Just in case nobody knew:
The continuing investigation by Wine Investment News indicates that Araldica does not seem to have had a license to sell wine legally during most of the company's existence, may not currently have such a license, and further that company President Frank J. Landi, Sr., was convicted of fraud in 1983 in connection with a company called Com/Link and served almost five years in Federal prison. The New York State Division of Alcoholic Beverage Control, (ABC) said on August 13 that they have no record of Araldica having the appropriate license to sell wine until March 4, 1998 when the liquor license of Staten-Island-based All Brands Discount Wines & Liquors was transferred to it. In New York state, this license permits the retail sale of wine and distilled spirits. The lack of a license would mean that either Araldica did not sell any wine from its founding in 1993 until March 4, 1998, as it has claimed, or has done so without the proper licenses, which would be illegal. The company's public statements have asserted since at least mid-1997 that it "is a public company engaged (since 1993) in the importation, sale and distribution of premium Italian wines, olive oils and specialty foods." The current liquor license, according to the ABC, is located at the Staten Island address of All Brands and is in the name of Louis DeSantis, Araldica's Executive Vice President. But in July, when DeSantis was President of Araldica, he told WIN that All-Brands was no longer being acquired because New York state liquor laws made it illegal for the same company to own both a winery and to have a retail license to sell wine and liquor. If this is true, then it would mean that Araldica could not sell wine legally. It would also mean that the company either cannot acquire the Azienda Agricola Antogianni Winery in Italy as it claims to have done in its news releases or must give up its license to sell wine. Further, the ABC said the license which Araldica holds is only for the premises of the former All Brands address, 3263 Richmond Ave., Staten Island, NY. The telephone to that premise has been disconnected. Four Richmond Avenue businesses including one immediately adjacent to it told WIN on August 14 that All Brands has been closed for several months, the stock of goods in the store has been sold and that the entry had been padlocked by the building's landlord. The landlord, Long Island-based Kimco Realty Corp. did not return phone calls. The New York ABC said that Araldica cannot legally sell wine from any other location but the address on Richmond Avenue without obtaining ABC permission. An ABC spokeswoman said they have no record of such permission being requested.
Landi's Criminal Record Confirmed The announcement on August 7 that company founder Landi had been re-appointed President and CEO of the company, replacing DeSantis who assumed Landi's previous position as Executive Vice President (and remains as a board member) came as a surprise to many investors. But it is an even deeper surprise when viewed in the context of Landi's Nov. 21, 1997 resignation memo to the board. In that memo, Landi states that he was resigning because of "my old personal problem" which he says would not allow him "to be part of management at the time that SLA [State Liquor Authority] and ABC liquor licenses were granted." Since Landi is the founder of Araldica and has been part of its management since its formation, this seems to further confirm that Araldica may have lacked the necessary license to sell wine before this time. In addition, the New York ABC said that except in rare instances, people convicted of felonies cannot manage or own companies with liquor licenses. Indeed Landi was sentenced to eight years in federal prison on June 2, 1983 after being convicted of 13 counts of mail and wire fraud in connection with a company called Com/Link International Corp. of New Rochelle, N.Y. , the same city in which Araldica is located. According to records in U.S. District Court for the Southern District of New York, Landi, as founder, President and CEO of Com/Link defrauded "a total of approximately $2,860,600 from several hundred public investors" in connection with a cordless phone scheme. These court documents say that Landi and his two co-defendants, Edward Talbot and Oliver C. Christensen, offered a "Buy/Sell Program" involving cordless telephones which Com/Link widely promoted to the investing public "In general, investors in the Buy-Sell Program made payment to Com/Link allegedly for the purpose of inventory, i.e., cordless telephones at a stipulated price." Said the court records. "Com/Link, in exchange for the investor's money, promised to buy back the cordless telephones at a set date in the future at the price the investor had paid plus 40% annual interest." To increase investor comfort levels, the court documents say that "Investors were falsely and fraudulently informed that their investment was sound because: (a) Com/Link's performance was guaranteed by a bonding company and, (b) the cordless telephones which they had allegedly purchased were being stored for them in Com/Link's warehouse." The "bonding" allegedly came through a sham company in Belize owned by Christensen. In addition, the court records indicate that "Com/Link never had sufficient inventory to cover the sales to the investors." As a result, when Com/Link ceased doing business in 1979 the investors received neither the cordless telephones they had allegedly purchased nor the return of their assets. In addition to the criminal convictions, Com/Link came to the attention of the Securities and Exchange Commission which determined that the Com/Link scheme actually involved the sale of unregistered securities. SEC litigation release 9916 said that Landi and his co-defendants "falsely represented to investors, among other things, that Com/Link had obtained $1,000,000 in loans, the proceeds from which had been pledged to collateralize Com/Link's obligations to the public investors?when Com/Link ceased doing business in late 1979, investors received neither the telephones nor the return of their investment." Legal action by the SEC resulted in a permanent injunction against both Com/Link and Landi enjoining them from violating the registration and antifraud provisions of the federal securities laws. According to the SEC, Landi consented to the injunction without admitting or denying the charges. Further action by the SEC forced Com/Link into Chapter 7 bankruptcy (liquidation). The Federal Bureau of Prisons said that four years later, on January 20, 1984, Landi was incarcerated at the Federal Correctional Institute in Danbury, Conn. He was paroled on November 11, 1988. Landi still maintains his innocence. In his Nov. 21, 1997 resignation letter, he told his board of directors: "[T]he fact is that I did not commit the crime and still did the time." |
