Rare Art Rental Scams Investment Fraud
Investment Art Rental Returns That Are Hard to Appreciate
In one scam, investors are offered a ‘work of art’ for $10,000. Not only is this supposed to be an appreciating capital asset, but it can also provide a stream of income because, so the sales pitch goes, it can be rented out to businesses and restaurants to adorn their walls.
Indeed, the dealer is so sure this can be done that he will guarantee $1,000 of income for the first three years.
What actually happens is that the dealer buys a print worth $50 and simply puts it into storage.
Each year for three years he dutifully sends the investor $1,000 out of the original $10,000 investment.
Then, when he decides it's time to move on, after duping enough investors, the "dealer" simply sends you the $50 print and vanishes with $6,950 profit.
All along, you have been blindly content getting back a little slice of your own investment in typical ponzi fashion as the dealer lulls people with the promised income.
All you see are the promised returns in a regular stream never realizing that no investment actually exists.
Mobsters in Japan Pretend to Lease Out Rare Fake Art
01/07 - Japanese Police arrested a senior gangster and six other mobsters Wednesday on suspicion of swindling millions of yen from investors by selling them worthless paintings they claimed were valuable and that the buyers could lease to hotels and other establishments.
Yukio Sato, 50, a senior member of a gang affiliated with Yamaguchi-gumi, the largest yakuza syndicate, and the others defrauded a woman in her 20s and three others out of a total of 4.7 million yen sometime around June 2005, selling them paintings for hundreds of thousands of yen apiece, police alleged.
The suspects allegedly deceived the victims by claiming they could obtain large fees by leasing the works to companies. The paintings were in fact poor-quality reprints of printed editions and were of no value.
The suspects sold the prints to the victims for prices ranging from 300,000 yen to 1 million yen, convincing them they could cover the cost with the leasing fees.
The gangsters even created a fictitious company to make it look like the prints were in fact being leased to hotels and others, police said.
In addition to the cases involving the four victims, the suspects are believed to have obtained a total of 400 million yen from about 460 people nationwide, mainly young women, using the same scam over a half-year period starting in October 2004, according to the Metropolitan Police Department.
Tokyo police raided the office of Shinjuku Ward-based company Art Classics in November in connection with the paintings' sales. Police believe Sato runs the firm.
Japan Times
