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Tequila entrepreneur arrested after fabricating sales, defrauding investors
The founder of Orange County-based Tequila business, 6 Degree Tequila, has been arrested and charged with securities and wire fraud after allegedly raising nearly US$1 million from investors by lying about the company’s finances.
Joseph Cimino, 56, allegedly spent a “significant portion” of investor funds ostensibly raised for his Tequila company to finance his own lifestyle, including groceries, pet supplies, and personal entertainment.
According to a report on justice.gov, Cimino transferred roughly $472,000 of investor money to his own personal bank account, using a large proportion of that capital for personal living expenses, despite operating agreements provided to investors.
“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. Now Cimino faces the sobering reality of federal securities and wire fraud charges,” U.S. Attorney Audrey Strauss said.
FBI Assistant Director William F. Sweeney Jr. added, “Through falsely inflating capital, misleading investors, and lying about other aspects of his tequila company, Cimino, as alleged, raised nearly $1 million in furtherance of his fraudulent scheme. While his alleged illegal activity continued over a period of four years, today’s arrest has effectively shattered any hopes he may have had of continuing to scam innocent investors.”
Between 2014 and 2018, Cimino allegedly raised approximately $935,000 from at least 25 investors, ostensibly to fund his Tequila company.
During this time period, according to the report on justice.gov, Cimino made numerous misleading statements to would-be investors in a bid to attract and maintain them.
In multiple communications with prospective investors, he is said to have falsely inflated the amount of capital the Tequila company had raised from other investors and falsely claimed that certain individuals were investors in his company when in reality they were not.
Cimino is also accused of fabricating or falsely inflating the company’s sales in a number of communications with investors.
He has been charged with one count of securities fraud and one count of wire fraud. Each charge carries a maximum sentence of 20 years in prison.