Art Futures Group / Overpriced chinese contemporary art buy/lease scam
After completing an online survey about purchasing art from Hong Kong, with leases in place, I purchased 5 paintings between May 2012 and October 2013, all offered with corporate leases in place, returning 6% per annum.
AFG's salesman, James O'Dell, pushed hard over the phone, not allowing me to talk, and railroading me into buying. I never thought to check current values of the artists works (big mistake) nor to question the ongoing lease of the art, which was my way of seeing a sustainable income for the future.
AFG tout themselves as 'experts' in art broking, and will handle exit strategies when the time is right.
I was offered 5 years storage and free insurance on each piece, photos, sales contract, provenance and where the art would be stored.
A few months before the 1st painting's 2 year lease contract was about to end I started to ask what was going to happen with a new lease. Emails went unanswered for months with weak excuses why. Statements were made that the works might not re-lease. To cut it short, NONE of my paintings, nor the 3 paintings my sister also purchased, re-leased and are currently sitting in storage in Hong Kong.
As AFG claim they are in the business of corporate art leasing, it stunned us that suddenly AFG couldn't lease our paintings again!
The managing director Jon Reade, after several emails, offered to re-lease the works at the same amount, which we declined, and nothing further was done.
After numerous emails, I demanded to see records of the paintings movement between artist, storage (for inspection), then transport to the lease client, and transport back into storage as suspicion that the paintings never were leased in the first place.
I also requested up to date prices for similar works by same artists, to check if the promised 20% gain per annum was realised on AFG's current price list. Of course there was no gain after 4 years.
I was sent a list of expected gain on investments, including wine, property etc, showing art appreciating 99% in 5 years! I also checked auction results of all the artists, and all had sold similar pieces for far less than I had paid! One piece (all artists have series of works with the same theme, so pieces are identical in size, medium, subject matter) I paid Aus$42, 500 and the auction value was $24-$30, 000! For artists in my portfolio that had sold similar works at auctions were far less than I had purchased the pieces.
When I emailed AFG about the huge difference, I was given the 'spiel' about how auctions work, blah blah, all negative.
I contacted several well known auction houses in Hong Kong and China, including Sotheby's and Bonhams and others with a view to sell the works at auction. EVERY auction house I contacted declined to take the works most stating there was NO MARKET for these pieces.
I tried to claim the difference in value for these paintings to the current auction value with no compensation from AFG.
I have asked repeatedly for information on how to best sell them, continually being put off to wait till 'early 2017', which again was met with not a good time to sell, auction houses don't take art under 10 years old, blah blah.
I visited Hong Kong in 2013 to see the paintings and was very surprised that 4 of the paintings were so easily 'removed' from the corporate lessee to AFG's offices.
Basically I feel cheated by fast talking salesmen, who have been rude, abrasive and evasive in answering straight forward questions about our investment in their recommended mid career artists "about to go Blue Chip", and the guarantees AFG gave about their appreciation, which has NOT happened.
In conclusion, buyers beware, do your homework about the real value of these works, and if AFG are recommending an artists and their series of works, check auction results and buy the piece for far less directly yourself!
We would like a full refund of all monies paid, including the guaranteed 20% /annum appreciation on these works.
Updated by Lucette d'Angelique, Jun 24, 2018
Hi everyone scammed by Art Futures Group, I have started a Facebook page to at least have us all under one umbrella, where we will receive notifications, and everyone who joins the group can post links etc. to move us all forward to not only closing this business down, but somehow getting some satisfaction monetarily and emotionally...please please join the group asap as it will carry more weight and get some attention from authorities! FACEBOOK group is private, called AFGSCAM - once all of you have joined, we will petition the Hong Kong consumer council for either assistance or direction to where we can take this further!
Updated by Lucette d'Angelique, Jun 28, 2018
Sometimes working with social media is a nightmare! cant get why afgscam wont show up, but noted that FB wouldnt accept 'scam' for a valid moniker - have now registered this email - AFGfraud@groups.facebook.com, use this from now on...I am a very dedicated social justice seeker and will NOT back down from the huge workload ahead of us..could those resident in Hong Kong please advise as 'feet on the ground' are needed to do some legwork - i am in Australia, with a huge workload at the moment, so all assistance is required to put pressure on the artworld who have turned their backs on us!