit

Apologies to anyone awaiting news on the trial's progress. It was my intention to go to court this morning as the trial was due to resume at 10.30. Unfortunately the 9.45 from London Bridge to St Albans was cancelled and the 10.00 wasn't expected to arrive until 10.27, so I wouldn't have got to court until around 11.30. Unfortunately I doubt if I now have time to get up there until next Tuesday,  

Fraud trial@St Albans: the jury have a week off

The jury has this week off because Oseghale Hayble, one of the defendants, has gone to the Whittington Hospital in north London as his sickle cell anaemia has apparently returned. The trial is due to resume on Monday 29th November.

I understand that Craven and Cashman have completed their eveidence and that Hayble's barrister has indicated that his client will not be giving evidence. Moruthoane and Linskill have yet to give their evidence. Once they have done so, it will be time for the closing speeches from the prosecution and the five defendants' barristers before Judge Plumstead sums up and issues directions to the jury. My guess is that the trial is now unlikely to finish before the week beginning 6th December.   

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.


 



       

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. 

Templar Vintners and Boss Vintners:

Templar Vintners: two arrests made;

Brent Liberal Democrat councillor Templar’s company secretary

On Thursday 4th February Hertfordshire police arrested Benedict Moruthoane and Andrew Griffiths at the London offices of Templar Vintners Ltd. On Saturday 6th February they were charged at Hatfield Magistrates Court with conspiracy to defraud and money laundering and were remanded in custody. 

Although Templar Vintners Ltd did not start trading until the second half of 2009, its website claims that it is ‘the leading merchants of fine and rare wines’. On 22nd January 2010 the Guernsey Financial Services Commission (GFSC) issued a warning against Templar Vintners over a false claim that it was authorised by GFSC to run a wine fund. (See also here and here.)

Griffiths is the sole director of Templar Vintners Ltd and was appointed on 30th June 2009. James Allie was appointed company secretary on the same day. Allie is the Liberal Democrat councillor for the Alperton ward in Brent.  Allie does not list his appointment as company secretary of Templar Vintners Ltd on the Brent Council register of members’ financial interests.   

I tried to contact Allie for comment but received no direct reply, although Brent Council’s Liberal Democrat office manager did pass on the following response from Allie: “I haven’t been contacted by the police about this matter.” 

I was also in touch with the Brent Council press office, who subsequently contacted Allie. In his response Allie said that he had become company secretary of Templar Vintners Ltd because he was godfather to Moruthoane’s children and had taken on the work without payment. (Work done by councillors without payment does not need to be registered.) Allie said that the company had not started trading when it was raided by the police. 

Allie would appear to be misinformed here. Contacts through investdrinks.org indicate that Templar Vintners started trading in the second half of 2009 – most likely in September or October. It is also clear from Andrew Griffiths comments posted here on 25th January 2010 that Templar Vintners had been trading in 2009.

Boss Vintners’ bogus awards 

Moruthoane is a director of Boss Vintners, based in Johannesburg and founded in 2004. Initially called Voodoo Diamonds, the company name was changed 31st August 2005 with Moruthoane appointed director on 22nd July 2005. Boss Vintners claims to ‘the world’s leading fine wine merchants’. 

On its website Boss Vintners (Company Profile section) claims to have won awards from Decanter magazine, The International  Wine Challenge (Wine magazine) and from the Which? Wine Guide. From Decanter Boss claimed to have won the Bordeaux Specialist UK Wine Merchant of the Year" (Decanter Magazine) 2004/2005 and Fine Wine Specialist UK Wine Merchant of the Year" (Decanter Magazine) 2004/2005. These claims are entirely bogus. Decanter had no retailer awards in 2004 or 2005. The DWWA retailer awards started in 2007 and Boss Vintners has never won any Decanter retailer awards. 

Nor are the International Wine Challenge award claims true as Chris Ashton, event director of the International Wine Challenge says:  “Bordeaux merchant in 2004 was Farr Vintners and the Fine and Rare Merchant didn't exist in 2003! They are not the correct logos any way, they don't have dates on them so they are completely fraudulent as well!!”

Equally the claim to have won the 'Fine Wine Specialist Award" (The Which? Wine Guide) 2004' is also bogus: there was no The Which? Wine Guide 2004 published.  

In June 2009 Moruthoane was charged with conspiracy to defraud and money laundering in relation to International Wine Commodities Ltd, where he was a director. The case is due to be heard at St Albans Crown Court with the trial starting on 7th June. Moruthoane has pleaded not guilty.

  

Templar Vintners Ltd: warning by Guernsey authorities

This afternoon the Guernsey Financial Services Commission has issued the following warning about Templar Vintners Ltd:

'Warning – Templar Vintners Ltd

22 January 2010
It has been brought to the Commission’s attention that the above-named entity is operating a web site with an address of www.templarvintners.com. The web site includes downloads of articles purporting to have appeared in well known publications. One such article includes an advertisement for The Templar Vintners Fine Wine Fund in which it claims to be authorised by the Commission as a Class B Collective Investment Scheme under the Protection of Investors (Bailiwick of Guernsey) Law, 1987.

The purpose of this notice is to warn potential investors that the company is not licensed, authorised or in any way regulated by the Commission for the conduct of any financial services business in or from within the Bailiwick of Guernsey.

Investors are urged to always check the regulatory status of a company before entering into any contract.

If you require further guidance please contact the Commission’s Intelligence Team on (+44 1481 712706).'

••

Having brought Templar Vintners Ltd's 'doctoring' activities to GFSC's attention only yesterday, I am delighted by the Commission's prompt action. The warning can be viewed on the GFSC site here.

In the light of the Guernsey warning it is interesting to turn to the UK 2006 Fraud Act, in particular the section on false representation:

2 Fraud by false representation

(1) A person is in breach of this section if he—
(a) dishonestly makes a false representation, and
(b) intends, by making the representation—
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.

(2) A representation is false if —
(a) it is untrue or misleading, and
(b) the person making it knows that it is, or might be, untrue or misleading.

(3) “Representation” means any representation as to fact or law, including a representation as to the state of mind of—

(a) the person making the representation, or
(b) any other person.

(4) A representation may be express or implied.

(5) For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).

See earlier posting about Templar Vintners Ltd here, including comment from Andrew Griffiths, a director of Templar Vintners Ltd.

Templar Vintners Ltd

I had an enquiry yesterday about Templar Vintners Ltd from AB.

The enquiry
I wonder if you have any information about Templar Vintners?

They contacted me in November about buying Bordeaux Wines. I have a portfolio of wine that is held under an umbrella by the Bordeaux Wine Company. I am at a stage where I wish to offload some of my wine and was looking for a competitive price. Templar contacted me around that time - not sure how, in retrospect. Web site up and running, other references online but no figures at Companies House - I haven’t visited their premises yet.

I have already bought a case of Ausone 2008 for £7,700 - and have a Certificate from them but realise this is no guarantee that the wine exists.

My response
The registered office of Templar Vintners Ltd is at Hamilton House, 1 Temple Avenue, London EC4Y 0HA.

Their website (http://www.templarvintners.com/) claims that:
'Templar Vintners is one of the leading fine and rare wine merchants. We hold some of the greatest and rarest vintage wines; many of the wines we hold are increasingly unavailable elsewhere. We also frequently offer more recent vintages, at very competitive prices, which gives customers excellent opportunities for capital growth. Our clients benefit directly from our immense buying power, amassed through years of experience, and strong allegiances with a wide-variety of industry experts. Over 70 per cent of Templar Vintners’ customers are high net-worth individuals and seasoned investors. The remaining 30 per cent are a collection of British and international merchants , wine brokers and institutional investors.'

If this claim 'to be one the leading fine and rare wine merchants' is correct then this is a truly remarkable and probably unprecedented achievement. The company was incorporated on 8th August 2008 when it was called 888 Finance Ltd. On 30th June 2009 the registered office was changed from www.buy-this-company-name.com, Suite B, 29 Harley Street, London W1G 9QR to the current address at Hamilton House. On the same day Andrew Griffiths was appointed as director and James Allie as company secretary and on 3rd July 2009 the company name was changed from 888 Finance Ltd to Templar Vintners Ltd. The company's first accounts are due to be filed on 8th May 2010. Thus Templar Vintners Ltd did not start trading until early July last year.

Because of the nature of en primeur (see here) it is impossible at this stage to verify whether Templar Vintners has indeed placed on order for and paid for your case of 2008 Ausone. To be certain you would need to see their order and payment records and ideally details of the transactions all the way down the chain to the négociants in Bordeaux. I suspect that most companies would decline to release these records on the grounds of commercial confidentiality. You will not be sure whether the case of 2008 Ausone for which you have paid exists and is yours until it arrives in this country either at the end of this year or in the early part of 2011.

This is why it is always crucial to carry out as much due diligence on a company before buying en primeur from them and to buy only from established companies who have a solid track record.

The company's website is registered with Philip Lane Ltd, 2nd Floor 145-157 St John St, London EC1V 4PY.

It is interesting to download the selection of articles on wine investment from the Templar site and do a compare and contrast.

First up is an article from the Independent on Sunday (22nd June 2008) by Kate Hughes and Julian Knight. Here is the second paragraph (page 2) from the Templar's version:

For a private investor, there are three main avenues into the wine world. A specialist fund pools investors' money to buy wine to trade, but that doesn't mean you will get to drink your returns, just as investing a stake in a racehorse won't get you into the saddle. Wine Asset Managers (Templar Vintners), for example, offers the Fine Wine Fund, requiring a minimum 15 per cent of the fund's annual performance growth.

This is original version of the article as it appeared in The Independent on Sunday:

'For a private investor, there are three main avenues into the wine world. A specialist fund pools investors' money to buy wine to trade, but that doesn't mean you will get to drink your returns, just as investing a stake in a racehorse won't get you into the saddle. Wine Asset Managers (wamllp.com), for example, offers the Fine Wine Fund, requiring a minimum investment of £50,000. The annual management fee is 2 per cent, plus a further 15 per cent of the fund's annual performance growth.'

Wine Asset Managers (WAM) was founded in December 2005 by William Beck and Miles Davis. It is authorised by the Financial Services Authority (FSA) – 448941 - Wine Asset Managers LLP, authorised 25.5.2006 They run two wine funds The Fine Wine Fund and The Fine Wine Investment Fund. Wine expert Steven Spurrier is the advisor to the fund.

Templar Vintners Ltd are not authorised by the FSA. Any company in the UK running a wine fund as opposed to offering cases of wine for investment is very likely to be judged to be running a collective investment scheme as will need to be authorised by a financial services authority. In most cases in the UK this will be the FSA.

When I contacted Miles Davis about Templar Vintners he was very surprised. "I have never heard of Templar Vintners," he said. His business partner, Will Beck, was equally surprised. 'We have never heard of Templar Vintners and it certainly appears that something underhand is going on. In the first article they have clearly tried to associate themselves with us, but it looks very amateurish. They appear to have a makeshift website.'

'The second article is the one we wrote in the FT (with my name next to it) for the wine investment supplement in June 2008, and the ad at the bottom was placed by Vinum Fine Wine Fund (we have a hard copy here in our office). They have clearly replaced Vinum’s name with their own.'

As William Beck points out, this is exactly what Templar Vintners Ltd appear to have done as shown here:

The original ad in the FT (20th May 2008)

The amended/or doctored ad from Templar Vintners Ltd

The full page from Templar Vintners showing the ad in the bottom, left hand corner

Templar Vintners Ltd appear to just have changed the name and the logo leaving in the details about the authorisation by the GFSC (Guernsey Financial Services Commission: 'Class B Collective Investment Scheme under the Protection of Investors (Baillwick of Guernsey) Law 1987, authorised by the GFSC'.

The Vinum Wine Fund is authorised by the GFSC as their records show: 'Vinum Wine Fund 1033646 Vinum Fine Wine Fund PCC Limited, The Class B'. There is no mention of Templar Vintners Ltd in the GFSC records. The claim by Templar Vintners of GFSC authoristion is thus entirely false – I imagine the Guernsey authorities will not be amused. I have forwarded details to the GFSC.

AB agreed with Templar Vintners to swop his 2003s for 2008s and asked Templar to contact the Bordeaux Wine Company. They declined, so AB talked to the Bordeaux Wine Company direct. They told him that they thought they were a re-incarnation of the Bordeaux Wine Trading Company/International Wine Commodities. I have no evidence to support this claim, although BWC may be in a position to know as some of the people involved in running Bordeaux Wine Trading Company/International Wine Commodities previously worked for BWC. Any connection with these two companies has been denied by Andrew Griffiths: 'We have no knowledge of Bordeaux Wine Trading Company/International Wine Commodities, nor have we had or do we have any association or dealings with them.'

My advice
I would not do business with Templar Vintners Ltd under any circumstances.

I have invited Andrew Griffiths, director of Templar Vintners Ltd, to respond to this post. 25.1.2010: Andrew Griffiths has responded – see his comments below.