OAKLAND, Calif. (CN) — A bankrupt Bay Area man pleaded guilty to wire fraud Thursday, admitting he ran a $45 million Ponzi scam by selling “phantom wine” he’d never bought — and spent $900,000 of it on women he met online.
John E. Fox, 66, of Concord, was charged with wire fraud in June. He opened his Premier Cru store in 1980 and moved it to University Avenue in Berkeley, where he sold bottles and so-called “wine futures.”
He took money for futures and promised he’d deliver the European wines within 6 months to 2 years. But in his plea agreement, he admitted he sold ‘approximately $20 million worth of phantom wine that he had never actually purchased prior to entering them onto Premier Cru’s inventory,” the U.S. Attorney’s Office said in announcing the plea deal.
He embezzled money from his business and used new money to pay off old debts.
“Fox used the embezzled funds to pay for personal credit cards, memberships to private golf clubs, the purchase or lease of expensive cars including Corvettes, Ferraris, a Maserati, and various Mercedes-Benzes, and a variety of additional personal expenses, including more than $900,000 on women he met online,” the U.S. attorney said in the statement.
When he filed for bankruptcy, he admitted his customers had paid at least $45 million for wine he never delivered. He faces up to 20 years in prison and a fine of twice his ill-gotten gains at his Dec. 14 sentencing.
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