2022-05-18 DOJ SDNY press_release 116 KB 3,849 chars

Tequila Entrepreneur Sentenced To Prison For Securities Fraud

Caption: United States v. Joseph Cimino, et al.

summary

Joseph Cimino, a tequila entrepreneur, was sentenced to 18 months in prison for securities and wire fraud after deceiving 16 investors into contributing $615,000 by fabricating sales figures, inventing hurricane-related losses, and misappropriating funds for personal expenses, and was ordered to pay $615,000.02 in restitution and forfeit $159,258.23.

paragraph

Joseph Cimino pled guilty to securities and wire fraud for misleading 16 investors into contributing approximately $615,000 to his Hudson Valley tequila business through falsified financial documents and inflated sales reports. He falsely claimed year-to-date sales of over 6,000 cases when actual sales were under 700, fabricated a $200,000 insurance claim for hurricane-damaged inventory that never existed, and diverted investor funds to pay for personal living expenses in violation of the company’s operating agreement. Cimino was sentenced to 18 months in prison, three years of supervised release, ordered to pay $615,000.02 in restitution, and forfeit $159,258.23 in fraud proceeds.

narrative

Joseph Cimino, a 58-year-old tequila entrepreneur from Warwick, New York, was sentenced to 18 months in prison for securities and wire fraud after orchestrating a multi-year scheme to defraud 16 investors of approximately $615,000. Between 2016 and 2018, he fabricated financial records, inflated sales figures by up to fivefold—claiming 6,035 cases sold in October 2017 when actual sales were under 1,200—and forged investor lists to include non-contributors. He also falsely asserted that 800 cases of tequila were destroyed in Hurricane Maria and entitled to $200,000 in insurance reimbursement, despite no such loss occurring and the company lacking coverage. Cimino systematically misappropriated investor funds for personal use, including food, entertainment, and living expenses, directly violating the company’s operating agreement. He pleaded guilty to the charges in federal court, where U.S. District Judge Vincent L. Briccetti imposed the sentence. In addition to prison time, Cimino was ordered to pay $615,000.02 in restitution to his victims and forfeit $159,258.23 in fraud proceeds, along with three years of supervised release. The case was investigated by the FBI with assistance from the SEC and prosecuted by the U.S. Attorney’s Office for the Southern District of New York.

Enriched metadata

Scheme: corporate-fraud (95%)
Court: Southern District of New York
Outcome: pleaded
Restitution: $615,000
Victim loss: $615,000
Victims: 16

Classified corporate-fraud(confidence 95%). EDGAR detection: forms 10-K/10-Q/8-K· recall 56% / precision 8%. detection rule →

Extracted insights

Dollar amounts 3

$615K $615,000 $100K–$1M
$615K $615,000 $100K–$1M
$159K $159,258 $100K–$1M

Entities 4

scheme_term for securities fraud
person joseph cimino
agency of the federal bureau of investigation
scheme_term securities fraud and wire fraud

Triples 17

Joseph Cimino Sentenced To Prison For Securities Fraud
Joseph Cimino Induce Victims To Invest Several Hundred Thousand Dollars Into His Hudson Valley Tequila Business
Joseph Cimino Pled Guilty To Committing Securities Fraud And Wire Fraud
U.S. District Judge Vincent L. Briccetti Imposed Today’s Sentence In White Plains Federal Court
Joseph Cimino Doctored Documents And Provided Phony Information To Dupe Investors Into Handing Over Hundreds Of Thousands Of Dollars
Joseph Cimino Falsely Inflated The Amount Of Capital That He Had Raised From Prior Investors
Joseph Cimino Fraudulently Altered An Investor List To Include Several Individuals Who Had Not Contributed Any Funds
Joseph Cimino Falsely Inflated His Company’s Sales In July 2017, Year-To-Date Sales Totaled 3,410 Cases Of Tequila
Joseph Cimino Falsely Claimed That Year-To-Date Sales Totaled 6,035 Cases In October 2017
Joseph Cimino Claimed That His Company Would Receive Reimbursement For 800 Cases Of Tequila Supposedly Destroyed At A Puerto Rican Warehouse As A Result Of Hurricane Maria
Joseph Cimino Misused A Substantial Portion Of Investor Money Intended To Fund The Operations Of His Tequila Business For Personal Expenses
Joseph Cimino Transferred Investor Money To His Personal Bank Account To Subsidize His Food, Entertainment, And Other Living Expenses
Joseph Cimino Was Sentenced To Three Years Of Supervised Release In Addition To The Prison Term
Joseph Cimino Was Ordered To Pay Restitution To His Victims In The Amount Of $615,000.02
Joseph Cimino Was Ordered To Forfeit $159,258.23 In Fraud Proceeds
Ms. Williams Praised The Investigative Work Of The Federal Bureau Of Investigation
Ms. Williams Thanked The U.S. Securities And Exchange Commission For Its Assistance

View original DOJ press releasejustice.gov

Extracted body text (3,849c)

Press Release Tequila Entrepreneur Sentenced To Prison For Securities Fraud Wednesday, May 18, 2022 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSEPH CIMINO was sentenced today 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 previously pled guilty to committing securities fraud and wire fraud in connection with his misrepresentations to investors and misappropriation of investor funds. U.S. District Judge Vincent L. Briccetti imposed today’s sentence in White Plains federal court. U.S. Attorney Damian Williams said: “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.” According to statements in the Complaint, Information, and other filings and statements at public court proceedings in the case: In or about 2016 to 2018, CIMINO raised approximately $615,000 from approximately 16 investors. To attract investors, CIMINO falsely inflated the amount of capital that he had raised from prior investors, and fraudulently altered an investor list to include several individuals who, in fact, had not contributed any funds. CIMINO also falsely inflated his company’s sales. For example, in July 2017, CIMINO 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. CIMINO 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, contrary to the company’s operating agreement. For example, CIMINO transferred investor money to his personal bank account in order to subsidize his food, entertainment, and other living expenses. * * * In addition to the prison term, CIMINO, 58, of Warwich, New York, was sentenced to three years of supervised release. CIMINO was further ordered to pay restitution to his victims in the amount of $615,000.02 and to forfeit $159,258.23 in fraud proceeds. Ms. Williams praised the investigative work of the Federal Bureau of Investigation and thanked the U.S. Securities and Exchange Commission for its assistance. This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Benjamin Gianforti and Daniel Loss are in charge of the prosecution. Contact Nicholas Biase Victoria Bosah (212) 637-2600 Updated May 18, 2022 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 22-166

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