The finance director of collapsed Mayfair Cellars systematically looted nearly £1m of customers’ wines, passing the money he made onto his partner, an official report says.
Dominic Smith, 43, said that the money has been spent and was not used to buy ‘assets of any real value’, the report from administrators Grant Thornton says.
These unauthorised wine sales currently total approximately £995,000. The final figure may be higher as investigations are continuing. Mayfair’s liabilities now total £1,370,000.
Smith was dismissed on 3 April following the discovery of the fraud in March. His assets were frozen and civil proceedings were started the following day for ‘breach of contract, breach of fiduciary duty and/or deceit’.
He provided Mayfair’s solicitors with details of the unauthorised payments from the company’s bank account between 1 February and 31 March 2006 as well as details of his accounts and credit cards from 1 January 2002.
Hammersmith & Fulham Police are investigating and will interview Smith once they have received all the available evidence from Grant Thornton. No charges have yet been made.
The report from Grant Thornton to Mayfair creditors notes that ‘regular sums were paid to Andrew Comer, Mr Smith’s partner, from the unauthorised sales’.
Comer says ‘he believed the money was paid to him for debt collection work’ for Mayfair. He claims to have no assets of real value.
All the looted wines were sold through Farr Vintners and Wilkinson Vintners. Smith sent ‘false invoices to Wilkinson and Farr which made it appear that Comer owned the wine being sold’.
The report notes that ‘There is currently nothing to suggest that either of these merchants were aware that the wine was being sold by Mr Smith without authorisation’.
[updated 13 July] In a recent report sent to creditors Grant Thornton have clarified the position in relation to Farr Vintners and Wilkinson Vintners. ‘Our solicitors have written to Wilkinson and Farr requesting copies of documentation relating to the unauthorised sales. Creditors should note that Wilkinson supplied all information requested to our solicitors on 25 May 2006 and have co-operated with our enquiries to date. We are still awaiting a response from Farr.’
Stephen Browett at Farr Vintners said the matter was in the hands of their solicitors and made no further comment.
The creditors’ meeting will be held in London on 20 June.
Written by Jim Budd