Wine distributor jailed for fraud after using reality TV to lure investorsBy Phoebe French
A New York-based wine and spirits distributor has been convicted of fraud in connection to a product that featured on TV programme Shark Tank, the US equivalent of Dragons’ Den.
Joseph Falcone, 60, from Florida, was sentenced to two years in prison last week after appearing in a federal court in Long Island.
Falcone ran 3G’s VINO LLC, a wine and spirits distributor based in Bethpage and Farmingdale in New York. One of the products that the company distributed – a single-serve of wine in a sealed glass called Copa di Vino – appeared on the television programme Shark Tank, which sees entrepreneurs pitch products to investors.
While the product failed to gain backing on the show, Falcone used the product’s television appearance to solicit funding between September 2014 and November 2015.
Investors believed their money would go towards the growth of the single-serve wine company. They sent money to bank accounts in Florida, controlled by Falcone, who subsequently used US$527,064 “for his personal benefit”, helping to pay off a mortgage and finance his online securities trading.
Falcone pleaded guilty to one count of wire fraud in June 2019.
According to CNN, Falcone wrote to the court admitting to the crime.
He said: “I took investors’ money for the purpose of investing it into a start up wine business. Then, I wound up co-mingling funds with personal funds, and using some of the investors’ money for my own ends. As the business grew, so did the expenses, and I wound up not being able to pay all of the investors back. I was wrong to do this. For this, I am deeply sorry and fully accept responsibility.”
As well as the prison sentence, United States District Judge Sandra J. Feuerstein ordered Falcone to pay US$1.8 million in restitution to seven of 3G’s investors.
Seth D. DuCharme, acting United States attorney for the Eastern District of New York, said: “Falcone’s victims were reeled in by his “Shark Tank” pitch, but with the sentence, the defendant is now squarely on the hook for his crimes. This Office remains committed to prosecuting those who mislead the public and abuse the trust placed in them to engage in fraud against their own investors.”
James Martin, Copa di Vino founder, commented: “Joseph Falcone did not pitch Copa di Vino on Shark Tank, nor was he ever an investor in the product. I was the only person to appear on the show on behalf of my brand. In fact, I did not engage with his company, 3G’s VINO LLC, until four years after my Shark Tank pitch. I am not familiar with any details around his indictment as we were in no way involved, but was very saddened to hear that he was using our Copa di Vino brand to mislead investors. His company was strictly our distributor. We severed ties with Joseph and his company in 2016.”