One common investment for the wealthy is artwork. However, oftentimes, art buyers fall victim to one of the common crimes of the day: scamming. Bootleg art is a $6 billion dollar per year industry that is easy for scammers to pull off. “Unlike any other market where large sums of money change hands, the art market is unregulated,” says attorney Judd Grossman. “It’s easier to perpetrate a scheme that is fraudulent or barely walks the line.”
Today, in US District Court, Domenico and Eleanore De Sole are looking to exact some comeuppance on Manhattan’s oldest (now-shuttered) art gallery, Knoedler & Co. and it’s defamed president Ann Freedman, for selling them a fake Mark Rothko painting for $8.3 million. Freedman lied to the De Soles to make the sale, telling the couple that the forged painting was picked from the collection of a Swiss heir, whose father bought paintings directly from up-and-coming artists in the 1950s.
Knoedler & Co. sold 31 fugazi paintings from 1994 until 2009, raking in $80 million from art connoisseurs. Freedman allegedly earned $10-$12 million within that time period. The NY Post details beginnings of Knoedler’s fraud:
Knoedler’s fantastic tale of fraud begins in the early 1990s on the streets of Manhattan. That’s where a former waiter from Spain, Jose Carlos Bergantiños Diaz, came upon a Chinese artist peddling canvases on the sidewalk. Bergantiños approached the man, Pei-Shen Qian, and said that he had friends who wanted works by esteemed artists but could not afford the real things. Could Pei-Shen duplicate paintings for them? Bergantiños reportedly offered $500 per copy.
Though there were a few hitches — like the misspelling of Pollock’s name — Pei-Shen proved to be amazingly skillful.
“Bergantiños would make the paintings look older with tea and dirt,” says Nikas. “Finally, he would give the art to Glafira Rosales” — the grifting girlfriend of Bergantiños and a small-time dealer on Long Island.
In 1997, Rosales swept inside Knoedler & Co. bearing a work on paper that she said was by Rothko. She unspooled the Swiss heir story, helping account for a lack of all-important provenance, which typically provides a paper trail to prove authenticity.
Over the years, Rosales admittedly moved more than 60 “lost” works by Rothko and others to downtown art dealer Julian Weissman as well as to Knoedler. “The whole time,” says Nikas, “the Chinese guy was painting them in his studio in Queens.”
After Pei-Shen discovered that his canvases were being sold for millions of dollars, says Nikas, “he raised his price to $5,000 per piece. Bergantiños and Glafira made $30 million. Obviously, [Pei-Shen] was not a great negotiator.”
Slowly, it was revealed that the art gallery was selling fake pieces and the company eventually went under after a number of secret lawsuits and refunds. Rosales pleaded guilty to nine counts, including money laundering and wire fraud. She has agreed to cooperate wit investigators while awaiting sentencing. Bergantiños was arrested in Spain where he remains. Pei-Shen, the artist, is still free in China, where he is “untouchable.”
If victorious in their lawsuit, the De Soles could be awarded as much as $25 million.
Read the full story here.