CEO stole over $4 million from company to build winery, farm and horse ranch, feds say
A German man is accused of building a boutique winery, farm and horse ranch on his private Virginia property with money stolen from his company, federal prosecutors said.
Now he’s facing up to 20 years in federal prison, according to the U.S. Attorney’s Office for the Eastern District of Virginia.
While CEO and president of an international company’s subsidiary based in the U.S., Gerhard Bauer, 73, wrote company checks for his own expenses — and stole more than $4 million between 2010 and 2017, according to federal court documents filed in Virginia.
He used nearly $1.5 million in embezzled company funds to build and own Goose Creek Farms, its horse ranch and Otium Winery, located on the property in Purcellville, a small Virginia town, a statement of facts filed in court says.
After a new owner purchased the property in February 2021, Otium Winery was “reimagined” as Otium Cellars, which offers Austrian and German wines, according to its website. The site says its winemaker’s family originally established Otium Cellars.
The winery’s new ownership came after Bauer was indicted on several charges, including mail fraud, in July 2020, court records show.
On Aug. 8, the German national pleaded guilty to a mail fraud “scheme” in connection with stealing money from his company, the U.S. Attorney’s Office announced in an Aug. 9 news release.
McClatchy News contacted attorneys David Benowitz and Rammy Barbari, of criminal defense and personal injury law firm Price Benowitz LLP, who represent Bauer, for comment on Aug. 10 and didn’t receive an immediate response.
McClatchy News also contacted Otium Cellars for comment on Aug. 10 and didn’t receive an immediate response.
Funds also used for wine bottles, tuition and debt, court docs say
According to prosecutors, Bauer created “fake invoices to justify” his personal expenses, while CEO for his company.
The company wasn’t identified by prosecutors and only described in court documents as an industrial and manufacturing business that did business within the Eastern District of Virginia.
According to the statement of facts, Bauer also used the company’s money to pay for hundreds of wine bottles for his winery in 2017.
He also used $146,416 to pay for his relative’s private school tuition at Foxcroft School, a private boarding school for girls in high school, according to prosecutors and an affidavit.
In addition to this, $357,683 was used to pay off his credit card debt, the affidavit says.
Authorities have since interviewed the company’s current president, who said the company “would not purchase any of these items or services in its ordinary course of business,” according to the affidavit.
Bauer is due in court on Nov. 7 for his sentencing hearing, prosecutors said.
The Loudoun County Sheriff’s Office helped investigate the case against him, according to the release.
Goose Creek Farms and Winery and Otium Cellars are in Loudoun County.
The farm raises and sells Hanoverians, a Warmblood horse breed of German origin, according to its website.
Purcellville is about 50 miles northwest of Washington, D.C.
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