Brooklyn’s latest import: UK wine fraudster in a $99 million scandal

December 22, 2023 Robert Abruzzese, Courthouse Editor

Breon Peace, U.S. Attorney for the Eastern District of New York. Photo: Andrew Harnik/AP

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Stephen Burton, a U.K. citizen, faces charges of wire fraud conspiracy, wire fraud and money laundering conspiracy at the federal court in Brooklyn. He was extradited from Morocco to the Eastern District of New York and arraigned before United States Magistrate Judge Taryn A. Merkl.

The defendant was allegedly involved in a $99 million wine-fraud scheme operated through his company, Bordeaux Cellars.

Burton was extradited from Morocco, where he was arrested in 2022 using a false Zimbabwean passport. His co-defendant, James Wellesley, is currently undergoing extradition proceedings in the United Kingdom.

United States Attorney for the Eastern District of New York Breon Peace, alongside FBI Assistant Director-in-Charge James Smith, announced the extradition and arraignment.

“With the successful extradition of Burton to the Eastern District of New York, he will now taste justice for the fine wines scheme alleged in the indictment,” Peace said. “This prosecution sends a message to all perpetrators of global fraud that you can run from law enforcement, but not forever.”

The indictment alleges that from June 2017 through February 2019, Burton and his associates, posing as executives of Bordeaux Cellars, engaged in fraudulent activities. They targeted investors, including residents of the Eastern District of New York, by offering investments in loans to high-net-worth wine collectors, supposedly collateralized by valuable wine collections.

These claims were false, as the purported high-net-worth collectors did not exist, and Bordeaux Cellars did not hold any wine as loan collateral. Instead, the scheme used new loan proceeds to make fraudulent interest payments and cover personal expenses.

Burton’s case, now in the hands of the Eastern District’s Business and Securities Fraud Section, is being prosecuted by Assistant United States Attorneys Lauren Elbert and Benjamin Weintraub. If convicted, Burton and Wellesley face up to 20 years in prison each.