Tequila Company Illegally Schemed Investors Out of Nearly $1 Million in Retirement Funds and Unregistered Securities, AG Says
Despite glowing reviews, 6 Degree Tequila has been embroiled in numerous legal controversies since 2022. (Photo: 6 Degree Tequila)
A disgraced New Jersey securities broker has been fined $150,000 after he steered clients toward fraudulent investments in a New York tequila company.
Michael W. Mandel, an employee of Bergen County Brokerages, sold approximately $887,000 in unregistered ownership stakes of 6 Degree Tequila. Without informing his employer, Mandel invited clients to golf events and cocktail parties where he encouraged them to make unregulated investments in the company.
In several instances, Mandel encouraged investors to create self-directed individual retirement accounts (SDIRAs) in which money could by moved with minimal oversight. By avoiding state regulations, Mandel successfully funneled investments into a brand that was later proven to inflate numbers and misappropriate funds.
“We will not allow financial professionals to enrich themselves by circumventing the laws that provide critical protections for investors and ensure the integrity of our financial markets,” said State Attorney General Matthew Platkin.
Joseph Cimono, Founder of 6 Degree Tequila. (Photo: 6 Degree)
6 Degree Tequila — which, by all accounts, is surprisingly well-reviewed — was founded by New York’s Joseph Cimono in 2014. In 2022, Cimono was sentenced to 18 months in prison for securities and wire fraud.
In court, the U.S. Attorney’s Office alleged that Cimono falsely inflated investment and sales figures nearly tenfold. Later, an undisclosed amount of misappropriated funds were used to subsidize personal food, entertainment and living expenses. During an incident in 2017, Cimono claimed that his company would receive reimbursement for 800 cases of tequila destroyed in a Puerto Rican warehouse during Hurricane Maria — in truth, no cases were destroyed and the company was uninsured.
Following his trial, Cimono was ordered to pay out $615,000 in restitution to investors.
“In 2016, we were the best tequila in the market. But the — it just got away from me. It totally got away from me,” Cimino said in federal court on Nov 15. “I wanted to be successful, I wanted the company to be successful, and I just made statements that I shouldn’t have.”
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