Former CEO of Diamond Estates arrested for fraud
A dozen people including the former CEO of Diamond Estates Winery have been arrested in Montreal as part of an investigation into an alleged tax fraud in which 1.8m bottles of wine were sold on the black market.
As reported by the Montreal Gazette, the gang were arrested by Montreal police squad Actions Concertée pour Contrer les Economies Souterraines (ACCES) on Tuesday.
Among the ringleaders are said to be two Ontario wine professionals, while a thirteenth person is being sought on an arrest warrant.
Dubbed “Project Malbec”, the investigation began last January and has uncovered a record number of contraband wines sold by a single network.
The group is alleged to have sold over 1.8 million bottles of wine illegally over the last four years.
The scheme involved bringing wine in 24,000-litre containers through the port of Montreal, transporting it to Ontario to be bottled to look like popular wine brands, then returning it to Quebec through Kahnawake.
Montreal police started the investigation after seizing 100 cases of wine in one go.
First Nations Winery in Kahnawake, run by Floyd Lahache, is under investigation for its involvement in the scheme.
Luca Gaspari, director of Les Vins Tenute Santarelli Inc, is also under investigation. He is known in Canada for making “wine” from maple syrup.
According to commander Marco Roy, head of ACCES, Murray Marshall, the former president and CEO of Diamond Estates Winery in Ontario, has been arrested as part of the investigation and is alleged to be one of the ringleaders.
“They had a very well-organised distribution network,” Roy told the Montreal Gazette.
Diamond Estates Wines & Spirits was founded in 2000 became a publicly traded company in 2013. Among the wines in its portfolio is a range made by actor Dan Aykroyd.
President from 2001 until October 2013, when he was succeeded by J. Murray Souter, Marshall was fired by Diamond Estates in May 2014.
Souter spoke to db today about the investigation. “Diamond Estates Wines & Spirits is aware of the fraud investigation surrounding the First Nations Winery and we have been cooperating fully with the authorities in their investigation. We are compliant with all federal and provincial laws and have not been implicated in any of the alleged criminal activity,” he said.
“We ceased doing business with First Nations Winery in December 2014 immediately after learning of the fraud investigation by the Montreal Police,” he added.
An individual acting as an accountant for the group was also arrested on Tuesday, with the remaining suspects having worked as distributors.
The dozen suspects are due to be charged with fraud, conspiracy, possession of proceeds obtained through crime, and counterfeiting.