The man who led a Ponzi scheme that led to the loss of about $45 million by 4,000 wine investors is set to spend more than six years in prison.
John Fox, who ran the wine shop Premier Cru in Berkeley, California, was sentenced Wednesday by U.S. District Court Judge James Donato. He has been in custody since August, when he admitted to committing wire fraud.
“I wish I could go back in time and undo the damage that I’ve caused, but I can’t,” told the court in San Francisco, according to a report in the East Bay Times.
Premier Cru sold “wine futures,” which it marketed as discounted sales of expensive vintages to be purchased after grapes were harvested.
However, Fox embezzled at least $5 million from company and related accounts. He then spent the money on sports cars, credit cards, a golf club membership and the like.
He admitted to selling about $20 million of “phantom wine” between 2010 and 2015, according to his plea deal.
Earlier this year, Premier Cru said it owed clients over $70 million but had only $7 million in assets. Fox also field for personal bankruptcy.
Still, he agreed to pay about $45 million in restitution to clients and $6.5 million to lenders, according to court documents obtained by the newspaper. Fox said in court that he plans to study computer science in prison, so he can go into business and finance these payments.
This summer, the U.S. Attorney’s Office charged Fox for receiving about $100,300 via a bank transfer from Hong Kong through the Ponzi scheme he had established.
He helped start Premier Cru in 1980.
While Fox spent money on a lavish lifestyle, he also used embezzled funds to pay for his daughter’s education. However, the East Bay Times, citing prosecutors, reported that he also spent about $1 million on “younger women.”
One woman attempted to get $200,000 from Fox by blackmailing him. The individual, Seul Ki Yum of Seattle, is facing charges for the alleged blackmailing in a state court in Washington.
Attorney Raphael Cung, representing an investor who lost about $670,000, told the Chronicle that most victims will get little back from the scheme. “His faith in doing business in this country has been shaken,” Cung said of his client, according to the newspaper.