Art auction fraud
A scam of fake overseas high-priced auction art
In Beijing, there were several institutions called "auction companies" or "international auction companies", which worked in high-end office buildings with official names and business licenses, and a group of high-sounding "salesmen" who talked about art and overseas markets were active in these companies, and used various channels to disseminate "internal" news, claiming that they could provide art collectors with the opportunity to auction their collections in overseas markets, and take advantage of the information gap in the international market to earn high returns for their clients. Delegators can also get in-house collection information through them. As long as you become a member, you can buy rare artworks at a low price through internal information, sell them at a high price, and sell them at a high price at a chance to make a profit. In the past two years, these auction companies with the name of "international" have attracted the attention of hundreds of art collectors, but what awaits them is a "big pit" that people regret.
Case replay
The "Beijing A Auction Co., Ltd.", "Beijing B International Auction Co., Ltd.", and "Beijing C International Auction Co., Ltd.", which have set up offices in Chaoyang District and Dongcheng District of Beijing, have formed a fraud gang consisting of the legal representative, general manager, business manager and various salesmen of the auction company through careful layout and recruiting business personnel as accomplices, with as many as 28 members. In less than two years, the managers and salesmen of these companies induced as many as 460 victims to become "members" or "high-ranking members" of the companies by deliberately fabricating that the companies had special business projects of auctioning off members' "collections" at high prices overseas, and these members repeatedly purchased items from several auction companies at high prices. After the case was discovered, it was found that the gang had defrauded the victim of more than 3,000 yuan in just two years. After trial by the people's court, a total of 28 defendants were sentenced to fixed-term imprisonment ranging from 2 to 14 years for the crime of fraud. After the first-instance verdict was announced, none of the defendants appealed, and the judgment took legal effect.
Scam tricks
This criminal gang of fraudsters, located in the imperial city of Beijing and under the name of "international auction company", has carefully laid out and designed traps step by step to lure customers into the trap and deceive. Most of the deceived objects are middle-aged and elderly people, and even a WeChat group of the fraud gang is even named "Elderly Harvester Strives for the First Place Every Month". Their scams are generally as follows:
Step 1: Telemarketing, spreading bait
The fraud syndicate first uses phone calls to attract "potential" customers to the company for interviews. The gang set up a unified "call sheet" and purchased the mobile phone number segment of potential users through illegal means. The salesman's main job is to make phone calls one by one, claiming that the auction company has expert resources from the Forbidden City and can also provide customers with free appraisal and auction services, and use these so-called special "channels" and free services as bait to lure victims to their company for interviews.
Step 2: Hype and false promises
After successfully inviting potential victims to meet with the company, they used special words and mutual trust to hype up the company's special auction capabilities, showing the "grand occasion" of overseas auctions through fake video materials, and at the same time promising the victims that they could auction their overseas collections for customers for free. When the victim showed that he had come to believe in the company, the salesman took the opportunity to promise them that the company could auction off the client's "collection" "overseas" for free, and hoped that the client would bring the collection to the company for free appraisal.
If the victim does bring the collection to these auction houses, it will almost be in the pit. The syndicate will arrange for so-called "graphic designers" to take photographs of the collections, and then arrange for so-called "experts" from the Forbidden City to evaluate the products, and use all sorts of rhetoric to promise customers that their "collections" will be sent for auction overseas.
Step 3: Falsely quote the high price to lock in the contract
The salesman of the auction company falsely reported the high price of the victim's collection, fabricated the fact that the overseas market demand was large, and tricked the victim into signing a contract to voluntarily entrust the auction of his own "collection". In order to make the victim interested in the auction of the "collection", the salesman falsely reported the high price of the "collection" brought by the victim, such as falsely claiming that the national grain stamps were in great demand overseas and could be auctioned for 1 or 20,000 yuan. The stamps, food stamps and other collectibles of the deceived victims were quoted at a price of up to 6 million.
After that, the salesman tricked the victim into entrusting the company to auction his "collection" and sign the "Art Auction Contract" under the pretext that the company would auction it "for free". Attached to the contract is a "List of Lots", in which the "starting price" and "reserve price" are actually unrealistic prices suggested by the salesman, and the prices are generally seriously abnormally high, so that the victim is full of expectations for the auction prospects and profits of his "collection".
After the case was discovered, the search found that some of the "collections" provided by the victims (including national grain stamps, 300 books of Tang poems, calendar cards, etc.), after price appraisal, such as national grain stamps, rice stamps, and postage stamps, were only worth a few yuan or dozens of yuan.
Step 4: Bundle members and ship at a high price
At this point, the syndicate began to announce to the victim that only by becoming an official "member" of the company could he enjoy the "free" auction service, and that the prerequisite for such membership was to purchase the "collection" held by the other member at a high price, or to claim that the company's own "collection" (but in fact the price was extremely low). Subsequently, the salesman coaxed and deceived the victim to sell the so-called "collection" to the victim at a significantly higher price, and provided the "Transaction Confirmation" as a transaction voucher in a fake manner. In order to deeply bind the victims, these salesmen will constantly exert pressure on the victims on the grounds that if they do not purchase the "collections" of other senior members within the specified time and as required, the consignment auction contracts signed before will be invalidated. If the victim hesitates, they will step up their urging and create tension and exacerbate the victim's anxiety on the grounds of imminent loss of rights.
Step 5: Intensify the secondary fraud
For victims who have been deceived and become "members", the salesman of the auction company will further inform that in fact, the company has multiple membership levels from low to high, and the membership services are divided into four levels: A, B, C, and D, and there are significant differences in the rights and profitability of each level of membership, and members can only further improve their membership level by purchasing the so-called "collections". For example, if the amount of "collection" purchased reaches more than 300,000 yuan, you can be upgraded to an A-level member to enjoy a 6% discount on commissions. In this way, these auction companies defraud their victims twice or even more times by tricking customers into buying high-priced "collectibles" and then increasing their membership levels.
By the time of the incident, many elderly victims had been repeatedly brainwashed by the salesman, and even went too deep into the drama to buy worthless "collections" in batches and many times.
Art Law Peer Tips
Article 266 of the Criminal Law of the People's Republic of China stipulates that the crime of fraud refers to the act of fraudulently obtaining a relatively large amount of public or private property by means of fabricating facts or concealing the truth for the purpose of illegal possession.
In recent years, with the development of the mainland cultural relics and art market, it is not uncommon to commit fraud under the guise of art auctions. These fraudulent groups use fake auctions, pre-receipt auction services, binding members and other methods to carry out fraud, which seriously damages the market order of the art auction market, brings serious distress to some art collectors, and even causes huge economic and property losses.
Tip 1: Choose a regular auction company
Art collectors and players should carefully choose a formal auction subject when choosing to circulate artworks through auctions. Formal auction companies are not only required to hold a business license issued by the industrial and commercial department, but also obtain an auction business license issued by the competent department of commerce in accordance with the provisions of the Auction Law. If its business scope involves cultural relics, it is also necessary to obtain the "Cultural Relics Auction Business License" issued by the administrative department for cultural relics.
Tip 2: Be cautious about auction fees
Although the relevant laws and regulations do not explicitly stipulate the issue of auction fees, in accordance with the general practice of the international auction industry, auction commissions and related fees shall be collected after the auction house completes the entire auction service process. If you are charged before the auction in the name of appraisal, publicity, catalogue, service fee, etc., you must be particularly cautious.
In 2011, the China Auction Industry Association formulated the Self-Discipline Convention for Chinese Cultural Relics and Art Auction Enterprises, which stipulates in Article 10 that "enterprises shall abide by professional ethics, do not carry out any form of false publicity, and do not charge any fees to the consignor before the auction." This clause provides an important basis for determining whether the auction is regular, and helps to regulate the market order and protect the rights and interests of consumers.
It's important to remember that there's no such thing as pie in the sky, and criminals often take advantage of the victim's eagerness for short-term profit to commit fraud. The majority of art collectors, especially the elderly, must maintain a high degree of vigilance, be cautious about investment behavior, reasonably plan financial plans, and resolutely not covet temporary profits. At the same time, it is also necessary to remind the family members and children of the elderly to care for the elderly, communicate and talk more on weekdays, popularize relevant knowledge of fraud prevention to them, and jointly protect their safety and happiness.
Tip 3: Don't trust sales calls
Be vigilant against telemarketing scams and strengthen your ability to identify them so as not to provide opportunities for criminals. In the case of large financial expenditures, it is important to properly retain relevant electronic evidence and documentary evidence. In the unfortunate event of fraud, this evidence will help the public security investigation agency to lock down the suspect and recover the loss and economic loss in a timely manner.
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