Shanghai Auction Executives Sentenced in Major Fraud Case as Industry Scrutiny Intensifies
Two former managers of a prominent Shanghai auction house have been sentenced to lengthy prison terms for orchestrating an extensive fraud scheme that led one collector to spend about RMB 500 million ($74 million) on counterfeit or grossly overpriced artifacts. Hong Kong media reported on Wednesday that the collector, from Shandong province, purchased more than 40 items from Shanghai Jiahe Auction Co., Ltd., only to discover that authentication documents revealed many were forgeries or had been assigned artificially inflated valuations. The two former managers were convicted in four cases and sentenced to 14 years and six months and 12 years in prison, respectively. According to the court judgment, the pair arranged for employees and associates to drive up bidding prices at auction, inducing the collector, identified under the pseudonym Li Pin, to purchase the items at inflated prices. The profits were then divided between the consignors according to a p...