NEW YORK, NY.- In an elaborate Ponzi scheme that lasted nearly two years, two British men persuaded investors to put up nearly $100 million in loans to wealthy wine collectors, according to federal prosecutors.

But those collectors never existed, prosecutors said, and neither did the extensive reserves of valuable wine that the men promised would secure the loans.

Stephen Burton, one of the men who prosecutors said ran the scheme, pleaded not guilty Saturday to charges of wire fraud, wire fraud conspiracy and money laundering conspiracy in federal court in Brooklyn. Burton, 58, had been extradited to the United States from Morocco, where he was arrested last year after he was caught trying to enter the country using a fake Zimbabwean passport, according to prosecutors.

James Wellesley, 56, is accused of conspiring with Burton. He was arrested last year and remains in extradition proceedings in Britain, prosecutors said. If convicted, the defendants each face up to 20 years in prison.

John S. Wallenstein, Burton’s lawyer, said Saturday that Burton denied the charges. A lawyer for Wellesley could not be reached for comment Saturday.

Burton and Wellesley were the chief executive and chief financial officer at a company called Bordeaux Cellars, according to the indictment, which was filed in February 2022. From about June 2017 to February 2019, the indictment says, they approached investors in the United States and other countries, some of whom were New York residents, claiming their company brokered loans to high-net-worth wine collectors.

The men, who used several aliases, told investors that the loans would be backed by a vast wine inventory stored by Bordeaux Cellars that included bottles worth thousands of dollars from Domaine de la Romanée-Conti in Burgundy and Château Lafleur in Bordeaux, and that the investors would receive regular interest payments from the wine collectors, according to a criminal complaint filed in 2020.

But Bordeaux Cellars possessed thousands fewer bottles of wine than were promised, the indictment says, and the executives used lenders’ money to make interest payments to other investors and to line their own pockets.

The scheme collapsed in February 2019, when Burton and Wellesley stopped making interest payments to investors, according to the indictment.

Burton “will now taste justice for the fine wines scheme alleged in the indictment,” Breon Peace, the U.S. attorney for the Eastern District of New York, said in a statement Saturday. “This prosecution sends a message to all perpetrators of global fraud that you can run from law enforcement, but not forever.”

In another recent fraud case involving fine wines, a British man pleaded guilty to a conspiracy charge in March in U.S. District Court in Ohio. The man, Casey Alexander, admitted involvement in what prosecutors described as a scheme to defraud more than 150 people of more than $13 million in investments by promising returns on rare whiskeys and wines. Those returns never materialized, according to prosecutors.

This article originally appeared in The New York Times.