A Connecticut man has been charged with defrauding investors in an alcoholic beverage company and diverting hundreds of thousands of dollars for his personal use, federal authorities announced.
Brian Hughes, 56, of Madison, is charged with seven counts of wire fraud, five counts of illegal monetary transactions, one count of money laundering, and four counts of tax evasion, officials from the U.S. attorney’s office for Connecticut, the Internal Revenue Service and the FBI said in a statement Friday.
Hughes was arrested Thursday and pleaded not guilty by video conference, authorities said. He is being held pending a Jan. 21 detention hearing.
Prosecutors say Hughes founded Handcrafted Brands LLC in 2015 for the purpose of raising money to buy Salute American Vodka, a company that claims on its website that a portion of sale proceeds benefit “organizations that support veterans and other American heroes in their pursuit of an education, career success, and the American dream.”
According to the indictment, Hughes promised investors that they would get equity shares of the company and that he wouldn’t pay himself a salary. But the indictment alleges that Hughes “misused investor funds on expenses unrelated to the purchase and development of Salute and diverted hundreds of thousands of dollars of investor funds for his personal use.” In addition, some investors were not compensated with equity shares, prosecutors said.
Prosecutors charged Hughes with tax evasion for allegedly underreporting his income from 2015 to 2018.
A message seeking comment was left with the federal public defender’s office, which is representing Hughes. A home phone number listed for Hughes was disconnected.