A Drinks Distributor Was Convicted of Defrauding Investors Based on a Wine Product's Appearance 'Shark Tank'
Prepacked wine-by-the-glass didn’t land a deal with the sharks, but it did land one entrepreneur a two-year prison sentence and $1.8 million in restitution payments.
Copa di Vino—America’s “leading producer” of wine prepackaged in individual glasses—was featured on the show Shark Tank on two separate occasions, with owner James Martin unwilling to lock in a deal both times. However, one of the wine’s distributors took that fame and ran with it—using the single-serve wine’s reality show cred to secure his own investors and bilk them out over half a million dollars, accord to the Department of Justice. Now, he’s been sentenced to two years in prison.
In 2012, Joseph Falcone launched the wine and liquor distributor 3G’s Vino in New York, where, among other products, he apparently took a particular liking to Copa di Vino and its high-profile TV appearance. The DoJ explains that, armed with that sales angle, in September 2014, Falcone began finding investors for 3G’s Vino—but approximately $527,064 was never used to sell the glasses of wine with a built-in freshness seal. Instead, the feds say he spent that money on himself—paying off the mortgage on a home in Florida and trading securities online.
On Friday, U.S. District Judge Sandra J. Feuerstein sentenced Falcone—who pleaded guilty last year—to 24 months in prison for wire fraud and ordered him to pay $1.8 million in restitution to seven investors.
“Falcone’s victims were reeled in by his ‘Shark Tank’ pitch, but with [this] sentence, the defendant is now squarely on the hook for his crimes,” Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York, said in a statement. “This Office remains committed to prosecuting those who mislead the public and abuse the trust placed in them to engage in fraud against their own investors.”
According to a sentencing memorandum obtained by CNN, Falcone penned an apology to the court, explaining his actions. “I took investors’ money for the purpose of investing it into a start up wine business. Then, I wound up co-mingling funds with personal funds, and using some of the investors’ money for my own ends. As the business grew, so did the expenses, and I wound up not being able to pay all of the investors back,” he wrote. “I was wrong to do this. For this, I am deeply sorry and fully accept responsibility.”
As for Copa di Vino, the Oregon-based wine brand isn’t even mentioned in the DoJ’s announcement, and the company itself appears not to be at all affected by this investigation. So anyone who doesn’t feel like opening a whole bottle of wine—or maybe just washing a glass—can still find these convenient 6.3-ounce wines in Pinot Grigio, Cabernet Sauvignon, Chardonnay, Moscato, Merlot, White Zinfandel, or Riesling varieties. Just maybe make sure you buy them from, uh, a reputable distributor.