Lee Chapman has told a jury he thought the business he encouraged investors to plough up to £50,000 into was destined to succeed.
The company claimed to have marketing rights to use the names and logos of the MCC and Lords Cricket Ground on a range of whiskies and gins.
He said he worked without pay for a year setting up the company but had no input into its overall financial management and believed it had a bright future.
The company, which was called Specialist Packaging Solutions (SPS) or CMS Drinks, folded in 2012 and a group of seven investors from north, mid and east Devon lost all their money.
Lee, aged 49, of Merton in Devon, denies five counts of fraud and three of contravening regulations which control financial services.
Lee Chapman is the brother of the company’s founder and managing director Mark Chapman, who changed his plea and admitted fraud at the end of the second week of his trial at Exeter Crown Court.
Mark, aged 51, of Twyford in Berkshire, admitted dishonestly misusing company funds.
The prosecution say he bought a Range Rover Sport, a Porsche Boxster, and a Mini Cooper for himself or his family out of money invested in the venture.
His brother Lee is still on trial and told the jury his role in the company was restricted to organising the outsourcing of production of Lords branded spirits and suncream.
The prosecution say he deceived pensioners Gwendoline Snell, Gertrude Hill, and Victoria Ford into investing a total of £112,281 into SPS by telling them it was a business investment.
They say he also broke regulations preventing unregistered people from offering financial advice.
Financial adviser Marc Payne, aged 43, of Higher Hearson in Swimbridge, North Devon, has also denied one count of fraud and four of carrying on a regulated financial activity without authorisation.
The allegations against all three men relate to a period between January 2007 and August 2012.
The alleged victims and the amounts invested are Graham Knight, from Reading, £291,000; Gwendoline Snell, aged 85, of Westward Ho, £17,721.80; Gertrude Hill, aged 92, £54,500; her daughter Victoria Ford, aged 70, both from Torrington, £40,000; Richard Biss, aged 91, of Stoodleigh, Tiverton, £29.919.83; Valerie Addicott, aged 83, of Exeter, £50,000; Elizabeth Gage, aged 84, of Woodbury, £50,000; and William Maynard, aged 83, of Witheridge, £50,000.
Lee Chapman told the jury he did not play any part in the negotiations with the MCC and did not know they had cancelled the contract because they were not paid any royalties.
He said he knew Mrs Snell, Mrs Hill and Mrs Ford from his former job as a financial adviser for the Prudential but he left the job in February 2006 and kept in touch with them as friends. He said he joined his brother’s firm SPS as a director as soon as he left the Prudential and worked from home in North Devon, rarely visiting its offices in Reading.
Lee explained he was not acting as a financial adviser when the three investors put their money into the business and had an honest belief at the time that it was destined to be a successful enterprise.