French Art Works Auctioneer Collects €41.3m from Sale of Aristophil Collections

French auction house Claude Aguttes SAS, one of four auction houses assigned by France’s Tribunal de Commerce (Commercial Court), reported that up to April 15 of this year, as much as €41.3 million in revenues have been realized from auction sales of the Aristophil Collection. Claude Aguttes’ designation as auction house for the said collection was in line with the Tribunal de Commerce’s handling of the receivership and liquidation of the scandal-ridden and bankrupt Aristophil company.

However, the €41.3 million revenue achieved by the Claude Aguttes SAS, auction house, plus the more than €140 million cash and assets sequestered from the Aristophil company and from the Lhéritier family, is still a long way off from the €850 million collected from Aristophil investors. When the investment scheme came under investigation in 2015, it was unraveled as an organized fraud that promised overstated returns on an investment product that was not as highly lucrative as it was purported to be.

What was the Aristophil Company’s Investment Scheme?

The Aristophil Company was an entity founded in 1990 by Gérard Lhéritier, a former insurance broker. Lhéritier cooked up an investment scheme by enticing people to expend money to be used in buying, and then selling precious documents and historical manuscripts. Through the Aristophil company, Lhéritier promised investors that the money they contributed will earn as much as eight percent (8%) per annum.

In fact, the Aristophil company even opened a small museum and named it Musée des Arts et des Lettres, displaying about 130,000 precious documents, which soon drew attention and attracted more investors. The museum held a rich collection, including manuscripts produced by the likes of Victor Hugo, Proust, Balzac, of the Marquise de Sade, and even by American President John F. Kennedy. Investors were assured therefore that the money they contributed were being properly invested, which all the more made them sure that they made a wise investment.

As it turned out though, Aristophil was paying returns on investments using fresh funds collected from new investors to the scheme. Similar to Bernie Madoff’s Ponzi scam, the fraudulent set up collapsed when the company was no longer successful in enticing new clients. The company’s subsequent bankruptcy led to the investigation of how the Aristophil company operated.

In March 2015, Gérard Lhéritier was found guilty of deceptive marketing methods, breach of trust, organized fraud, misuse of corporate assets, presentation of unfaithful accounts, and money laundering, Aristophil company was immediately placed under receivership in February 2015, and later into liquidation in August, 2015.