Gerhard Bauer, 73, faces up to 20 years in federal prison after pleading guilty to a mail fraud scheme, which saw him steal from his employer.
Bauer was the CEO and president of the unnamed international company’s US subsidiary, and his activities raised suspicion.
Prosecutors said that he created fake invoices and wrote company cheques in order to steal the funds. Investigators spoke to the company’s current CEO, who said that the business ‘would not purchase any of these items or services in its ordinary course of business’.
The US Attorney’s Office revealed that Bauer used almost $1.5m in embezzled funds to build Otium Cellars and Goose Creek Farms in Purcellville, Virginia.
According to the court statement of facts, Bauer also used the company’s money to buy hundreds of bottles for his winery in 2017.
He used $357,683 to pay off his credit card debt, according to the affidavit, and he also spent $146,416 on a relative’s private school tuition at the exclusive Foxcroft School in Virginia.
The farm was set up to raise and sell Hanoverians, a horse breed of German origin. Otium Cellars was sold in 2021.
The Loudoun County Sheriff’s Office and the US Secret Service’s Washington Field Office helped with the investigation.
Bauer was arrested and charged with mail fraud. US District Judge Leonie M. Brinkema accepted his guilty plea.
He is scheduled to be sentenced in November. Bauer faces a maximum penalty of 20 years in prison, but actual sentences for federal crimes are typically less than the maximum penalties.