Companies wound up in £1m art investment fraud

Companies wound up in £1m art investment fraud

The Insolvency Service has wound up two businesses it claims are behind fraudulent investment schemes in the art market that cost investors £1m.

Cheshire-based Gem Tobin Ltd and York-based Dionysus Design Services Ltd, were wound-up in the public interest on October 7 at the High Court in Manchester before District Judge Matharu with the Official Receiver being appointed liquidator of the companies.

According to the Insolvency Service both firms received payments from investors who believed they were investing in works of art supposedly by renowned painters.

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Individuals paid £700,000 into Gem Tobin and Dionysus Design Services received more than £200,000. 

But instead of being invested in art the money was paid out of the companies' bank accounts. 

Investigators have not been able to determine how the funds were spent as the individuals believed to have been in control of the companies failed to co-operate with enquiries, the Insolvency Service stated.

David Hope, chief investigator for the Insolvency Service, said: "These companies have acted cynically in accepting almost a million pounds from members of the public, many of whom are elderly and vulnerable people, with no evidence to indicate that the investment being offered had any value or was likely to generate any return for the investors.

"This continues a pattern of behaviour that was identified in relation to other companies."

The Insolvency Service said the companies' activities came to its attention as a result of its investigation into Halifax Mannin Ltd and Hey Design Services Ltd, which it had wound up in March 2019, after they were found to have "abused" £1.4m of investor funds.

It believes Gem Tobin Ltd and Dionysus Design Services Ltd were effectively continuing the previous firms' activities.

All four companies had links to a business in Spain or Morocco called Asset Consulting, according to the Insolvency Service, which the FCA has previously warned about.

Mr Hope said: "Thankfully, the courts have now put a stop to their activities, preventing further harm, and anyone approached by, or thinking about making an investment with, Asset Consulting Services or Asset Consulting Group should read the warning issued by the Financial Conduct Authority and take independent financial advice before making any decisions."