A Ponzi schemer who misled his victims into thinking they were giving loans to wealthy wine lovers using their rare bottles as collateral has admitted to his role in the $99 million scam in Brooklyn Federal Court.
Stephen Burton, 60, and his accomplice, James Wellesley, put the lie to the Latin phrase, “in vino veritas,” creating a company called Bordeaux Cellars in 2011 and claiming they could connect investors with “high-net worth individuals” who owned pricey wine collections but needed a quick loan of cash, according to the feds.
The targets of the scheme were promised repayment on their loans with interest over 12 months.
But their promises were more vinegar than vintage, according to the feds.
The rich wine owners were nothing more than a boozy mirage and many of the specific bottles of wine identified as collateral didn’t exist, federal prosecutors said.
Instead, the duo used money from new investors to pay initial investors the interest they were expecting, Burton admitted Thursday in Brooklyn Federal Court when he pleaded guilty. “There was no wine,” he told Judge Pamela Chen. “For some of these loans, there was no wine.”
Burton, who pleaded guilty to wire fraud conspiracy and money laundering conspiracy, could face between 24 to 29 years in prison based on federal guidelines when he’s sentenced Jan. 6.
Between 2017 and 2019, Bordeaux Cellars paid fake interest to investors using the $99.4 million they got from them while having “thousands fewer bottles of wine in its custody than the loan documents reflected,” according to prosecutors.
Burton pitched his wine-as-collateral business in a 2013 interview with CNBC, saying he was catering to people with bad credit or other problems with banks who were wine rich and cash poor. He told the station he provided 12-to-18 month loans worth 35% of the market value of the wine and charged 15% a year interest as well as a 1% facility fee, passing 12% of that interest to his investors.
“We can offer these people a loan within 24 hours,” he said, adding, “I’m not a pawnbroker, I’m a wine dealer.”
He presented his business plan at a conference called “Sovereign Man” that was posted to YouTube six years ago. He told the audience he got the idea from an article about a pawnbroker who had a warehouse full of Aston Martins and Ferraris from bankers who had lost big during the 2008 financial crisis.
“I thought, ‘You know what, I can do that with wine,’” he said at the conference. “I started buying wine 30 years ago, not as an investment, but as something I really enjoyed.”
Burton, a U.K. native, was indicted in 2022 and has been locked up since his extradition from Morocco in December 2023.
Wellesley, also indicted in 2022, lost his battle to fight extradition from the U.K. and was hauled to Brooklyn earlier this month. He remains locked up as his case is still pending.
Originally Published: July 24, 2025 at 1:53 PM EDT
