Gardaí urge potential ‘whiskey fraud' victims to come forward over investment scams
An Garda Síochána
have urged potential victims of so-called 'whiskey fraud' to come forward and warn that the practice can help fund organised crime.
In recent years, there has been a significant increase in investment scams overseas involving the spirit, including Irish whiskey. The scams can involved customers being sold casks of rare whiskey which they are told will significantly increase in value over the years.
In some cases, investors are sold casks at vastly inflated prices. In others, the casks do not exist at all. Another tactic is to sell the same cask to multiple investors.
The scams are carried out by companies which appear to be legitimate. The casks are often stored in warehouses in remote locations with customers only finding out they have been defrauded when the companies close down.
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The trend has been the subject of recent investigations by the New York Times and the BBC, with the former reporting investors in Britain and Ireland have been sold casks 'that turn out to be untraceable or non-existent'.
London police are investigating three companies for suspected whiskey fraud based in the capital.
While some of the scams involve Irish whiskey, gardaí said, to date, 'no significant instances of whiskey fraud have been identified in this jurisdiction'.
It said, however, officers from the Garda National Economic Crime Bureau are aware of cases in other jurisdictions.
It urged anyone with information about whiskey fraud, including anyone who has fallen victim to a scam, to contact their local Garda station.
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'Whiskey fraud and associated crimes not only erode consumer trust but also present serious health risks and can contribute to the activities of organised crime,' a spokeswoman said.
'Reporting such offences to An Garda Síochána is essential to ensuring thorough investigations, protecting the integrity of the industry and ensuring public safety.'
Investment schemes involving newly distilled or maturing whiskey 'are a legitimate revenue scheme for whiskey distilleries,' said Eoin Ó Catháin, director of the
Irish Whiskey Association
trade group.
'Some Irish whiskey distilleries avail of this opportunity – this can be rewarding to the purchaser as it enables them to be able to create a unique Irish whiskey of their own, or invest in a brand of their choice.'
He warned, however, it is vital for investors to 'carry out due diligence and take appropriate advice before investing.
'Investors should recognise there are risks involved in these schemes as there are with any investment, both as regards the potential value of this investment and opportunities to sell on.'
Mr Ó Catháin said the association is currently developing guidelines for the industry, which will 'allow for potential investors to be able to make informed decisions on cask investment proposals.'
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