Warning – Lynch & Mullin, LLP – shares in Winex-Ex Inc.

 website record for Lynch & Mullin 

– creation date 18 July 2016

Very recently in a most useful message from KP, an investor in collapsed Vinance PLC, a scam wine investment company. An impressive piece of research by KP. Two investors with closed Bordeaux Fine Wines Ltd have also been contacted this month offering the exactly same share scam. 

'Dear Jim,

I wanted to warn the readers of your blog about a new scam going on:

Today I received a cold call from a chap called "Mark Schratton" from a "law firm" called Lynch & Mullin, LLP from Boston, Massachusetts.

The story made kind of sense: "You invested in Vinance PLC some time ago, it looks like those unscrupulous owners who are now all in prison* purchased shares in a company called Winex Inc. and put your name as a shareholder without you knowing as a means of routing/ stashing their investor money. As it turns out, you're in luck because you're now owner of 30,000 shares which our client is looking to buy".

I did invest in Vinance PLC, lost money on it and yes the management of that company is now in prison (or at least some of them). The chap had my contact details, my name, phone number and email. I checked the law firm's website - basic but otherwise well respectable.

Then "his colleague" sends me legal documentation advising me that I own 30,000 shares at $5 each and asks me to fill in my contact and bank details as soon as possible (best today). All looking very legit and professional.

I asked to see my share certificate - and they even produced that.

A few issues with the master plan:

1. Lynch & Mullin LLP does not exist - there's no mention of them in the Massachusetts commercial registry
2. Their website was only registered a month ago
3. There are no legal articles with this firm's name anywhere to be found (Google, Law360...)
4. They managed to produce a share certificate "from the registration authorities" (which they did not originally have) within 1 hour
5. Winex-Ex Inc does not exist - there's no mention of them in the Nevada commercial registry (Nevada as per my "share certificate")
6. In the legal documentation they mention some bogus government agency - the website mentioned in the document is empty (just registered). When asked about it "Mark" provided a different address which was registered only a week ago with apparently the intent for people to contact them to verify that Lynch & Mullin is an actual firm.
7. The servers of this "US govt agency" are hosted in France... hmmm

I must say that these scams are getting quite sophisticated and it's easy to fall for them. Beware.

Best regards,'

•••

How this advance fee scam works:

As KP says this is quite a sophisticated scam as it involved both setting up a website for a fictitious US law firm by cloning a legitimate American law firm's site and another site that purported to be a US Government securities agency.

Ex-clients of failed wine investment companies – Bordeaux Fine Wines Ltd and Vinance plc so far – are cold called by someone from American 'law firm' Lynch & Mullin,  and told that their wine company has purchased shares – see KP's story above. Staff names to date at Lynch & Mullin are Mark Schratton, James Fischer, Matthew Cohen and Andrew William Marks – probably all false names. 

Compare and contrast 

The scam Lynch & Mullin, LLP site in 'Boston'

 Carr, Morris & Graeff, PC – legitimate US law firm in Virginia and DC

site cloned by Lynch & Mullin  

More cloning ..... Lynch & Mullin above

 Carr, Morris & Graeff, P.C.

 Lynch & Mullin, LLP (scam)

Carr, Morris & Graeff, P.C. – cloned by Lynch & Mullin

Who is? Lynch & Mullin's website 

created 18th July 2016

The investor is told that these 30,000 shares in Winex-Ex Inc. are restricted and are advised to contact the International Securities and Investments Commission (ISIC). They are told that the ISIC is a US government Regulatory, who will make enquiries about removing the restriction. Investors are told that there will be a fee for removing the restriction. Lynch & Mullin send out a share certificate for 30,000 shares in Wine-Ex Inc along with transfer documents. Winex-Ex Inc does not exist, although Google does show a Winex Inc in New Jersey, which was established in 1994 and surely a legitimate company and nothing to do with these scammers.  

Certificate for 30,000 shares in Wine-Ex Inc  

$150,000 transfer of shares to Lynch & Mullin  

Investor GJ contacted the ISIC and dealt with a Mr. Mark Gibson, International Affairs, and based at 277 Park Avenue, New York NY 10172. Gibson advised that the fees to derestrict the shares are: 

Option 1 a fee of 25c per share with the restriction removed within 10/14 days. $7500 on 30,000 shares.

Option 2 a fee 30c per share with the restriction removed within 24/48 hours. $9000 on 30,000 shares.

     

Anyone, who sells their 30,000 shares to Lynch & Mullins, will never see their money instead they will have had their wallets thinned by either $7500 or $9000.

International Securities and Investments Commission (ISIC).

Despite its impressive name the International Securities and Investments Commission (ISIC) is a recently created scam. Its website was created on 9th August 2016. The registrant's name is given as Jonathan Richardson, EDF Grande 2, Piso 1, Barcelona, Spain  

The real bona fide US government agency is: 

U.S. Securities and Exchange Commission  https://www.sec.gov/

Please note that ISIC has no connection with the Australian Government's ASIC – Australian Securities & Investments Commission. 

Update: 18.8.2016 20.35
It appears that the Lynch & Mullin website has disappeared. As anon pointed out below their website appears to have been a clone of Carr, Morris & Graeff, PC, a legitimate law firm based in Washington DC, whose website was registered in April 1997. 

Sorry the website lynchandmullin.com 

cannot be found 

This is good news but it is very possible that the scammers will just set up another cloned website.  
    

••   

Update: 24th August 2016 

The cloned site is back up but as http://lynchandmullin.net replacing http://lynchandmullin.com peddling a similar scam using shares in Eco Care Global Inc. 

•••

* The four directors of Vinance Plc have all been disqualified from acting as UK directors. Simon Earl – 10 years and Simon Ford, Paul Ford, Mike Wallen – 9 years each. Details here. In February 2013 Simon Earl and Mike Wallen were jailed for their part in running a brothel and prostitution ring. Details here. 

 

Vinance directors – Earl, Ford and Wallen – now disqualified

Vinance plc: Fine Wine Portfolio Managers!

Message from Chris Herron of Herron Fisher Insolvency and Business Recovery

'All four directors of Vinance PLC have been the subject of disqualification proceedings taken by the Insolvency Service. Each director has now given a legally binding undertaking not to act as a director of any limited company for a long period of time.

Simon Earl – 10 years

Simon Ford, Paul Ford, Mike Wallen – 9 years each

 

If they breach their undertakings, they can be prosecuted. Simon Ford has resigned as a director of Electus Wines Ltd.' See previous investdrinks post here.

This ban means that Simon Earl, Simon Ford, Paul Ford and Mike Wallen cannot act as shadow directors surreptitiously running a company. 

Following Simon Ford's resignation (13.1.2015) as a director of Electus Wines Ltd, the company's future may well be uncertain. The sole director is Timothy Graham Ford, Simon's father who celebrates his 70th birthday today. Will he want to continue the business, which Simon Ford told me he would be running from Ottawa? The company is now registered at a private address in Blackheath.  

In February 2013 Simon Earl and Mike Wallen were jailed for their part in running a brothel and prostitution ring. Details here.  

My thanks to Chris Herron for keeping me informed. It would be good if all insolvency practitioners were this helpful!

Electus Wines Ltd – rises from the ashes of Vinance plc.... or does it?

It was nearly two weeks ago that a comment from an anonymous source alerted me to the existence of Simon Ford's Electus Wines Ltd:

'Jim, after the Vinance debacle am stupefied to see that Simon Ford has set up a new wine investment firm.'

Following Vinance plc's collapse into liquidation on 17th May 2013, Electus Wines Ltd was set up on 16th July 2013. It has two directors 37-year-old Simon John Ford, based in Ottawa, Canada and 69-year-old Timothy Graham Ford (Simon's father) based in London SE3. Electus Wines Ltd is registered c/o Lester Aldridge LLP, WSP House, 70 Chancery Lane, London WC2A 1AF. Timothy Ford is a consultant to Lester Aldridge LLP and is the Chairman - Reading University Pension Fund. See his Linkedin profile.

Electus Wines Ltd gives 33 St. James’s Square. London SW1Y 4JS as their UK contact address. This is a serviced/virtual office building. Electus' website was registered on 23.7.2013 at 33 St.James's Square.  

Simon Ford's Electus Wines Ltd does not lack ambition: '…a staging post for the finest wines from the world’s greatest terroirs, and a good friend to customers seeking exceptional value and quality wines that “wow”!' 

(I fancy a few of Vinance plc's creditors have thought "wow" what happened to my pension pot!)  

From the Electus Wines Ltd website

Simon goes on to boast:

'In 2002 Simon founded what became the UK’s largest specialist wine investment company...'  No mention that this company was Morgan Aston Ford that later became Vinance plc, which went bust in May 2013.  

An update (23.10.14) on Vinance plc from Chris Herron, Joint Liquidator at Herron Fisher.

 

'As regards general progress, Vinance PLC went from Administration to Liquidation on 17 May 2013.  This is normal where there is money to pay to creditors and the liquidation facilitates that distribution.  We have paid creditors 15p in the pound so far and expect to pay a second, smaller distribution in the new year.  The total creditor figure is approximately £15M.

 

Completely separately from this, we have returned perhaps £20M worth of wine to investors, having followed the audit trail and established that they owned it rather than the company. We remain puzzled as to why other insolvency practitioners appear not to have always taken this approach in other cases, where they have sometimes simply sold all the wine, even that owned by third parties, to put “in the pot.”'

The liquidators are required to report to The Insolvency Service on the conduct of directors of bankrupt companies. It would not be surprising if Herron Fisher's report on the directors of Vinance plc is not entirely complementary. The Insolvency Service can then decide to take action to disqualify someone from being a director. 

In February 2013 two of Vinance plc's directors – 59-year-old Simon Earl and 52-year-old Michael Wallen – were sent to prison for their part in running a brothel called Freddy's. Earl got two years and Wallen two years and five months. Details here and here.  

Yesterday I emailed Simon Ford some questions about Electus and am grateful for his rapid response:    

a) On the Electus website Lillian Kawasa is described as 'Director and Special Events Organiser'. However, she is not listed as a director at Companies House and appears to not to be a director of any UK company. Why then is she described as a 'director'.  

SF: Lillian Kawesa is a director of our Canadian company, as am I. 

b) There are two directors of Electus – yourself and and your father – Timothy Graham Ford. Why is your father not mentioned on your website? After all he has had a highly distinguished career both in law and outside – hospitals and Reading University.

SF: As you correctly say, my father Timothy Ford has enjoyed a long and distinguished career in the law and continues to enjoy one in public service; we couldn’t see the relevance of this to our wine buying audience.

c) 'In 2002 Simon founded what became the UK's largest largest specialist wine investment company...' Why no mention here of Vinance PLC, which went bust on 17th May 2013 with debts of around £15 million. To date your creditors have received 15p in the £ and can expect a smaller distribution early in 2015.

SF: 'Our principal business is that of a wine merchant to customers in Africa, North America, and Asia. Vinance’s business has no relevance to this.'

d) Will you be running Electus from Ottawa?

SF: 'I shall be running Electus from Ottawa.'

e) You and the other directors of Vinance were severely criticised by the Herron Fisher, the administrators (later liquidators), in their report of 17th December 2012 (investdrinks):

From the report: ‘We have asked the directors to prepare a summary of the company's estimated financial position as at 16 November 2012, which is known as a statement of affairs, but they have not yet prepared it. We understand that the reason for the delay is that there is too much uncertainty about the company's financial position and in particular the wine for which clients have paid.’

‘It was apparent that the company's records were inadequate and that the position of each individual client was not recorded properly.  The directors could not easily work out which clients were short of wine they had ordered and paid for or what the extent of the shortfall was.  The clients themselves were unaware that there was any problem, although many of them thought (and stated) that the company's systems left something to be desired.’

What measures have you put in place to ensure that Electus Wines Ltd is not Vinance plc Mark 2 please? 

SF: 'Electus and Vinance are two quite unrelated businesses. I will be putting my business experience at Electus’s service and we will will not be managing clients’ cellars.

You may be interested to note that we are only offering our cellar advisory service, where we help our customers source rare wines and spirits, because we have been invited to do so by individuals with first hand experience of Vinance who came to us, not by us seeking them. Indeed I haven’t approached anyone to buy wine from us, and nor do I intend to. Our customers have found us with no encouragement at all.'

Simon Ford explains that Electus' principal business will be with customers in Africa, North America, and Asia, so they allegedly would not be interested in the fate of Vinance plc. He may be right. However, if it is relevant that Simon Ford founded a wine investment company in 2002, then it is equally relevant that it went bust in 2013 to the tune of £15 million.

SF: 'my business experience at Electus’s service' – given Vinance's record keeping and the £15 million bust this may not be good news for customers of Electus....

SF: 'I shall be running Electus from Ottawa.'
There is nothing on the Electus Wines website (as of 7th November 2014) to indicate that the company is being run from Canada – no Canadian contact details or company number. Indeed it gives the impression that the company is run from London and is UK based:

'Three years in the making, Electus Wines was formed in London in 2013'. Electus Wines Ltd is a UK registered company and its contact details – telephone and address – both are for Central London. I asked Simon Ford whether there was a separate Canadian website but so far have received no reply.    

I understand that Simon Ford may soon be offering brass necks as an investment.... 

Update: 8th November 2014

A response received today from Simon Ford following me asking whether they have a Canadian website:

Dear Jim,

You're most welcome.

I have not completed the process of assembling the business in Canada for our Canadian company and am completing new site content including addresses etc and I'll let you know when it's finished if you like?

I’m very keen to bring a fresh approach with our cellar advisory service. It will be a new business model never before seen in the marketplace. As I said in my last email we're not managing customers' cellars, rather we intend to market our knowledge, experience and know-how regarding identifying value which we have learned over the last decade at work in the market and which has proven hugely successful as well with 5 year average price growth of 130%. As your recent posts on the Premier Cru / Cult Wine story show, even the longest established wine managers aren't immune to problems bound up in these managed business models and it may be the case that we're coming to the end of an era. We may be seeing the last days of these Aston Lovell type front and back end commission outfits, perhaps even of wine funds with their performance fees and management fees, and, who knows, maybe even of merchants and their margins as well? In the wake of Premier Cru's collapse there is certainly much to ponder for us all. We will certainly avoid repeating oft-made mistakes with our cellar advisory service approach and bring real evolution to the market. You will appreciate I am constrained by commercial confidentiality presently, but once we start accepting customers it would be great to think that you might be able to help us reach wine investors who look to you for guidance with news of our new business model because it will be of real interest to them. I think you'll be very interested in our novel approach too. I shall keep you informed of developments at any rate if you wish? There is much still ponder but when it is completed our new model will represent true evolution and real value for customers. For example, Simon Staples of Berry's has predicted major bidding wars for first growths in the coming decades - he's even gone on record stating Lafite 2005 may be changing hands at £10 million a case by 2058 - do you think this might happen? How do you see the market developing? And will investors be trading Chinese and Indian fine wines on Cavex in a few years do you think?  

I'm very much enjoying the move to the merchant side of the market; much more interesting and enjoyable. Please let me know if you can recommend some entry-level Loire wines for our African and Chinese customers. So far we've been focussing on the S.W. France of course, as pricing there is most suitable for our customers' purposes. We’re always looking for more great examples of French terrors and you obviously know a thing or two about the Loire region. Let me know if you’d like to help us?

All good wishes,

Cordialement,

Simon Ford
Director
Electus Wines Limited
33 St James's Square
London SW1Y 4JS
Tel +44 (0) 20 7129 1265
Mob +1 613 301 7776
Email simon.ford@electuswines.com
Web www.electuswines.com