Heartless, parasite Jonothan Piper to be jailed for wine investment fraud

Embassy Wine UK Ltd website:

'We have great passion for the product let us share 

the knowledge of wealth and guidance to building 

a portfolio of the most sort after wines. Enabling an attractive 

and healthy return on your investment.' 

 

On Tuesday 23^rd August 2016 30-year-old Jonothan Piper admitted at Snaresbrook Crown Court to defrauding his investor clients and HMRC (Her Majesty’s Revenue and Customs).

Piper, who posed as a wine broker, preyed on the elderly and vulnerable – cold calling and persuading them transfer their wine to his company Embassy Wine UK Ltd. Piper charged an advance fee for sales for ‘legal costs’. Once the wine was transferred Piper would become impossible to contact and the duped investor would never receive their promised money.

The fraud netted Piper at least £300,000 with one investor losing £150,000. Another investor, an elderly woman who had already been a victim of World Wide Wines Ltd, was persuaded to buy a further £33,000 worth of wine from Embassy. This included a case of 2004 Haut Brion for £10,000 in 2012, which could have been bought elsewhere for £2400. The salesman claimed it should have cost £12,000! 

Embassy offered to sell her portfolio for £60,000 – charging £20,000 in ‘legal fees’ reimbursable in seven days.   

HMRC was defrauded for £51,104 as Piper failed to declare any income between 2008 and 2014.

Embassy Wines UK Ltd was founded on 28^th June 2011. It was wound up in the public interest on 3^rd December 2014. Piper was the sole director and shareholder with just £1 of share capital. 
Piper has been jailed on Judges Remand and will be sentenced on 16^th September 2016. I hope that Judge Louise Kamill will out Piper away for a good stretch and that Piper will be forced to repay his victims, whose life savings he looted and spent on high living including nearly £90,000 on a BMW X6 and a Range Rover Sport. Piper's expertise lay not as he claimed in fine wine but in trousering his elderly and vulnerable clients' money.  

On 17^th November 2015 Piper was banned for being a UK director for 11 years.  

Over the past three years recovery room wine investment/advance fee frauds have become increasingly common. Victims of previous wine investment scam companies are contacted by new firms and offered deals on their wine portfolios at well above market price.
Some companies also make bogus claims to have taken over liquidations from legitimate companies like Grant Thornton and ‘found’ investors missing wines abroad. Invariably investors are again left empty handed.  

It is good to see that some of these heartless fraudsters – vile individuals who exploit vulnerable people – are being prosecuted.    

Bonds against the Scammers

Representatives from EHD and London City Bond (LCB) met with me on Tuesday 21^st April in Central London to discuss launching a new initiative – Bonds against the Scammers. In particular they will now be sharing information with each other and investdrinks about scam wine investment companies. 

Although in competition with each other, EHD and LCB are committed to making life difficult for wine investment scammers. This is certainly business that they do not want.

It is not wanted because wine should be enjoyable and they do not want to see their customers being ripped off. It is also not wanted because when things go wrong and the scam company goes bust or disappears, then it is usually the bonded warehouse that is left to pick up the pieces. Left to deal with understandably upset and irate investors, who may often have sunk a significant proportion of their life savings into wine they either doesn’t exist or for which they have been charged far too much.

Although the bonded warehouses are not in any way part of these scams, it is not surprising that some defrauded investors unfortunately assume that the bonded warehouses are somehow part of the scam.

HMRC (HM Revenue & Customs) and the money laundering regulations require bonded warehouses to carry out due diligence on customers wishing to open accounts. It is clear that these regulations put the emphasis on those wanting to open accounts to prove that they are legitimate.

LCB and EHD already do refuse to open accounts for companies they consider dubious as well as closing or freezing accounts of companies or individuals whose accounts arouse suspicion.

Often scammers refused an account at one bonded warehouse will apply to another bonded warehouse in the hope of slipping through. EHD and LCB agreeing to share information on companies and individuals refused an account or who arouse suspicion will make life more difficult for the scammers.

The bonds will also exchange information on their due diligence procedures and see how far these can be coordinated.  

We hope that other bonds especially other third party warehouses like Octavian will join in this initiative. 

Bordeaux Fine Wines Ltd: taxman also looking to close company + Mirror story

Andrew Penman's story: 9th January 2014

Along with the Insolvency Service HM Revenue and Customs are also petitioning to close down Bordeaux Fine Wines Ltd. Their petition was published in the London Gazette on Thursday 9th January 2014. Part of the HMRC petition:

Notice: 1971742 (Issue: 60748)

Date: 9 January 2014

Issue Number: 60748

Page number: 381

Publication Date: Thursday, 9 January 2014

Notice Code: 2450

Petitions to Wind Up (Companies)

In the High Court of Justice (Chancery Division)

Companies Court   No 8692 of 2013

In the Matter of BORDEAUX FINE WINES LIMITED

(Company Number 06701468) and in the Matter of the Insolvency Act 1986

A Petition to wind up the above-named Company, Registration Number 06701468, of Abbey Orchard Street, London, SW1P 2HT formerly of Imperial House, North Street, Bromley, Kent, BR1 1SD, presented on 9 December 2013 by the Commissioners for HM Revenue and Customs, of Bush House, Strand, London, WC2B 4RD, claiming to be Creditors of the Company, will be heard at the Royal Courts of Justice, 7 Rolls Buildings, Fetter Lane, London EC4A 1NL, on 3 February 2014*, at 1030 hours (or as soon thereafter as the Petition can be heard). 

The Insolvency Service's petition to close Bordeaux Fine Wines Ltd in the public interest is due to be heard on 26th February 2013. 

The full announcement in the London Gazette can be read here. 

It remains to be seen whether Ken Gundlach, the company's sole director, will contest these petitions. It would, however, not be a surprise if they are not contested as Gundlach is in the process of closing down a number of his companies.   

* Update: The petition by HMRC to wind up Bordeaux Fine Wines Ltd has been put back to 3rd March 2014. If the Insolvency Service's petition to wind up the company in the public interest succeeds on 26th February then HMRC's petition will not need to be heard.  

•••

Andrew Penman 'race-stopped' Ken Gundlach at Lingfield Racecourse to ask him about a Mirror reader's expensive wine bought from Bordeaux Fine Wines Ltd. The reader had sunk his life savings in these wines supposedly stored at London City Bond. Unfortunately there is no sign of them at LCB. 

Nor, apparently, is there any sign of 10 cases bought by a middle aged woman who also sunk a substantial part of her life savings in wine from Bordeaux Fine Wines Ltd. She bought 28 cases in all but there are only 18 of them at London City Bond with 10 missing. 

Another client of BFW's is concerned about his en primeur purchases. 

It is not known whether these are isolated examples or whether Ken Gundlach's Bordeaux Fine Wines Ltd failed to buy a significant proportion of its clients' wine. If it transpires that there are many wines missing, then given that BFW's turnover was very close to £20 million (£4.9m dividend to sole shareholder – K. Gundlach) there ought to be a police investigation. Furthermore given the company's turnover BFW comes under the remit of the Serious Fraud Office.