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.
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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.