Warning – Lynch & Mullin, LLP – shares in Winex-Ex advance fee fraud

Very recently in a most useful message from KP, an investor in collapsed Vinance PLC, a scam wine investment company. An impressive piece of research by KP. Two investors with closed Bordeaux Fine Wines Ltd have also been contacted this month offering the exactly same share scam. 

'Dear Jim,

I wanted to warn the readers of your blog about a new scam going on:

Today I received a cold call from a chap called "Mark Schratton" from a "law firm" called Lynch & Mullin, LLP from Boston, Massachusetts.

The story made kind of sense: "You invested in Vinance PLC some time ago, it looks like those unscrupulous owners who are now all in prison* purchased shares in a company called Winex Inc. and put your name as a shareholder without you knowing as a means of routing/ stashing their investor money. As it turns out, you're in luck because you're now owner of 30,000 shares which our client is looking to buy".

I did invest in Vinance PLC, lost money on it and yes the management of that company is now in prison (or at least some of them). The chap had my contact details, my name, phone number and email. I checked the law firm's website - basic but otherwise well respectable.

Then "his colleague" sends me legal documentation advising me that I own 30,000 shares at $5 each and asks me to fill in my contact and bank details as soon as possible (best today). All looking very legit and professional.

I asked to see my share certificate - and they even produced that.

A few issues with the master plan:

1. Lynch & Mullin LLP does not exist - there's no mention of them in the Massachusetts commercial registry
2. Their website was only registered a month ago
3. There are no legal articles with this firm's name anywhere to be found (Google, Law360...)
4. They managed to produce a share certificate "from the registration authorities" (which they did not originally have) within 1 hour
5. Winex-Ex Inc does not exist - there's no mention of them in the Nevada commercial registry (Nevada as per my "share certificate")
6. In the legal documentation they mention some bogus government agency - the website mentioned in the document is empty (just registered). When asked about it "Mark" provided a different address which was registered only a week ago with apparently the intent for people to contact them to verify that Lynch & Mullin is an actual firm.
7. The servers of this "US govt agency" are hosted in France... hmmm

Full details on investdrinks' blog

Vinance plc: 'criminal disregard' for investors' money

Château Cheval Blanc 

The four directors – Paul Timothy Hayward Ford, Simon John Ford, Michael Alexander Wallen and Simon Antony Earl – of failed wine investment company, Vinance plc, ought to be acutely uncomfortable reading the administrators’ report released by Herron Fisher on 17th  December 2012. It is clear from the report that the company records were both ‘inadequate’ and ‘incomplete’.  So poor were records that it has not yet been possible to establish exactly how much is owed to investors. 
 

Herron Fisher estimates that some £5 million worth of wine is owed to Vinance’s clients, which totaled some 1300.  It is still not known how many of these are creditors. The company did buy wine, quite often from its clients. ‘Often, the company would itself buy wine from clients with a view to selling it to other clients. In this way, it accumulated a large quantity of stock which belonged to the company itself.’ This stock is estimated to be worth around £3 million. Herron Fisher is reluctant to sell this wine until the true position vis à vis the investors and their wine is known.

The report indicates that the directors were criminally negligent with their clients' investments, especially as it is highly likely that clients sold other investments/savings in order to buy wines that they were not allocated or in some cases not immediately bought. I use ‘criminally negligent’ is a broad not legal sense here. The directors promoted Vinance plc as an investment company able to offer its clients good returns on their wine purchased from them. Yet they cared so little about their investors’ financial health that they failed to put in place proper records. 

See the rest of the post here.

Vinance plc: Breaking news – client database bought by Albany Vinners

Locke King Vaults – cases stored in one of the tunnels 

The client database of Vinance plc, which went into administration on 16th November 2012, has been bought by Albany Vintners Ltd. Set up in 2003 by Marcus Edwards, who had worked for leading fine wine merchant Farr Vintners for 10 years – last four as their accountant, Albany Vintners is based in Cambridge. It offers its own in bond storage facilities through Arc Reserves using dedicated storage at Locke King Vaults, the fine wine storage section of EHD Bond.

Albany/Arc will take over the management of client accounts.

I understand that there were eight other bidders. 

It is still down to the administrators, Herron Fisher, to discover what Vinance plc's deficit is and to ascertain what the position is in regard to any en primeur wines ordered by its customers. Whatever the level of Vinance's debt is, this is separate from the deal with Albany Vintners Ltd.

As listeners to Saturday's BBC Radio 4's Moneybox would have heard the directors of Vinance plc were more concerned to score points rather than express regret for the collapse.

It is encouraging to see that the database has been bought by a company with a good reputation and not by a white knight operation set up to mislead investors caught up in the collapse of Vinance plc. Unfortunately this was not the case when Bordeaux UK Ltd went down in November 2011, when Vin Bordelais emerged using the same website and the same phone number as Bordeaux UK Ltd. See here.  

Entrance to the Locke King Vaults (above and below)

The Locke King Vaults are on the edge of the old Brooklands motor racing circuit. It was originally an extensive air raid shelter, which has now been converted to fine wine storage.  

Inside the vaults: side tunnels run off this corridor

An old air raid notice

James Temple: i/c wine storage at the vaults 

Statement by Herron Fisher, administrators:

'ADMINISTRATORS OF VINANCE PLC FIND A BUYER
Christopher Herron and Nicola Jayne Fisher, insolvency practitioners and administrators of Vinance Plc , have reached agreement with Albany Vintners Ltd/Arc Reserves Ltd (Arc) an experienced fine wine specialist, to take over the management of Vinance client accounts.

Nicky Fisher of Herron Fisher said, “We have made this arrangement in order to make life easier for the clients going forward, but of course it is subject to each individual client’s consent.”

All investors have been sent a letter from Arc Reserves with further information.

Arc Reserves said in its letter to creditors that it has reached agreement to take over the management of client accounts.  Going forward Herron Fisher, the administrators, are still working to confirm allocated wines and once this is completed they will liaise with Arc Reserves and investors to facilitate the transfer of cases subject to clients’ consent.

Albany Vintners Ltd is a wholesale fine wine company specialising in buying from Bordeaux and selling direct to private collectors and merchants in the UK, Europe and Asia. It has a dedicated logistics arm, Arc Reserves Limited, to provide a specialist storage and portfolio management solution for private clients.

Herron Fisher, led by Chris Herron and Nicky Fisher, is an expert corporate recovery and insolvency firm. For more information visit: www.herronfisher.co.uk   or e-mail vinance@herronfisher.co.uk  . To contact Arc Reserves, email: enquiries@arcreserves.com or visit: www.arcreserves.com'  

 

Les 5 du Vin: Vinance plc, Wine Investment Association (WIA) and Nobles Crus

Château Pichon-Longueville, Pauillac

My post this week on Les 5 du Vin covers three wine investment topics: Vinance plc – now in administration, The Wine Investment Association – to be launched on Wednesday, and the elephant in the Nobles Crus' room.