The art of getting a £7,600 refund… get TONY HETHERINGTON to investigate

Tony Hetherington is Financial Mail on Sunday’s chief investigator. He battles the reader’s corner, reveals the truth that lies behind closed doors, and wins victories for those left out of pocket. Below you can read how to contact him.

Ms. MH writes: I bought artwork from Smith & Partner Limited last August and later bought two more pieces.

I was naive and believed this was a good investment because of the strong sales pitch. Since then I have been constantly fobbed off. It never sends emails, only calls and claims to have “great news.”

As time went on I realized how much crap I’ve gotten. I have asked to resell the artwork, but I keep getting rejected.

Tony Hetherington replies: You contacted me in response to my communication on 11 December that an older investor had pumped £17,000 into limited edition prints sold by Smith & Partner after being told that his initial purchase had increased in value and would be sold within a few weeks had made a profit of £3,000. I asked the art company owner, Luke Sparkes, for details of this amazing piece of art. He didn’t answer, but I’m pleased to add that he just gave the elder investor a full refund.

One of the appeals of the scheme is that Sparkes advertises that its investors can earn “potential returns of up to 64.6 percent in just 12 months.” I questioned this, and Sparkes told me there was once such a profit, back in 2017, when the company was just getting started and before he took over. If there had been a repeat performance – or a bigger win – since then, I expect he would have been happy to highlight it.

I also questioned Sparkes about his company’s financial position. The latest accounts from Companies House show that it is in serious trouble with the tax authorities. I asked Sparkes about this twice prior to last month’s report, but he didn’t answer.

He now says the dispute has been settled, although the numbers are unclear. Similarly, the accounts show that Sparkes itself borrowed £459,038 from the company. I asked if he has since refunded this but Sparkes has not replied.

When I pressed him about your own investments, Sparkes told me, “Please note that I have shared supporting evidence with you to the fullest extent permitted by us.” He added that he would be happy to share further evidence “if he has permission to do so.”

Well, last Monday I gave Sparkes your legally binding signed power of attorney, allowing him to freely discuss your complaint, and to hand over any documents or other records relating to Smith & Partner’s dealings with you, including the sales pitch. And last Tuesday he refused.

There are many question marks about this scheme. Smith & Partner advertises its “massive expertise within the art investment market,” but won’t say who exactly has that vast expertise and where they got it from.

Prints produced by a separate company controlled by Sparkes are marketed by its telephone sales team near London’s Shard building, but investors are bound by written terms. Are these read aloud in sales calls? How can they be bound by terms they have not seen? I asked, but Sparkes offered no explanation.

Despite all this, I can report two bright spots. Sparkes admitted that his company’s advertisements contained incorrect advice about taxes due on any investors’ profits. He corrects this. And the other good news? You bought £7,651 prints, which Smith & Partner says are stored in a warehouse in Switzerland. By the time you read this, you will have received a full refund.

WE WATCH YOU

Con artist Michael Nascimento

Fraudster Michael Nascimento – who was exposed by The Mail on Sunday way back in 2011 – has been sentenced to nearly four additional years in prison for failing to compensate victims of his £2.8 million investment scam.

The extra time comes on top of an existing 11-year prison sentence that was handed down in 2018.

Nascimento and his gang set up a fake investment company, Morgan Forbes (UK) Limited, and used high-pressure phone calls to persuade investors to buy shares in a plan to develop a resort on Madeira Island. They were promised a guaranteed return of between 125 and 228 percent.

But the Financial Conduct Authority found that the money raised was used to pay the costs of the fraud and fund Nascimento’s lifestyle.

In 2021 he was ordered to repay £976,511 but has handed over less than half of this.

The fraud started in 2010, and in 2011 I warned that Nascimento’s company was breaking the law by simply selling stock without the approval of the financial watchdog.

No action was taken, and I reiterated the warning in 2012 when Nascimento struck a deal to allow an offshore sales company to take over the marketing of its dud shares.

The fraud continued into 2014 and the FCA’s prosecution reached court in 2018.

Last April, the FCA delivered its final bow to Nascimento. Twelve years after he began operating his illegal investment company, the FCA banned him from the financial services industry.

That will teach him.

If you believe you have been the victim of financial misconduct, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email tony.hetherington@mailonsunday.co.uk. Due to the large number of questions, no personal answers can be given. Only send copies of original documents, which unfortunately cannot be returned.