Investors losing millions of dollars, bar staff taking cash from the till just to get paid and a former cricketer dropping out of a high-profile marketing deal — the final years of the Nant Whisky investment scheme were a wild ride.

Key points: Investors were told they were buying barrels of whisky that Nant would buy back at maturity with a generous return on investment

Investors were told they were buying barrels of whisky that Nant would buy back at maturity with a generous return on investment Hundreds of barrels were never filled, and many more were missing, had been secretly decanted, or had been filled with low-volume alcohol

Hundreds of barrels were never filled, and many more were missing, had been secretly decanted, or had been filled with low-volume alcohol Insiders say there was 'creative' accounting and other warning signs

Once a darling of Australia's boutique spirits scene, the whisky label is now a cautionary tale for investors.

As police in Tasmania begin a criminal investigation into the failed investment scheme, the ABC's Background Briefing program can reveal new details about how it all went sour.

A $14,000 barrel of whisky

Almost 900 investors purchased barrels of whisky after production began at Nant's distillery north of Hobart in 2008.

The barrels cost up to $14,000 each and would be stored in a bonded warehouse on the property until the whisky had matured — a process that was expected to take four years, according to the Nant investment offer.

Nant promised to then buy back the barrels, rewarding investors for their patience with a generous return of 9.55 per cent each year. Sorry, this audio has expired Listen to the investigation

The scheme was designed to help Nant cover upfront expenses until the operation was profitable.

But for hundreds of the investors, both here in Australia and overseas, their long-awaited payday never materialised.

Nant's founder, Keith Batt, a bankrupt former property developer from Brisbane, has maintained a low profile ever since.

Background Briefing found him living in a $1.4 million home with river views in the affluent Brisbane suburb of Hamilton. The property was purchased in 2013 using a business registered in his wife Margaret's name.

Mr Batt declined to be interviewed and never responded to a comprehensive list of questions delivered to his door.

'This is it. We've lost all our money'

Jo McCarter and her family lost over $100,000 investing in Nant Whisky. ( ABC RN: David Lewis )

During a holiday in Tasmania in 2012 Jo McCarter and her husband toured the Nant distillery. They were impressed with what they saw.

After returning to Brisbane, the couple accepted an offer to buy two barrels of whisky for $11,000 and get one free.

"Interest rates in banks had been pretty ordinary for the last few years, so I just liked the idea that we were getting a bit more bang for our buck," said Ms McCarter.

"Probably a little bit too much bang, in hindsight."

The McCarters received a complimentary bottle of Nant whisky in the mail, certificates of ownership for their barrels and a signed letter from Mr Batt welcoming them to the fold.

"It all sounded quite flash, a bit posh — something we weren't used to," she said.

When her mother died, Ms McCarter decided to invest her son and daughter's inheritance in an attempt to grow their wealth.

She purchased multiple barrels for her children and a few extra for herself and her husband, increasing the family's collection to 10 barrels, worth a combined $116,000.

"If we had realised our investment, if we had got back what we expected to get back, it would have been in the vicinity of $170,000," she said.

A single bottle of Nant Whisky can sell for hundreds of dollars. ( ABC RN: David Lewis )

But to this day, the McCarters have not received a cent.

Late last year, after reading media reports suggesting Nant was struggling financially, the couple made several attempts to contact sales representatives over the phone to enquire about their investment but were unsuccessful.

Then Ms McCarter remembered that while Nant made its whisky in Tasmania, the administrative staff were based in Queensland, Mr Batt's home state.

She decided to visit the head office in Brisbane, but arrived to find it closed.

"We started to feel a little bit sick in the stomach then," said Ms McCarter.

"This is it, we've lost all our money."

Nant takeover falters

There was a brief glimmer of hope when Australian Whisky Holdings (AWH), a publicly listed company, announced a takeover of Nant last October.

Investors were relieved, and were optimistic the new owners would fix the mess.

Sorry, this video has expired Keith Batt talks about the process of taste testing whisky in a promotional video

But after AWH conducted a thorough stocktake as part of its due diligence, it was revealed that a staggering 700 barrels had never been filled with whisky.

The audit also found an unknown number of barrels were either missing or had been secretly decanted, bottled and sold to the public without the knowledge of investors.

In a letter sent to the McCarters in April, they were told five of their barrels of whisky simply did not exist.

The remainder had been filled with low-volume alcohol that would not reach maturity for many years to come.

"We were shocked, disappointed," Ms McCarter said.

"We sit here at night watching TV and see people on A Current Affair that have had their life savings taken away from them investing in stupid schemes and I kind of feel like we've been stupid as well."

Employees speak out

Speaking for the first time, two former employees have shed new light on the circumstances that brought the much-hyped investment scheme undone.

Annie Morgan was the senior bookkeeper for Nant. She told Background Briefing the distillery in Bothwell was struggling to keep up with demand when she was hired nearly three years ago.

Annie Morgan was a senior bookkeeper at Nant whisky. ( ABC RN: David Lewis )

"When our barrel investor manager left in October, 2014, she had mentioned to me that there were about 900 barrels that were unfilled," said Ms Morgan.

In a promotional video released last year, Mr Batt appears to defend the delays, explaining that the production of high quality whisky cannot be rushed.

Sorry, this video has expired Nant distillery founder defends slow production in promotional video

"We don't apologise for taking our time to make the whisky and to fill barrels and to make sure that every single thing we do is perfect," he said.

"We take a great deal of care and we just want to be able to educate our customers and our barrel investors that, you know, magic takes time."

Industry insider saw warning signs

In a subsequent interview with the alcohol industry news website The Shout, Mr Batt insisted he had a plan to fill the empty barrels and said Australian Whisky Holdings was well aware of it.

"They've made out that it was never our intent to fill the barrels, that we've just taken the investment and then pissed off, but that's just not true," he said.

"We had bought four new stills, we had 600 new barrels in the shed, we spent hundreds of thousands of dollars getting ready for expansion to meet our back orders because the barrel program has just been so successful."

The production problems worried former distiller Anthony White, who began to fear that investors expecting to receive returns within four years would be let down.

"If those persons' barrels weren't getting manufactured for two years after they'd purchased the barrel, there was no way they were going to be paid on maturation of their barrel after four years," he said.

Mr White was also uncomfortable with a marketing strategy that ultimately backfired. It involved labelling bottles of whisky with the number of the barrel from which the spirit was sourced.

The gimmick proved popular but was ultimately abandoned when a handful of investors discovered whisky from their barrels had been decanted and bottled without their knowledge.

"They actually took the cask number off the bottles after that point so no-one was aware of what cask number was in those bottles."

Money dries up

As confusion reigned over the barrels, bills were piling up and Mr Batt was developing a reputation for being unreliable when it came to paying suppliers who did jobs for Nant.

Background Briefing has seen an unpaid invoice for more than $100,000 relating to work builder Ben Nicholls completed at the Bothwell estate.

This was just the tip of the iceberg, according to Ms Morgan, the former senior bookkeeper, who remembers fielding multiple calls from other angry tradespeople.

"It was embarrassing. I was the one copping the abuse from them because they wanted their money," she said.

Former cricketer Matthew Hayden was briefly involved with Nant Whisky. ( ABC RN: David Lewis )

Even former Australian cricketer Matthew Hayden, who was approached to be the public face of Nant in 2014, was forced to terminate his contract when he stopped receiving income.

"Sadly when I got through about half of the first year of my contract, monies then ceased to be getting paid," he said.

Mr Batt and his wife Margaret had established a complicated network of businesses.

According to a diagram created by their accountants, Wallace Group, and obtained by Background Briefing, there were at least a dozen separate entities associated with Nant.

Around half of them are now under administration or in the process of being deregistered.

Leaked emails show 'creative' accounting

There are also fresh allegations barrel sales figures were altered before paperwork was submitted to the Australian Tax Office (ATO).

In December 2014, Mr Batt wrote to Ms Morgan to ask: "Annie, can you reduce the barrel sales in that quarter by 350 thousand dollars?"

An email from Keith Batt asking for Nant's sales records to be adjusted. ( Supplied )

Reducing the barrel sales had the effect of decreasing the amount of tax Nant paid that quarter.

In a separate email exchange in February 2015, Mr Batt made a similar request: "Annie, I'd like to get that down to 100 thousand, if possible."

According to Ms Morgan, Mr Batt believed that although the barrels in question had been sold, Nant was not required to pay any GST until they were filled with whisky.

But by the time Australian Whisky Holdings inspected the books earlier this year, Nant owed the ATO more than a million dollars. The ATO declined to comment on the case.

Staff take matters — and cash — into their own hands

In August, Background Briefing revealed Tasmania Police had launched a criminal investigation into Nant in response to allegations of fraudulent conduct.

Queensland Police are probing a separate Nant investment scheme that involved selling Angus cattle, promising the same 9.55 per cent return.

It is understood the Australian Securities Investments Commission is unsure whether it has the power to act in the case, as the barrels and bulls may be classed as property rather than financial products.

At Brisbane's Nant bar, Harrison Scarf and other workers took matters into their own hands. ( ABC RN: Harrison Scarf )

But rather than relying on others to investigate, Harrison Scarf, who was employed at a now defunct Nant bar in Brisbane, decided to take matters into his own hands.

When he and his colleagues failed to receive their wages last June, he called their hospitality manager, who implied they were unlikely to get their money and should stop working immediately.

Mr Scarf ignored that advice, instead devising a plan to claw back what they were owed.

"We'll stay open tonight," he recalls telling another bartender.

"We'll tell everyone the EFTPOS machine is down, we'll just take complete cash sales, and hopefully we can make enough money to pay ourselves out.

"Then we'll just empty the tills on Saturday night, leave our payslips in there, walk out, lock the doors, and never come back. And that's how we got our money."

Australian Whisky Holdings pulled the plug on the Nant takeover in March when it discovered the full extent of the debt the business had accrued.

The company instead decided to purchase only the Nant name and the whisky production assets.

It is now running its own distilling operation on the Bothwell estate.