Wine Merchant Jailed for Fraud

(Wine-Searcher) - The former director of a French wine merchant has been sentenced to 30 months in prison for fraud and doctoring the company’s accounts.

Jean-Luc Cabaner once managed the largest Vin Doux Naturel distributor in the Roussillon region, Socodivin. It filed for bankruptcy in 2006, owing 7.5 million euros ($10.3m) to its creditors, including more than 100 local grape growers and wine producers.

Cabaner was sentenced this week for falsifying company accounts in order to make it seem that the company was in good financial health. He aimed to deliberately mislead his suppliers so that they would continue to provide grapes and wines despite not having been paid for previous orders, the court heard.

In both 2003 and 2004, an auditor refused to certify the company’s accounts, citing irregularities including discrepancies over stock and unpaid bills.

The company found itself in difficulty in 2005, failing to pay its suppliers. The “climate is very difficult” claimed Cabaner at the time but he continued to order stock.

In the final days of 2005, he purchased 774 hectoliters of wine but three weeks later, filed for bankruptcy with more than $10m of debt.

The scam took place over an eight-year period and it that appears local producers had their suspicions that things were amiss much earlier. Hervé Passama, president of the Vignerons Independents, told local newspaper L’Independant: “Back in 1997 we smelled a rat and demonstrated in the streets of Perpignan to ask the state to control the actions of Socodivin. Nothing was done at that time. Bottom line, winemakers will never recover the money lost.

The Perpignan court awarded 5,000 euros ($6,860) to the case's 32 plaintiffs for non-pecuniary damages but compensation for financial losses has not yet been determined.