Reported by Lily Mae Lazarus

(Excerpt featured below. To read full report, go to: https://finance.yahoo.com/news/inside-99-million-luxury-wine-202152243.html)

Two childhood friends have found themselves at the center of a multimillion-dollar fraud prosecution in New York after what started as a luxury wine lending business promising lucrative returns cost investors nearly $100 million.

James Wellesley, a disbarred British lawyer, and his former business partner, Stephen Burton, established and ran Bordeaux Cellars, the company at the center of the federal inquiry. Wellesley was extradited to the U.S. two weeks ago to face charges of wire fraud and money laundering; Burton, meanwhile, was extradited in 2023.

The indictment of Burton and Wellesley, filed in the Eastern District of New York in 2022, alleges the two men raised $99.4 million from over 140 investors, 71 of whom were based in the U.S., and lost a collective $25 million. Prosecutors say Bordeaux Cellars, by and large, never had the wine it claimed to hold as collateral, and many of the specific bottles listed in loan documents were never in its custody.