Tequila Company CEO Receives Sentence For Bilking Investors

WARWICK, NY — The founder of a Hudson Valley tequila brand who admitted he fraudulently solicited investments for his company will be going to prison.

Joseph Cimino, 58, of Warwick, was sentenced Wednesday to 18 months in prison, in connection with his scheme to get victims to invest several hundred thousand dollars into his Hudson Valley tequila business based on false information about the company's finances.

He pleaded guilty Nov. 15 to one count of securities fraud and one count of wire fraud.

Damian Willams, the United States Attorney for the Southern District of New York, said Cimino is now going to prison because he 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.

According to court documents and statements, Cimino raised about $935,000 between 2014 and 2018 from at least 25 investors based on false representations.

Prosecutors said he attracted investors by falsely inflating the amount of money he raised from prior investors and falsely claimed as investors several people who had, in actuality, not contributed any money.

Cimino also falsely inflated the sales of his company.

For example, authorities said, he claimed, in July 2017, in an investor report that sales for the year to date totaled more than 3,400 cases of tequila, when the actual sales totaled only 350 cases.

Also, in October 2017, Cimino falsely claimed year-to-date sales of more than 6,000 cases, which in reality was about five times the actual total.

He also used Hurricane Maria as an excuse, authorities said, claiming he would receive reimbursement for 800 cases of tequila supposedly destroyed at a Puerto Rican warehouse in the 2017 storm. No inventory was destroyed in the hurricane, and the company didn't have insurance, prosecutors said.

Cimino also misused a substantial portion of investor money that was intended to fund the operations of his tequila business for personal expenses. Authorities said, from 2014 to 2018, he transferred about $472,000 of investor money to his personal bank account to pay for his food, entertainment and other living expenses.