THREE Scotch whisky companies are under investigation over fraud allegations, according to reports.
According to the BBC, hundreds have been tricked into investing savings and pensions into whisky casks which were overpriced, oversold, or did not exist.
The victims include one woman with terminal cancer who invested £76,000 and another woman who spent more than £100,000 on casks which experts estimate are worth only a fraction of the price they were sold for.
The industry of cask investment has grown in popularity over several years, with no central authority regulating or tracking the ownership of casks. Individuals can buy a cask of whisky when it is first produced and hope it rises in value as the spirit ages.
It takes three years and a day for spirit to become Scotch whisky in a cask, so individuals are encouraged to keep barrels for at least 10 years to maximise returns.
Alison Cocks, from Montrose, invested £103,000 in a company called Cask Whisky Ltd, run by a man called Craig Arch.
She initially bought a single whisky cask for £3000, and was given documents to support her portfolio.
However, when she decided to sell, "suddenly they didn't want to talk to me anymore". After taking a closer look at the investments, she could not find her casks.
Cocks was also told by independent whisky valuers that she paid five times what her barrels were actually worth. One had also been bought by another person.
A cask which cost her £49,500 does not exist, the BBC reported.
The man calling himself Craig Arch has been revealed to be Craig Brooks, a disqualified company director and convicted fraudster.
In 2019, Brooks and his brother were jailed for a £6.2 million fraud, where 350 victims were cold-called and convinced to invest in carbon credits.
The City of London Police Serious and Organised Crime team is now investigating Brooks' whisky company, as well as another he runs - Cask Spirits Global Ltd, under the false name of Craig Hutchins.
Another company, called Whisky Scotland, is also under investigation.
The company promised NHS worker Jay Evans, who was diagnosed with terminal cancer in 2021, to invest almost £76,000 in seven casks.
Evans, 54, sold her home and moved to Peacehaven in East Sussex, then used the money from the sale to invest. The company's director sent her voicemails, telling her she was his "favourite ever client" and that he would "always look after her".
Two of the casks do not exist, and the other five have been sold at a much higher cost than their true worth.
Martin Armstrong runs Whisky Broker, a bonded warehouse in Creetown, which stores 48,000 casks.
He told the BBC that he is being contacted "almost every day" by investors looking for casks which do not exist.
Asked if he thought that fraud could ever be so rife in the sector, he said: "No. But I knew it was possible. When there's money involved, then everything follows."
