Tequila Company CEO Accused Of Securities, Wire Fraud

WARWICK, NY — The founder of an Orange County-based tequila company was accused Wednesday of securities and wire fraud.

Audrey Strauss, the United States Attorney for the Southern District of New York, said Joseph Cimino, 56, of Warwick, was charged with one count of securities fraud and one count of wire fraud in relation to his fraudulent solicitation of investments for his company.

"Joseph Cimino allegedly raised nearly $1 million in investor funds for his start-up tequila company by lying about the company's finances, and then spent a significant portion of that money to finance his own lifestyle," she said. "Now Cimino faces the sobering reality of federal securities and wire fraud charges."

Cimino founded BlueSky Spirits LLC/6 Degree Tequila LLC in 2015, according to his LinkedIn account.

Federal prosecutors said, from 2014 to 2018, he raised about $935,000 from at least 25 investors ostensibly to fund a tequila company that he founded.

Throughout the period, Cimino made numerous false and misleading representations in an effort to attract and maintain investors, officials said.

In multiple communications with prospective investors, he falsely inflated the amount of capital that his liquor company had raised from other investors, when in reality they had not invested any funds.

Prosecutors said he also made up or inflated the company's sales when, in fact, the company's initial sales didn't occur until 2017.

Cimino said, according to authorities, that the company's 2017 year-to-date sales totaled 3,410 cases when it was actually only 350.

He also lied to investors that the company would be reimbursed for 800 cases of tequila that were destroyed in a Puerto Rico warehouse as a result of Hurricane Maria, prosecutors said, when in reality the company had no insurance and none of its inventory had been destroyed.

Authorities also said Cimino used investor money for personal expenses, such as groceries, pet supplies and personal entertainment.

From 2014 to 2018, he transferred about $472,000 of investor money from the company into his personal bank account and used a significant portion of those funds for personal living expenses, contrary to the operating agreements provided to investors.

Each charge carries a maximum sentence of 20 years in prison, according to federal officials.

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