Wine investment boss jailed for ripping off clients
A wine company boss who pocketed £300,000 by cheating his clients out of their fine vintages has been jailed for five-and-a-half-years.
Jonothan (corr) Piper, 30, was the sole director of Embassy Wine UK Ltd, which claimed to act as brokers for investors in fine wine.
The company cold called prospective investors and persuaded them to hand over control of their portfolios to Embassy, which then sold them and broke off contact.
These ‘clients’ were also made to fork out ‘eye-watering fees’ before any sales could be transacted, Snaresbrook Crown Court heard.
One was encouraged to take out bank loans, credit cards and even cash-in his pension to meet Embassy’s staggering charges.
Although the real number of victims caught in the sting is almost certainly higher, five people eventually came forward after being ripped off for a combined £300,000.
They included retied deputy head teacher Hilary Cooper, 69, who lost £137,225 after being contacted when her former brokerage firm, Bordeaux UK Ltd, went bust in 2011.
Ms Cooper was persuaded to make multiple purchases from Embassy before they could sell off her portfolio which was eventually transferred to Embassy’s account before she received any paperwork.
Similarly, retired accountant James Tee, 69, along with 65-year-old Jonathan Parker were conned out of a combined £68,000.
In addition, company director Gordon Grant, 62, and sweet factory packer David Eley, 49, lost £49,858 and £24,086 respectively.
Piper used the cash gleaned from the con to fund a lavish lifestyle and spent almost £90,000 on a BMW X6 and Range Rover Sport.
Shortly after flogging Ms Cooper’s wine he withdrew £33,500 in cash, spent £5,180 on his credit card – including £2,000 gambling in Coral – and splashed out £47,000 at Jaguar.
None of the income he generated between 2008 and 2014 – either legitimately or otherwise – was declared to HMRC, which was subsequently swindled out of £51,104 in income tax payments.
Piper admitted cheating the Inland Revenue, fraudulent trading and two counts of converting criminal property on what was due to be the first day of trial last month.
Prosecutor Leo Seelig said: ‘Between 2008 and 2014 Mr Piper received into his various bank accounts £667,000 or thereabouts.
‘Throughout that same period he paid nothing in tax because he declared none of this money to HMRC.
‘A large part of that ‘income’ came from the fraudulent trading of a company, Embassy Wine UK Ltd, of which Mr Piper was the sole director.
‘It was a company that Mr Piper and others operated solely in order to fleece wine investors of money.’
Generally, wines belonging to investors were held in customs-approved bonded warehouses through which they held an account.
That allowed any broker to buy or sell wines without them ever leaving the premises – instead being transferred to the purchaser’s or seller’s account.
The two warehouses featured in Piper’s scam were Octavian Vaults and London City Bond while many of his victims had previously been clients of Bordeaux UK before they went into liquidation or made losses through other firms.
‘Embassy was not engaged in the business – at any stage, the prosecution would say – in the business of legitimate brokering,’ Mr Seelig explained.
‘The number of people who participated in its fraudulent dealings is not entirely clear, but what is clear is that the sole director, Jonothan Piper, received all of the money generated by the company.
‘He received it into several accounts, each set up by him.
‘The company’s tactic was to cold call people who it knew were already wine investors – presumably because they appeared on marketing lists – and dazzle them with a sales pitch.
‘However, before those sales ever materialized the victims were persuaded to hand over control of their wines to Embassy, who subsequently sold them and then fell out of contact, invariably stalling for quite some time before doing so.’
The prosecutor added that victims were also charged ‘eye-watering fees’ before those sales could be transacted.
An investigation was eventually launched by the Department of Business, Skills and Innovation which involved a search of Piper’s home in September 2014.
Investigators discovered an Apple laptop containing various emails containing sales pitches, crib sheets and an ‘opening script’.
‘These emails would demonstrate, the prosecution say, that he was instrumental to the setting up of, development and running of Embassy,’ said Mr Seelig.
‘The emails further show that the defendant was keen to close the company in May 2013 – presumably because he knew his victims were not far behind him.’
Following Piper’s notification of the charges against him, last November, Mr Tee, Ms Cooper and Mr Grant were further contacted by ‘representatives’ of Embassy offering payments to drop their complaints.
‘The prosecution would say that whoever made these calls was either Mr Piper or a person instructed to do so by him because Jonothan Piper was the only suspect in the criminal investigation and was the only person contacted by the authorities,’ added Mr Seelig.
‘The prosecution would say that was a brazen attempt to pay off his accusers.’
Defending, Leon Kazakos insisted that there had originally been some merit to the company before its descent into fraudulent trading.
‘I do not accept that there was nothing legitimate about this company,’ he said.
‘Wine was bought, it was sold, but something led Jonothan Piper into a substantial period of dishonesty.’
Mr Kazakos added that Piper was ‘no more capable of setting up this business than he was flying to the moon’ but was rather approached with the idea of signing on as a director by a third party.
In his mid-twenties at the time, the ‘dutiful son’ and ‘devoted’ grandson spiralled into a cocaine and gambling addiction after losing both of his uncles.
The court heard Piper had squandered £40,000 at Coral, Betfair and Sky Bet and at the height of his cocaine habit was buying up to two ounces each week.
Branding him the ‘driving force’, Judge Murray Shanks told Piper: ‘You set the company up.
‘Your fingerprints are all over their activities and no-one else has been identified.
‘I do not accept that you were forced into it in any way or that somebody else is the boss behind it.
‘Indeed, it is an aggravating feature that after the proceedings started somebody, who I can only infer was you, tried to interfere with those proceedings by contacting three of the losers to try to persuade them to drop things in return for payments.
‘It is said in your favour that you stopped the activity voluntarily without police involvement.
‘I am afraid that is mitigation I do not accept.
‘The fact is you were trying in 2013 to wind up the company and disappear but that did not work because some of the people who lost money had already complained.’
The judge highlighted the ‘sophisticated’ and ‘sustained’ nature of the fraud but conceded there was ‘some kind of business’ rather than it being an entirely ‘imaginary’ firm.
‘It may not have been fraudulent from the outset but it certainly was fraudulent over a period,’ he continued.
‘I accept that the victims were not targeted because they were vulnerable – they were targeted because they had wine and the company they had previously been dealing with went bust.
‘But there is a flavour of taking advantage.’
Judge Shanks then added: ‘I am told you have a gambling and drug addiction.
‘I am afraid that does not carry a lot of weight either.
‘It is you who got yourself into that position where you had to cheat people in order to carry out that lifestyle.’
Piper, of (4) Foxglove Gardens, Wanstead, east London, admitted cheating Inland Revenue, fraudulent trading and two counts of converting criminal property and was jailed for five-and-a-half-years.
He has already been banned from acting as a company director for 11 years.
Ends
MEMO
8/4/1986 (30)
(4) Foxglove Gardens, Wanstead, Redbridge, east London, E11 2EG
1. Fraud by false representation. Jonothan Piper, on or about the 20th day of February 2013, dishonestly made a false representation to the Child Support Agency, namely, that he was financially dependent on his parents and had no other source of income, savings or investments which would generate any income for him, knowing this to be untrue and intending thereby to cause loss to another or expose another to risk of loss. NOT GUILTY PLEA – TO LIE ON FILE
2. Cheating Her Majesty the Queen and the Commissioners of Inland Revenue. Jonothan Piper, between the 1st say of April 2008 and the 5th day of April 2014 with intent to defraud and to the prejudice of Her Majesty the Queen and the Commissioners of Inland Revenue, cheated Her Majesty the Queen and the Commissioners of Inland Revenue, namely income tax and class 4 national insurance contributions, by failing to account for income he received during the same period. GUILTY PLEA – SENTENCED TO TWO YEARS IMPRISONMENT
3. Fraudulent trading. Jonothan Piper, between the 28th day of June 2011 and the 8th day of October 2014 was knowingly a party to the carrying on of the business of Embassy Wine UK Ltd for a fraudulent purpose, namely, fraudulently obtaining wine and money from customers of the company and failing to disburse monies owing to customers from the sale of their wine. GUILTY PLEA – SENTENCED TO THREE-AND-A-HALF-YEARS IMPRISONMENT TO RUN CONSECUTIVELY
4. Converting criminal property. Jonothan Piper, on the 15th day of February 2013, converted criminal property, namely, money totalling £40,800, knowing or suspecting it to constitute a person’s benefit from criminal conduct. GUILTY PLEA – SENTENCED TO 15 MONTHS IMPRISONMENT TO RUN CONCURRENTLY
5. Converting criminal property. Jonothan Piper, between the 4th day of March 2013 and the 8th day of March 2013, converted criminal property, namely, money totalling £46,993, knowing or suspecting it to constitute a person’s benefit from criminal conduct. GUILTY PLEA – SENTENCED TO 15 MONTHS IMPRISONMENT TO RUN CONCURRENTLY
MEMO ENDS
