With the news that a British national has been arrested by the FBI over a $13m whisky scam, we take a closer look at dodgy whisky investment schemes and wonder how long it will be before British and Irish authorities take an interest.
A British national, Casey Alexander, was arrested last week by the FBI over a reputed scam where 150 investors lost around $13m dollars. He worked with three companies Charles Winn LLC, VWC LLC and Windsor Jones LLC which would phone older people in the US and promise them huge returns on their investments for rare whiskies including 2017 Craigellachie, as well as fine wine.
Some were told they would double their investments in three years while others were lured in by the promise of high roller parties in Scotland. According to Cleveland.com, the high pressure salesman used “aggressive and deceptive tactics” and fake names and British accents to sound more convincing.
It was an 89 year old man from Ohio who eventually called the authorities after losing $300,000 to the scammers. The FBI investigated the companies and discovered many cease and desist letters from state security agencies.
Alexander travelled to the US to meet with potential investors. In addition to working to lure in clients, he also handled money for the three companies implicated and his name is on the financial paperwork. Alexander was arrested last Tuesday and is awaiting trial.
If you’re interested in whisky, like we are, we’re sure that you have been bombarded with adverts from companies promising lucrative returns. And looking at the websites for the three companies implicated, Charles Winn LLC, VWC LLC and Windsor Jones LLC, they look very slick and convincing, showing smart young men and women in suits with tempting figures about how much you can make from investing in whisky. They have offices in London and the US. There are videos on the VWC site explaining different aspects of whisky and the business. These chaps really look like they know what they’re talking about. And like legitimate enterprises, they are committed to ending whisky elitism: “Our main goal is to rebrand the taboo of whisky and bring youthfulness to the market,” it says on the website.
It’s hard to tell what’s real and what’s not, especially as despite Alexander’s arrest, he is still being quoted* in an article on another whisky investment company’s website, VCL Vintners.
American authorities crack down
It seems like the American authorities are far more awake to the potential for investors to be misled than those in Britain or Ireland. In December last year, the Texas State Securities Board recently announced “an emergency cease and desist order to stop an illegal international whiskey investment scheme.”**
The scheme in question was the Whiskey & Wealth Club Limited, a business headed up by Jay Bradley with offices in London and Dublin. “We’re alleging that Whiskey & Wealth Club is touting its success in profiting from sales of casks of whiskey that are at least three, five or ten years old,” said Joe Rotunda, TSSB enforcement director. “That’s misleading. The company has not even been incorporated for three years.” And as the TSSB noted, its accounts with Companies House are overdue. Rotunda and team also claim that Whiskey & Wealth Club is deceiving customers in other ways including refusing to show investors the contract until a deposit has been received.
How to protect yourself
So as usual with these things, it pays to do a bit of research. It’s worth reading Ian Buxton’s article on the subject. Companies House is your friend here. If the directors have been involved in a large number of short-lived companies, then potentially alarm bells should be ringing. In about two minutes on Google, I discovered that Charles Winn has something of a chequered history. See this thread on Wine Berserkers. According to a cease and desist order from the State of Washington from 7 January 2021:
“Charles Winn and its sales agents have engaged in a cold-calling scheme to target investors throughout the United States to invest in its wine brokerage program. Charles Winn claims it will identify and purchase a portfolio of fine wines on behalf of investors, which will be held in a bonded warehouse until sold for a profit. Charles Winn raised at least $5 million dollars from investors nationwide. Between approximately January 2018 and October 2020, four Washington residents invested approximately $68,000 in Charles Winn’s wine brokerage program. The Washington residents received repeated cold-call solicitations and were told they could make a lucrative return on an investment. To date, none of the investors have received a return on their investment.”
We wonder how long it will be before the British and Irish authorities take an interest in potentially fraudulent whisky investment schemes.
* Since this article was published a spokesman for VCL Vintners has been in touch with the following statement: “VCL Vintners have never spoken to or had communications with Alexander Casey, and as soon as they found out, they took the syndicated article down with immediate effect”.
** Since this article was published, The Texas State Securities Board dismissed the cease-and-desist order against cask wholesaler Whiskey & Wealth Club.