With the improvement of social and economic development level and the continuous increase of national wealth, art investment, as one of the important channels for wealth preservation and appreciation and personal aesthetic taste display, is favored and has become a popular investment option and asset allocation method.

However, the prosperous art collectibles investment market has also become a target coveted by criminals, who are digging their brains to "get a share" and using art collectibles investment as a pretext to commit fraud. In this issue, we will unveil investment scams related to "art" for investors.

1. Real Cases

From 2019 to July 2020, a criminal gang led by Lei established a Beijing Cultural Development Co., Ltd. through registration. In their business premises located in Haidian District, Beijing, they fabricated the fact that the calligraphy and paintings of artists such as Wang could appreciate in value in the short term, and the company could sell them on behalf of others to ensure a steady profit. They deceived multiple victims, including Li (female, 65 years old) and Chu (male, 75 years old), into buying calligraphy and paintings at a high price, and defrauded elderly people of more than 7 million yuan in money.

In the first instance, 18 defendants including Lei were convicted of fraud and sentenced to imprisonment ranging from one year and ten months to thirteen years, as well as fines. After the verdict, Lei and other defendants appealed against the verdict. The Beijing First Intermediate People's Court rejected the appeal in the second instance and upheld the original verdict.

in recent years,

Art investment scams are not uncommon,

Investors must remain vigilant,

Please keep these anti fraud methods safe.

Secondly, keep in mind the "three warnings" when investing

1. Whether art management enterprises have qualifications, beware of "selling dog meat under the guise of sheep's head"

In 2015, the Ministry of Culture issued the "Management Measures for the Operation of Artworks" (hereinafter referred to as the "Measures"), which stipulate in Article 5 that "the establishment of a business unit engaged in the operation of artworks shall apply for a business license from the administrative department for industry and commerce of the people's government at or above the county level in its place of residence, and within 15 days from the date of receiving the business license, file with the administrative department for culture of the people's government at or above the county level in its place of residence

According to this regulation, enterprises engaged in the operation of art must meet the two conditions of obtaining an art business license and filing for art business registration with relevant cultural administrative departments in order to carry out art business activities.

2. Whether the artwork has proof of origin documents, be wary of counterfeiting and passing off inferior products as good.

Article 10 of the Measures stipulates that "Art business units shall, at the request of the buyer, conduct due diligence on the art purchased by the buyer and provide one of the following proof materials: (1) original proof documents recognized or issued by the art creator himself; (2) proof documents issued by third-party appraisal and evaluation institutions; (3) other proof documents that can prove or trace the source of the art

Consumers should not blindly listen to or trust the promotional language and verbal promises of company personnel when purchasing art. They should require companies to provide proof of the source of the traded art to avoid buying works with unknown sources, counterfeit names of others, or no corresponding value.

3. Did the salesperson conceal important information and be wary of misleading and deceptive behavior

According to Article 8, Paragraph 1 and Article 21 of the Measures, art business units shall not conceal important information in art descriptions to mislead consumers. Those who violate this regulation shall be ordered to rectify by the cultural administrative department of the people's government at or above the county level or the comprehensive law enforcement agency of the cultural market authorized by law, have their illegal gains confiscated, and be fined accordingly. According to Article 266 of the Criminal Law of the People's Republic of China, defrauding public or private property of a large amount constitutes the crime of fraud.

In the above-mentioned case, the company involved was established from February 2019 to July 2020, during which it operated for more than a year. It fabricated important facts such as the short-term appreciation of calligraphy and painting works to multiple victims, and was able to sell them on behalf of others, making a steady profit. The company sold low-priced calligraphy and painting works at a high price to elderly people, defrauding victims of more than 7 million yuan. The behavior of the involved personnel seriously infringed on the property rights of the victims and belonged to the fraudulent behavior of fabricating facts for the purpose of illegal possession to defraud victims of money. The people's court punished it according to law and made corresponding judgments.

III. Reminder at the end of the article

Investors should establish a correct investment philosophy, maintain a clear mind, and invest through legitimate channels. They should not easily believe in the gimmick of "high profits and fast returns", and should not blindly invest in unfamiliar fields to stay away from fraud traps. In case of fraud, immediately report to the police and keep relevant evidence.