Wine Dinner StartUp Crashes, Super-Rich Wall Street Crew Sue

By Neat Pour Staff |

Anyone who’s ever seen an episode of HBO’s Silicon Valley can tell you that world of startups and venture capital is filled with ridiculous parties, overblown valuations, and nonexistent profits. However, when New York business consultant and bon vivant Omar Khan allegedly tried to apply this model to his wine events business, a group of Wall Street heavyweights failed to see the comedy. According to the NY Post, the Manhattan DA’s Major Economic Crimes isn’t laughing either.

Last week, a group of investors filed a $8.3m suit in NY Supreme Court contending that Khan’s business is a “ponzi-like scheme” that focused on raising investment money instead of actually executing events. 

Then, matters turned criminal . The Post reports that prosecutors are now looking into the matter.

Being a bad businessman is not illegal, but fraud is. The center of the government’s concerns is a reportedly forged email from Philippe Sereys de Rothschild to Khan. Khan allegedly presented this communication to investors as “proof” of his close relationship with the Rothschild family’s fabled wine holdings. If true, the story would bolster the argument that Khan deliberately set out to deceive his backers.

In an interview with the tabloid, Khan admitted that his business suffered from shortcomings, but denied any malfeasance.

“This is because of a cash issue, which then led to people not being able to have the dinners done and their wines received. That’s terrible. We’ve addressed it, we will address it,” he said. “To call that a Ponzi scheme, that would suggest that no dinners were done, that’s absurd.”

The venture, the International Business & Wine Club, was founded in 2014 to stage small events that mixed over-the-top tasting menus and cuvées with guest speakers and ‘networking’ opportunities. (Becasue, Khan is the type of guy who was upset that discussing business at wine dinners is verboten). As of 2018, membership was listed at $5k.

Although some of these small dinners were, in fact, staged the company never generated enough profits to pay out disbursements to investors. 

One plaintiff in the suit, ex-Renaissance Technologies researcher Kresimir Penavic, lost over $5m according to the filing. The other litigants are executives at a-list finance firms like Sanford C. Bernstein, Spurs Capital, and Morgan Stanley.

Khan is insistent that there is hope for an out-of-court settlement.

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