BWTC and IWC: Craven and Hayble jailed

Today at St Albans Crown Court Paul Craven was sentenced to six years for fraudulent trading in connection with the Bordeaux Wine Trading Company Ltd. Oseghale Hayble was sentenced to five years for the same offence for International Wine Commodities.

The maximum sentence is seven years for a single offence.

I understand that Craven wrote to His Honour Judge John Plumstead apologising for his stupidity but the Judge said it wasn't a question of Craven's stupidity rather that he was dishonest. Craven was principally to blame for setting up the fraud. The judge said that the jury's verdict was absolutely correct and that Craven had wasted people's time and money with his highly unlikely defence through two trials.

The judge would have likely to give Craven a longer sentence but his hands were tied with seven years being the maximum.

There will now be proceedings to confiscate the fraudsters' assets.

The investigation was carried out by the Economic Crime Unit of Hertfordshire Police.

The Bordeaux Wine Trading Company: fraud trial 20th June 2011

St Albans: Monday 20^th June 2011

Defendants: Paul Craven and Oseghale Hayble*

Charges:

Fraudulent trading

Between 21^st July 2006 and 19 June 2008 knowingly party to the carrying on a business of a company Bordeaux Wine Trading Company with the intent to defraud the creditors of said company. 

It is accepted that the Bordeaux Wine Trading Company Ltd bought none of the wine (all en primeur) that their clients ordered.  

Monday 20^th June 2011

Three witnesses: Stephen Creaton (salesman with Bordeaux Wine Trading Company), James Seaton (salesman with Bordeaux Wine Trading Company) and Frederick Achom (owner of the Bordeaux Wine Company). 

Stephen Creaton

From April 2006 he had worked at the Bordeaux Wine Company, a wine investment company set up in 2002, where he had met Oseghale Hayble, who was his line manager. At BWC his role was to cold call from qualified leads. BWC sold First and Second Growth wines – both finished wines and en primeur. Anthony Grant was his manager with Hayble as his deputy.

After Hayble left BWC he contacted Creaton to offer him a job with the his new company – The Bordeaux Wine Trading Company (BWTC). He decided to accept as the pay was better with a more favourable commission structure and the offices in Potters Bar were closer to his home whereas BWC was based in Central London.

As at BWC the sales force at BWTC used Goldmine, a software progam to keep track of clients. The sales force used a script provided in a folder.

Hayble was again his line manager, who spent most of his time with the sales team. Creaton described Hayble as “very fair, generally a nice manager”. Paul Craven wasn’t in the office generally spending his time when he was there in the back office. “Craven was very insistent that the sales team should be on the phone – even getting a coffee was hard.”

There were two white boards in the sales room. One recorded the sales made by the staff. It was Hayble, who kept this board up to date. The other board listed the five First Growths and their prices. The list of wines never changed, although the prices did. There was no indication of the quantity of wines available and it was Craven who changed the prices. Samantha Cohen, Craven’s barrister, challenged Creaton whether he was correct to say that it was Craven who updated the prices. Although pressed on this, Creaton maintained that it was Craven who updated the prices.

In time Creaton become concerned about BWTC and whether the wines were being bought. As he came to learn more about the fine wine market an off-the-cuff remark by Craven that he was off to Bordeaux to buy wine was a catalyst for his concerns   

In time Creaton stopped selling and started to look for a new job. He was asked about the cars that Paul Craven drove and mentioned that Craven had a series of one car after another. This included a black Porsche, Golf and a motorbike – £10,000 new bike.      

James Seaton

Seaton was another salesman at the Bordeaux Wine Company Ltd where he spent about 18 months. He was trained by Hayble and met Paul Craven at BWC. His role there was to cold call potential clients and to follow up calls.

In January 2007 he was contacted by Craven, who told him that he could earn better money. He accepted and started work at BWTC’s office in Potters’ Bar in February 2007. His day-to-day contact was with Hayble.

 Initially working at BWTC went OK but as time went on it became more and more chaotic, especially once Hayble left in ‘September-October 2007. “Nothing organized.”

Seaton was asked about the two white boards. One had targets and amounts of wine that had been sold by the sales team. The other listed the prices of the wines to be sold. He didn’t know how much wine there was to sell.   

Seaton had no contract of employment with BWTC. By January 2008 the company was disorganised “It was a chaotic place to work.”

Cross examined by John Femi-Ola, Hayble’s barrister, Seaton said that Hayble drove a black Honda, while Craven was “living it large’. Seaton listed the cars that Craven drove: a Range Rover, black Porsche, sports motorbike, a BMW convertible and a Golf Sports. “But not all at the same time,” Seaton added.

Seaton explained that from time to time Paul would offer special one-off-commission deals on wines – known as spivs. These were offered “apparently at Paul’s whim.  Ose was much easier to deal with. Appeared to me that Paul was a law to himself.”

From August 2007 after Hayble had left “the business went down the drain. The admin collapsed. The secretary left and wasn’t replaced. The office was manic and chaotic. Craven was in the office less and less. Sarah, Paul’s partner, would come in from time to time.”

Seaton was asked by Femi-Ola, who he thought was responsible for buying the wine in the period from August 2007 to January 2008 after the departure of Hayble. Seaton wasn’t aware of who was responsible for buying the wine. His Honor Judge Plumstead listed for Seaton the people who had left the company and the person still at the company – Paul Craven.

Frederick Achom

Partner in the Bordeaux Wine Company

Frederick Achom is a partner in the Bordeaux Wine Company Ltd (BWC), a wine investment company established in 2002. Craven and Hayble worked for  BWC prior to setting up BWTC. Achom explained that the company offers both bottled wines and en primeur. They purchase from UK based merchants – top wine merchants – as well as from France and Switzerland and négociants in Bordeaux. He described BWC’s invoice to customer system for en primeur including an allocation confirmation certificate, showing who they had bought the wine from. In 2006 he had a 12-15 strong sales force and the company was turning over £3.5 million. The sales’ staff were paid a basic wage of £25,000 with between 2%-4% commission.

Up to 2006 it was Achom who bought wine – now it is Arlene King. 

Achom explained that their margins were “way higher when they started” and that they were “slightly over-priced”. He said that the 2005 vintage was the beginning of the boom and that certain wines were increasing in price by 30% a year. 2000 Lafite had gone from £3000 to nearly £20,000.

Hayble worked for BWC off and on for a number of years. His periods of work at BWC would be interspersed by his time modelling and acting. In all he probably worked seriously for BWC for 18 months. Achom was aware that Paul Craven had worked briefly for BWC but he had never met him.

Achom was asked by prosecutor Ann Evans whether he was aware that he was a hero to Paul Craven. “He looked up to you. Your success – your cars: Lamborghini etc.” Achom was not aware that Craven took him for a role model.

In June 2006 Hayble told Achom over lunch that he was going to Los Angeles to see if he could make a real go of his acting career. However, later Achom learnt when he started receiving phone calls from BWC clients, who had been contacted by BWTC, that Hayble had actually set a rival wine investment company with Paul Craven. “When we checked the prices BWTC were offering on wine-searcher, they were way too low,” said Achom. BWTC were selling below the market price.

Achom was asked about a phone call he made to Hayble in October 2008, after Hayble had gone on to set up International Wine Commodities Ltd,  challenging him saying “Up to your old frauds again!”     

Achom was also asked about how companies pay for the wine they order. “We pay by bank transfer or by cheque. The idea of paying for wine using bundles of cash in brown envelopes is a nonsense.” Craven would claim repeatedly when he gave evidence this week (30^th June – 1^st July) that it was Hayble’s responsibility to buy the wine and that he was given money in brown envelopes for this purpose.

  * Later in this week Hayble became ill and proceedings against him were halted with the jury discharged from considering his case. Craven is now the sole defendant in this trial.  A report on his time in the witness box will be added shortly.

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: '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. 

Bordeaux Wine Trading Company and International Wine Commodities: trial postponed

The trial at St Albans Crown Court of the directors of these two companies has been postponed until 11th October to allow the prosecution to add Templar Vinters Ltd to the proceeding.

Bordeaux Wine Trading Company and International Wine Commodities: June trial

The combined trial of the directors of these two wine investment companies is due to start at St Albans Crown Court on Monday 7th June.

Bordeaux Wine Trading Company Ltd:

Directors Paul Craven, Niklaus Cashman & Oseghale Hayble were arrested in June 2008. They were charged in March 2009 with conspiracy to defraud, and money laundering.  

International Wine Commodities Ltd

Directors Oseghale Hayble and Benedict Moruthoane were arrested in October 2008. They were charged in June 2009 with conspiracy to defraud and money laundering.  

All the defendants have pleaded not guilty.

  

The investigation into the two companies and their directors is being conducted by the Economic Crime Unit of Hertfordshire Police.