Vintage Hallmark plc: mixed success for the SFO

The long running series of trials into Vintage Hallmark/ Hallmark Partnership, the largest drinks UK drinks investment scam came to an end this week at Harrow Crown Court. There have been reporting restrictions on some of these cases.

The fraud involved initially persuading American and Canadian clients, mainly from the medical profession, to invest in a range of over-priced alcoholic drinks, including whisky, Cognac, Champagne and wine. The Hallmark Partnership started their sales drive in 1995 and was run by David Lamb, Richard Gunter and Robin Grove. In November 2000 it was 'acquired' by Vintage Hallmark plc. The clients of The Hallmark Partnership were persuaded to swop their investments for equity in Vintage Hallmark plc, who had imposing offices at 36 St James's Street, one of London's most exclusive streets. 

Equity in Vintage Hallmark plc turned out to be worthless when the company collapsed in January 2003 owing just under £80 million, which led to an investigation by the SFO (The Serious Fraud Office) 

The trials

Vintage Wines of St Albans (company linked to Vintage Hallmark/ Hallmark Partnership) 

The first trial involved Richard Gunter and three employees. All were found guilty in September 2008 and Richard Gunter was sentenced to four and half years for fraud. Those convicted included Haroon Khatab, who was later found guilty of another fraud involving Tahir Tandoori Frozen Foods Limited. Khatab was sentenced to two and a half years imprisonment for his part in Vintage Wines of St Albans and he received nine months for his part in the tandoori fraud.

Vintage Hallmark plc

On 1st June 2010 Richard Gunter pleaded guilty to this fraud and was sentenced to five years and is subject to a Serious Crime Prevention Order.

Robin Grove, a fellow director, was acquitted of one count of false accounting, while the jury were unable to come to an agreed decision on charges of conspiracy to defraud. The trial had started in June 2011 and finished at the end of July. The SFO and The Crown have decided against seeking a retrial. 

Disqualified as directors 

In December 2006 Richard Gunter and Robin Grove were banned from being UK directors for 15 years for their part in this investment fraud. The disqualification will run until December 2021. Gunter is prohibited from carrying out investment business in the UK.

Their business partner, David Lamb, committed suicide on 1st November 2003.   

For further details see here.

     

Bordeaux Wine Trading Company highlights dangers of buying en primeur

One very obvious lesson from the convictions in the Bordeaux Wine Trading Company Ltd and International Wine Commodities Ltd is how ideally suited en primeur is to fraud. It is indeed a gold plated vehicle for fraud. Had Craven and Hayble been really clever rather than merely greedy, particularly Craven, they could well have covered their tracks and disappeared with a substantial portion of the £1.2 million looted from investors.

Curiously only this week I received a query from a potential investor (TG) who had been contacted by Worldwide Wine Investments Ltd (WWI), who are based at Luminous House, 300 South Row Milton Keynes, MK9 2FR. Although set up in March 2007 the company traded as Clearpoint Trading until 15th October 2010, when it changed its name to Worldwide Wine Investments Ltd. The registered office was also changed from 145-157 St John Street, London EC1V 4PY.

From the company's website it is clear that they have made rapid progress since October 2010 – 'we are a unique high-end wine investment brokerage specialising solely on the crême de la crême Bordeaux wines making you the best returns possible'.

TG explained that Worldwide Wine Investments had offered him: 'Lafite Rothschild 2010 @ £11,500 per case (9ltrs), Mouton Rothschild 2010 @ £7,400 per case (9ltrs). Prices include all taxes and import to the warehouse.

They take 5% of profit on resale.

Sounds very reasonable?'

My response to TG:

'If you look at wine-searcher you will see that Worldwide Wine Investments price for the 2010 Lafite-Rothschild (WS: £11675) is lower than any price shown. Similarly with the Mouton 2010 (WS: £7639).

Although it may look reasonable and a good deal, you might wonder how a newly set up company is able to offer lower prices than its competitors given that it is highly unlikely that it will have been able to buy direct from Bordeaux. Instead will have had to buy from its UK competitors.'

TG told me that the sales staff had told him that they had between 160 and 210 cases of 2010 Lafite. I assume this must have been said in jest as even a major player like Berry Bros & Rudd are thought have had only around some 200 cases of 2010 Lafite to offer to their customers this year en primeur. The amount of 2010 en primeur wine the First Growths have released this campaign is significantly less – probably the smallest ever.

The WWI claims 'Bordeaux Vintage Wine, The 100% Tax Free Tangible Asset'. Not sure that HMRC would agree!

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I have emailed Geraint Jones, a director of Worldwide Wine Investments Ltd, inviting him to comment.

Paul Craven and Andy Hayman: courtroom demeanour

Watching the performance of Andy Hayman before the Parliamentary Select Committee this week I'm irresistably reminded of Paul Craven giving evidence at his recent trial at St Albans Crown Court.

See here and here.