Swiss watchmaker Omega alleged three former employees were involved in a criminal plot that resulted in the sale of a faked Speedmaster at auction for more than $4 million.

The timepiece, an Omega Speedmaster with “Broad Arrow” hands from 1957, was in fact a “Frankenstein” watch, composed of an amalgam of mostly authentic parts from other vintage watches, said the Switzerland-based company in a statement in response to questions from Bloomberg.

The watch sold for just over 3.1 million Swiss francs (S$4.6 million) through auctioneer Phillips in November 2021, the highest price ever paid for a Speedmaster at auction.

It was bought by Omega itself, the company said. 

The scandal underscores concerns that forgers are creating fakes or altering some vintage watches sold on the secondary market and at auction to achieve higher sale prices. Collectors will pay millions of dollars for certain watches in good condition with original parts.

A former employee of the Omega Museum and its brand heritage department was among the staff alleged to have participated, said the company.

The former employee “worked in tandem with intermediaries to purchase the watch for the Omega Museum”, arguing to company executives that it “was a rare and exceptional timepiece that would be an absolute must” for Omega’s collection, it said. 

But the watch was a sophisticated forgery, melding components from various timepieces and potentially fabricated parts, alleged Omega. It added that the former employees may have been involved in its assembly. 

Omega did not identify the former staff it claims participated in the scheme.

“Its false legacy allowed the profiteers to justify a highly inflated bid made through the intermediaries,” said the watchmaker. 

The scheme was “to the massive detriment of Omega”, chief executive Raynald Aeschlimann told Swiss newspaper NZZ, which first reported on the case and the accusations against the former employees.

An Omega spokesman said the company does not yet know who brought the watch to Phillips to sell at auction. 

A spokesman for the auction house said it has not disclosed the identity of the seller due to client confidentiality rules, but would do so if asked by the authorities such as the police or the courts.

When Phillips consigned the watch and went to Omega for information from its archives, “we were not aware of the alleged criminal activity that is now the subject of an investigation”, added the spokesman.

The auction house obtained confirmation from Omega of the date of manufacture of the numbered movement, its serial number, the model of the watch that the movement was fitted to and the date it was sold, said its spokesman, adding that Phillips understands that representatives of Omega saw the watch before they purchased it. 

Phillips said it is committed to the “highest standards and due diligence levels in the watch market”, and that the item in question had been viewed by collectors, scholars and experts and travelled to London, Singapore, Hong Kong and New York before it was auctioned in Geneva. 

“If, having reviewed the evidence, we think there are grounds for criminal prosecution, then we will have no hesitation in referring the matter to the authorities to prosecute,” said the Phillips spokesman. 

Best known for its Speedmaster and Seamaster models, Omega is the third-largest Swiss watchmaker by revenue with sales of about 2.47 billion francs in 2022, according to Morgan Stanley estimates. 

The brand is part of Swatch Group AG and generates about half of the company’s overall watch sales, says Morgan Stanley. BLOOMBERG