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ZAFA Wines Ordered to Stop Raising Funds From Investors

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A glass of natural ZAFA wine - SALLY POLLAK/FILE ©️ SEVEN DAYS
  • Sally Pollak/File ©️ Seven Days
  • A glass of natural ZAFA wine
The State of Vermont has ordered Burlington winemaker  ZAFA Wines to stop raising money for the business.

The Department of Financial Regulation issued the order on November 20 because ZAFA Wines was seeking investors while it was operating without required licenses. Last week, the state Division of Liquor Control barred ZAFA  from the manufacture, sale and distribution of alcoholic beverages for lack of licenses.

"Simply put, Zafa has been operating without the fundamental regulatory approvals required to conduct its core business, and it has not disclosed this material risk to investors," the order states.



Krista Scruggs founded ZAFA Wines in March 2018. The company made its initial security offering in September 2019 and had raised $300,000 by September 2020, according to the state. The company has four investors, all from out of state.

“When there’s a great harm to the investing public, we have to take action," Financial Regulation Commissioner Michael Pieciak told Seven Days.

In its offering, the company “failed to disclose specifically Zafa's need for multiple liquor control and related state and federal licenses in order to legally manufacture, bottle, sell and distribute wine,” the state wrote in its order.

According to the state, the relevant material says that "'as a manufacturer of wine, the Company will be subject to extensive government regulation' but 'the Company does not expect that compliance with existing laws and regulations will have a material adverse effect upon its operating results.'"

Based on this, “a reasonable investor could assume they have the necessary licenses to operate the business they’re in,” Piecak said.

ZAFA Wines has 30 days to respond to the state’s order, Piecak said, after which the order will become permanent. Meanwhile, the state will continue its investigation.

“We’ve asked for financial documents and we haven’t received them yet,” Pieciak said. “So we don’t know what they’ve done with [the money]. That’s going to be part of our ongoing investigation.”

Scruggs could not be reached for comment on Monday afternoon.

Read the order here: