Two directors banned over £1m fine wine scam

Two directors of a company that traded in fine wines have been disqualified for a combined 20 years, following an Insolvency Service investigation, after scamming its customers out of nearly £1 million.

The investigation by the Insolvency Service found that Crimson Fine Wines Limited, based initially in London and then in Sittingbourne in Kent, used cold calling to ensnare clients, and then failed to purchase or allocate wines to customers who had paid for their investments.

The scheme offered investors returns over 12 months to five years, at a time when they claimed the property market and shares were less attractive.

Craig Cooper, of Chatham, Kent, and Jefferey Kushner, of Ontario, Canada, who together ran the operation, have both been banned from acting as directors for 11 and 9 years respectively.

Kushner was the listed director of Crimson Fine Wines Limited but lived in Canada, and allowed Cooper, who had previous experience in the industry, to run the operation. At at the time of liquidation of Crimson Fine Wines Limited there was insufficient wine held in the bonded warehouse to satisfy customers’ claims.

Additionally, Cooper used the company’s bank account for his own personal benefit, used his own personal bank account for the receipt of company funds and was paid at least one third share of £114,106 in dividends. Kushner was negligent in failing to monitor the company account, allowing it to be used for non-commercial benefits, but also received at least one third share of £114,106 in dividends.

Customer claims in the liquidation totalled £989,258, of the overall debts on liquidation of £1,080,724.

“One of the main purposes of the Company Directors Disqualification Act is to ensure proper standards of conduct of company directors are maintained and to raise those standards where appropriate,” said Karen Jackson, official receiver with The Insolvency Service.

“These disqualifications should serve as a reminder that the Insolvency Service will investigate unacceptable conduct by company directors. The Insolvency Service will take action against directors who do not take their obligations seriously and abuse their position.”

The disqualification order means that neither men, without specific permission of a court, can act as a director of a company, take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership, or be a receiver of a company’s property.

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