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.