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North Bay Business Journal

Wednesday, April 16, 2014, 6:05 pm

Former WTN executive pleads guilty to fraud, tax charges

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    Martin Christopher Edwards, a former top executive of The Winetasting Network indicted nearly a year ago over nearly $900,000 diverted from the Napa company, has resurfaced and pleaded guilty, according to a statement from federal prosecutors Wednesday.

    Mr. Edwards, who was vice president and general manager when the luxury wine and gifts e-tailer was owned by 1-800-Flowers, pleaded guilty in a San Francisco federal courtroom Tuesday to mail fraud and tax evasion, according to a statement by U.S. Attorney Melinda Haag, FBI Special Agent in Charge David Johnson and Internal Revenue Service Special Agent in Charge José Martinez.

    He could not be located at the time of the May 30 indictment. Mr. Edwards, 49, was in custody by his first court appearance Jan. 16, when he pleaded not guilty, according to court documents. He is set to be sentenced Aug. 5 by judge William Alsup.

    Between May 2010 and December 2012, Mr. Edwards bilked $894,222 from The Winetasting Network by using his role to write checks to a fake tax-preparation firm he created, called Dufrane Compliance Trust, according to the plea agreement. One such check came by mail from 1-800-Flowers’ offices. He deposited the checks into a bank account he created for Dufrane, then used the money to buy a 2008 BMW car, go on vacations, dine out and take a cruise. He didn’t report the extra income to the IRS for 2010–2012.

    At sentencing, Mr. Edwards could face restitution, plus up to 20 years in prison and a fine up to $250,000 for the mail fraud plus up to five years and $250,000 for tax evasion.

    1-800-Flowers sold The Winetasting Network in January to St. Louis-based TSG, LLC, which plans to rebuild the company this year and relaunch the Ambrosia brand. 1-800-Flowers had been selling portions of the company for the past two years, citing slumped sales because of the economic recession. The company started in 1991 and was acquired by 1-800-Flowers in 2004.

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