A BUSINESSMAN who persuaded 2000 investors to part with almost (pounds) 4m after he convinced them that they could make a fortune out of bulk-buying whisky and champagne was found guilty yesterday of three charges of fraudulent trading.

Stephen Jupe faces being jailed for up to 10 years after he was also found guilty of trading while insolvent in a trial lasting 10 weeks.

Southwark Crown Court in London was told that Jupe, 50, from Kingston, Surrey, embarked on a nationwide marketing campaign during the mid-1990s - using fliers mainly in the lifestyle magazines of Sunday newspapers - to dupe customers into paying inflated prices for casks of single malt whisky and champagne.

He traded under the company name of Marshall Wineries, based in Wandsworth, south-west London, and told investors they could expect ''exceptional capital growth potential with very few risks'' for his Grandtully Single Malt label.

He named his whisky supplier Grandtully Distilleries and said its head office was based at the Belgrave Business Centre in Frederick Street, Edinburgh.

However, the office was a brass plate address serviced by a mail forwarding agency and an answering machine.

The whisky was actually produced by Speyside Distillery in the north of Scotland, which has a head office in Glasgow. It unwittingly sold huge quantities of whisky to Jupe and was not aware of the deception.

Buyers were told their casks would be held in a bonded store and could be sold after three years of maturing back to Grandtully Distillery or to the industry on the open market.

However, when they tried to cash in on their investment, customers found their whisky was only worth a fraction of what they had paid for it.

Jupe was released on conditional bail for sentencing on May 21. Following the conviction, the Serious Fraud Office said it was considering confiscation proceedings against Jupe in an attempt to claw back the money he took from investors.

No-one from Speyside Distillery was available for comment yesterday.

A spokesman for the Scotch Whisky Association said yesterday it was ''delighted'' by the court's decision.