Paris’s Musée des Lettres et Manuscrits (MLM), an institution devoted to ancient manuscripts and historic letters, was raided by French authorities on Tuesday for its apparent role in a fraudulent investment scheme masterminded by the museum’s founder, financier Gérard Lhéritier. According to Le Point, officers from France’s Brigade for the Repression of Economic Delinquency visited the MLM, Lhéritier’s home, his accountant’s office in Nice, and the offices of his company Aristophil, a fund that has allegedly raised some €500 million (~$627 million) from over 15,000 clients to be invested in the market for historic manuscripts, letters, and autographs.
According to a report in Charlie Hebdo last month, French authorities have been investigating Aristophil’s business activities since the spring, and a fraud investigation in Belgium (where the company has offices) is also underway. The company claims it uses investors’ money to buy historic letters and original manuscripts — including André Breton’s Surrealist Manifesto (for nearly €2 million), the Marquis de Sade’s 120 Days of Sodom (for €7 million), and a letter co-written by Vincent van Gogh and Paul Gauguin (acquired for €462,500) — dividing up the ownership among investors, one of whom is former French prime minister Dominique de Villepin. Investors in Aristophil have been promised returns of 40% over a five-year period, based on what the company claims is a booming market for manuscripts and letters. While the artifacts accrue value, they sit in Aristophil’s storage facilities or are put on public display in Lhéritier’s museum, which opened in 2005 and in 2009 moved to its current home in the Hôtel de la Salle in Paris.
But according to an expert quoted anonymously by Le Point, the growth in the manuscript market that Aristophil claims it is helping investors tap into is almost entirely supported by the company’s own acquisitions.
“Aristophil is a house of cards that threatens to collapse at any moment,” the expert said. “For the moment, the system is holding in place, because Aristophil, the principal buyer in the market, is artificially inflating the prices by buying certain manuscripts at record prices. It’s a speculative bubble maintained thanks to new money from investors, which allows the company to overbid at all the major public sales.”
The MLM website is now offline, but according to an archived version of the site from October 13, it is showing the Marquis de Sade’s 120 Days of Sodom manuscript through January 15, 2015, and has an exhibition of historic love letters on view until the day after Valentine’s Day. The Aristophil website, also down, explains in an archived version that the company was founded in 1990 and has become “a reference regarding the buying, selling, and study of letters and manuscripts. The company travels the world looking for rare pieces in order to offer is clients the opportunity to acquire important collections.”
This week’s raids aimed to collect evidence for the ongoing investigations into Aristophil’s business practices and to seize the assets of the company and its directors in anticipation of having to compensate duped investors.