WHITE PLAINS – A Warwick man, who founded The Tequila Company, an Orange County-based start-up company, has been arrested by federal authorities on charges of securities fraud and wire fraud arising out of his fraudulent solicitation of investments for the company. Each charge carries a maximum sentence of 20 years in prison.
It is alleged that from 2014 to 2018, Joseph Cimino, 56, raised approximately $935,000 from at least 25 investors ostensibly to fund his tequila company.
He allegedly made several false and misleading representations in an effort to attract and maintain investors. He falsely inflated the amount of capital he had raised from other investors, and falsely represented that certain individuals were investors in the company, when in reality they had not invested any funds. He also fabricated or falsely inflated the company’s sales in a number of investor communications.
In December 2015, Cimino made statements in an email to a prospective investor falsely implying The tequila Company already had sales, when in fact, the company’s initial sales did not occur until 2017.
In a profit and loss statement in July 2017, he said year-to-date sales totaled 3,410 cases when in fact sales only totaled 350 case. In October of that year, he said sales totaled 6,035 cases, when the actual year-to-date sales totaled barely 20 percent of that.
Also, in October 2017, he allegedly told investors the company would receive reimbursement for 800 cases of tequila that were supposedly destroyed at a distributor’s warehouse in Puerto Rico as a result of Hurricane Maria. That statement was fabricated as he had no insurance and none of his inventory had been destroyed in the hurricane.
In addition to deceiving investors, Cimino used their money for personal expenses including groceries, pet supplies, and personal entertainment. From 2014 to 2018, he transferred some $472,000 of investor money from The Tequila Company into his personal bank account and used a significant portion of that for personal living expenses contrary to the operating agreements provided to investors.
