Fraudsters raking in millions conning people into investing in rare Scots whiskies which don’t exist

Fraudsters are making millions by conning people into investing in rare whiskies which don’t exist or have already been bought by someone else.

Experts have warned the rise in whisky cask investment schemes are ripe for exploitation by con artists and the fraudulent market now worth more than £150million.

They’ve said no authority is taking control of the flourishing industry, which is also being used by criminal gangs to launder money.

Young people are being targeted online with Instagram adverts claiming guaranteed returns in an effort to get them to part with their cash.

As whisky matures over time it can become more valuable, meaning a barrel bought for £1000 today could be worth much more in
20 years’ time.

Vicky Bruce, owner of whisky verification firm Casknet, has produced a report into the scale of fraud across the industry and said the trend will damage the vital Scottish sector.

She said: “In some cases, people have invested millions of pounds into whisky that doesn’t exist or they have never seen.”

According to Vicky’s research, firms and individual brokers are using a range of methods to trick people into investing, including selling counterfeit casks which don’t contain the whisky the sellers claim, selling casks that don’t exist and selling the same cask to multiple people.

She added: “The confusion is that because casks are being sold as investment opportunities, it does not make them a financially-regulated product and the people who are offering these investments are also not regulated by the Financial Conduct Authority.”

In November, the City of London Police issued a statement warning people of the dangers of whisky investments after one firm was found to be falsely advertising on social media.

Blackford Casks Ltd, trading as Whisky Investment partners, told buyers they would get returns of between eight and 12 per cent on their investment.

The Advertising Standards Agency ruled the ads were “irresponsible” but Blackford Casks was not found to have committed fraud.

Whisky broker Blair Bowman said the extent of the damage to the whisky industry is still to be seen.

He said: “Unfortunately, the sector has attracted a lot of bad actors including people with backgrounds in previous scams around fine art and wine.

“My worry is the damage that will be done to the whisky industry as a result of this. It won’t be until naive investors realise in five or 10 years, when they want to see the return on their investment, that they can’t get in touch with these companies – the website is dead, the emails are dead, it will be a real mess.”

Don’t miss the latest news from around Scotland and beyond. Sign up to our daily newsletter here.