The owner of a tequila company in the Hudson Valley was arrested following a lengthy investigation by the FBI.
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Damian Williams, the United States Attorney for the Southern District of New York, announced Joseph Cimino of Warick, the founder of a tequila brand based in the Hudson Valley, pleaded guilty today to securities and wire fraud charges.
Cimino admitted as part of his plea that he fraudulently solicited investments for his company.
“As he admitted in court today, Joseph Cimino lied about his tequila business’s finances to lure investors and then diverted investor funds in order to line his own pockets. Now Cimino awaits sentencing for his fraudulent conduct," U.S. Attorney Damian Williams stated.
According to court documents and statements in court:
From in or about 2014 to 2018, Cimino raised approximately $935,000 from at least 25 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.
Cimino also misused a substantial portion of investor money that was intended to fund the operations of his tequila business for personal expenses.
The 57-year-old from Warwick pleaded guilty to one count of securities fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.
He's scheduled to be sentenced in early 2022.
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