Owner of Orange County Tequila Company Heads To Prison
The owner of a tequila company in the Hudson Valley was arrested following a lengthy investigation by the FBI.
Damian Williams, the United States Attorney for the Southern District of New York, recently announced Joseph Cimino of Warick, the founder of a tequila brand based in the Hudson Valley, was sentenced after he pleaded guilty to securities and wire fraud charges in connection with his misrepresentations to investors and misappropriation of investor funds.
Orange County, New York Tequila Entrepreneur Sentenced To Prison For Securities Fraud
Cimino, 58, was sentenced to 18 months in prison, in connection with his scheme to induce victims to invest several hundred thousand dollars into his Hudson Valley tequila business based on false information about the company’s finances.
“Cimino doctored documents and provided phony information to dupe investors into handing over hundreds of thousands of dollars that he used in part to line his own pockets. Now Cimino has been sentenced for his crimes," U.S. Attorney Damian Williams said.
Owner of Hudson Valley, New York Tequila Company Sentenced
According to court documents and statements in court provided by the Department of Justice:
From, 2016 to 2018, Cimino raised approximately $615,000 from approximately 16 investors based on fraudulent representations for his Orange County-based company.
"To attract investors, Cimino falsely inflated the amount of capital that he had raised from prior investors," and falsely described as investors several individuals who, in fact, had not contributed any funds.
Cimino also falsely inflated his company’s sales. For example, in July 2017, he claimed in an investor report that year-to-date sales totaled 3,410 cases of tequila when the actual sales totaled only 350 cases.
Similarly, in October 2017, Cimino falsely claimed that year-to-date sales totaled 6,035 cases, which was approximately five times the actual total. He further claimed in October 2017 that his company would receive reimbursement for 800 cases of tequila supposedly destroyed at a Puerto Rican warehouse as a result of Hurricane Maria. In reality, no inventory was destroyed in the hurricane, and the company lacked insurance.
He also used a substantial portion of investor money that was supposed to pay for the operations of his Orange County tequila business for personal expenses. For example, he transferred investor money to his personal bank account in order to subsidize his food, entertainment, and other living expenses.
Along with his 18-month prison sentence, the 58-year-old from Warwick, New York was sentenced to three years of supervised release. Cimino was also ordered to pay restitution to his victims in the amount of $615,000.02 and to forfeit $159,258.23 in fraud proceeds.
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