A record-breaking vintage Omega Speedmaster is now the subject of an investigation and alleged criminal activity, including by three former Omega employees. The watch, a tropical Omega Speedmaster ref. 2915-1 “Broad Arrow,” originally made headlines when it sold for a record-breaking $3.4 million at Phillips in November 2021.
As you might’ve seen, the news began in April when Perezcope published his findings related to the tropical Speedmaster. But on June 1, a report by Zurich newspaper Neue Zürcher Zeitung (NZZ) detailed a criminal series of events that resulted in a “Frankstein” watch made of disparate parts from various vintage Speedmasters appearing at auction.
Omega has said the watch was the subject of an organized criminal effort by a group of conspirators, including three former employees, among them the former head of the Omega Museum and Brand Heritage. In separate statements, both Phillips and Omega have said they were the joint victims of organized criminal activity.
According to NZZ, it all began a few months before the watch went under the hammer in Geneva, when a Swiss dealer was shopping around a Speedmaster with a beautiful tropical dial.
The dial was the watch’s standout feature, but it was made up of other parts that weren’t correct for the watch and didn’t fit together – the dealer was reportedly shopping it for about $50,000. Unable to sell it, another dealer instead began sourcing parts that would be period correct for the watch, meaning they matched the date in which the dial and case would have been produced.
After speaking with others in the industry, the collusion allegedly involves one dealer based in Fribourg, Switzerland (according to his Instagram and eBay accounts), and another Swiss dealer who trades primarily in spare parts, who colluded with the Omega employees involved.
With one former employee’s access to Omega’s archives, the dealer was allegedly able to figure out an appropriate movement number for the watch and source a new movement bridge with that number engraved on it.
The dealer then allegedly brought the watch to auction, where the lot was offered with an Omega Extract from the Archives that listed a movement number matching the one engraved on the watch’s new bridge; a full Certificate of Authenticity (where Omega’s watchmakers conduct a full examination of the watch to establish its authenticity) was not provided at the sale.
Along with this, a new bezel and chronograph seconds hand were also added to the watch and the dial and hands were relumed (when it first appeared on the market, the dial had later tritium lume but it was relumed again to look like radium, as would’ve been correct for the period).
The bezel seems to have been sourced from another Speedmaster that Phillips sold and Omega purchased for its Museum in 2018, which Perezcope initially pointed out in his forensic study from April. After speaking with Omega, Robert-Jan at Fratello Watches provided new details about the components of the “Frankensteined” Speedmaster.
“We do not offer watches unless we are 100% satisfied about their authenticity,” a Phillips Spokeperson wrote via email to Hodinkee. “Until last week, nobody had ever suggested this Omega watch was not authentic, the watch was inspected by specialists, experts, and even the manufacturer at the time of the sale and nobody raised any concerns over it.”
Before the sale, Phillips said it obtained confirmation from Omega of the date of manufacture of the numbered movement, serial number, the model of watch that the movement was fitted to and the date it was sold (as would be provided on an Extract).
According to a number of dealers and collectors I spoke with, questions were raised around the time of the auction as to the watch’s originality. The bezel was one red flag, recognizable as coming from a later ref. 2915-2; some also recognized the dial as having been offered in its previous form.
More baffling though, was the auction result: $3.4 million for a watch that might’ve had a market price of about $200,000 at the time. In the past few days, Omega has made public that it bought the watch at Phillips, convinced by the head of the Omega Museum of the watch’s importance and rarity.
According to a statement from Omega, this individual “worked in tandem with intermediaries to purchase the watch for the Omega Museum.” On the day of the sale, the watch was the subject of an intense bidding war, with bids coming in from Oman, Texas, and China, before what was identified as a Chinese bid ultimately took the lot.
“Its false legacy allowed the profiteers to justify a highly inflated bid made through the intermediaries, which allowed those involved to collect and distribute the profits generated from the sale,” Omega’s statement continued.
“After we confronted them with the facts, they admitted to having acted fraudulently and criminally,” Omega CEO Raynald Aeschlimann told NZZ. In its statement, Omega has said it is bringing criminal charges against all involved.
Meanwhile, Phillips first told Bloomberg that it was not aware of the alleged criminal activity at the time the Speedmaster appeared at auction. Due to confidentiality obligations, Phillips says it hasn’t disclosed the identity of the consignor. As of June 9, Phillips told Hodinkee it has not yet been contacted by legal authorities, but it will, of course, comply if and when this occurs.
“Phillips has built a reputation for the highest-level, industry-leading due diligence process,” a Phillips Spokesperson said, “holding itself to the highest standards in KYC protocol and authenticity research. Phillips prides itself on carrying out thorough and detailed checks on all watches which are submitted to ensure that we only offer for sale watches which we are satisfied are authentic in every single aspect – and that every single part is authentic. This means the watch and all its parts must be made at the time the watch was created by the original manufacturer.”
The allegations tell the story of a series of events orchestrated by a tight-knit group of criminal actors that took advantage of the access they had, all to their massive and profiteering benefit. Make no mistake, the parties involved – from the former Omega employees to the dealers – are accused of engaging in criminal fraud.
After speaking with others in the industry, some have said the reputation of the dealers involved was already less than stellar. One dealt primarily in parts, while the other was known to often put together Frankstein-ed Heuer, Universal Geneve, and Omega watches, much like the Speedmaster at the center of these allegations.
The incident is a keen reminder of the risks of buying expensive vintage watches, particularly at auction and as more money flows in than ever before. Now, even two of the largest stakeholders in the watch industry say they’re victims of alleged fraud.
The series of events has already had a negative impact on the rest of us. Omega has had to temporarily cease issuing certificates and extracts on its vintage watches. It’s also a cause for concern for the rest of the vintage Speedmaster market.
This particular watch was brought to light because of its record-setting result, but it could sow doubt as to the originality of other vintage Speedmasters, as individuals at the Omega Museum with access to vintage parts or components are now essentially accused of swiping these parts to put watches together.
There’s almost no chance this was an isolated event. Many are questioning Omega watches that have appeared on the market over the past few years; some I’ve talked to have mentioned Speedmaster prototypes like the “Alaska Project” as models that could be most quickly called into question. JX Su even went so far as to say that the alleged fraud doesn’t matter that much – Frankenwatches are already rampant in the space.
It’s also a reminder that auction houses represent the seller, not the buyer; Phillips’ Conditions of Sale make clear that it “acts as an agent for the seller.” These conditions go on to say that “the knowledge of Phillips in relation to each lot is partially dependent on information provided to us by the seller, and Phillips is not able to and does not carry out exhaustive due diligence on each lot.”
Prospective buyers are responsible for their own inspections and diligence. Here, Phillips says it’s the victim of an alleged multi-party fraud. But the reality is that auction houses represent sellers, and they only get paid when a lot sells. In the world of watches many buyers are still unaware of this dynamic and the incentives it can create.
Like other auctioneers, Phillips does provide an Authorship Warranty in its Conditions, essentially a five-year money-back guarantee that the watch is an authentic Omega.
“All of our watches are sold with a warranty of authenticity entitling the buyer to their money back in the event that the watch turns out not to be authentic,” a Phillips Spokesperson said.
“We have examined our records and cannot identify a single instance where a watch has been returned to us because the watch was deemed inauthentic either by the manufacturer or by general consensus of scholarship.”
But whether a vintage watch is “authentic” is a complex question. As Omega said in its statement, “the watch is an assembly of mostly authentic Omega components, commonly called a ‘Frankenstein’ watch” (Omega did tell NZZ that the bridge with the new serial number was not an original Omega part). Whether this means the watch was an “authentic” Omega may be open to interpretation.
The situation also illustrates the perils of the lack of transparency inherent within the auction industry and in vintage watches more broadly. It’s unreasonable to expect any dealer or auction house would uncover alleged fraud this deep, complete with involvement from employees at the heritage department of the very brand that issued extracts for these watches. But the identity of a consignor is known only to the auction house, and it’s up to them how far to go in investigating the consignors.
Another question is what happened during the bidding. The watch had an estimate of CHF 80,000 to 120,000. Even in the most Panglossian of worlds, it was hard to imagine a $3 million result.
Omega’s statement mentions that “highly inflated” bids made through intermediaries allowed those involved to profit. The extent of the potentially fraudulent activity of these actors on auction day – and who else could’ve uncovered their activity at this time – seems like an open question to be answered with further investigation.
According to one former auction house specialist I spoke with, in the last few years it’s become considered best practice for brands, when bidding at auction, to be in the room so that their interest in the lot is public knowledge.
Rolex has done this the past few auction seasons; even Omega has historically been in the room when bidding. For example, when it won Elvis’ watch in 2018, the now-former head of the Museum was bidding in the room.
These issues are not unknown to the auction world. Back in 2007, Omega found itself embroiled in a different scandal after Antiquorum’s single-brand Omegamania sale. In an article titled “how watchmakers intervene at auctions,” the Wall Street Journal reported that Omega had bid on 80 of the 300 lots in the auction, winning 47 of them.
Before and after that sale, some questioned the originality of a number of the lots. Buying their own watches at auction is a strategy brands have long used to prop up the perception of their watches on the secondary market, dating back to 1989’s thematic Art of Patek Philippe sale. Today’s scandal is much deeper than a brand simply bidding on its own watches at auction, but draws on the same fundamental issue: a lack of transparency at auctions.
The simple explanation for the alleged actions of those involved is that too much money and power was put in the hands of too few individuals, without any real oversight or obligation of transparency.
Whether there were other circumstances at play remains to be seen, but whatever the case, these alleged bad actors were able to exploit this to their own benefit.
While it seems that the criminal system will seek to bring justice to this set of actors, perhaps this series of events will call attention to the vulnerabilities of the current structures and institutions in place, and perhaps bring some much-needed transparency to the world of vintage watches and watch auctions.