Legal Dispute

Art Forgery Trial Asks: Were Dealers Duped, Or Did They Turn A Blind Eye?

“Art Forgery Trial Asks: Were Dealers Duped, Or Did They Turn A Blind Eye?”

by Joel Rose via “NPR“

The New York art world was shocked when the city’s oldest gallery abruptly closed its doors more than four years ago. A few days later, news broke that Knoedler & Company was accused of selling paintings it now admits were forgeries for millions of dollars each. The gallery and its former president face several lawsuits by angry collectors and the first trial began this week.

The forgeries at the center of the scandal look like masterpieces by Jackson Pollock, Willem de Kooning and other prominent abstract expressionists. They were good enough to fool experts, and even Ann Freedman, then-president of Knoedler & Company, says she was duped.

Her lawyer, Luke Nikas, says, “Ann Freedman believed in these paintings. She showed them to the whole art world. She showed them to experts. And she has piles and piles of letters from all of these experts informing her that the works are real.”

Nikas says Freedman even bought some of the paintings for her own personal collection. But the plaintiffs in this case and other pending lawsuits say Freedman overlooked glaring problems with the paintings’ backstories. The art dealer who sold the paintings to the gallery, a woman named Glafira Rosales, pleaded guilty to fraud and money laundering charges in 2013. According to Freedman, Rosales told an elaborate story involving a European collector (known only as “Mr. X”) who bought the paintings with cash in the 1950s, when he was having an affair with an assistant at two top New York galleries.

“It’s quite a tale, and people bought it,” says Amy Adler, who teaches art law at New York University. “I suppose the temptation would be there — not just for buyers, but, yes, even for sellers — to think they’d happened upon these magnificent, undisclosed masterpieces.”

In the end, Rosales admitted to selling Knoedler 40 counterfeit paintings over more than a decade. The plaintiffs argue that Freedman knew — or at least should have known — that something was amiss. It’s hardly the first time an art dealer has been accused of deliberately looking the other way.

Ken Perenyi is a professional art forger who wrote about his career in the book Caveat Emptor. “From over 30 years’ experience with art dealers,” he says, “I would say there most certainly are individuals out there in the trade that will turn a blind eye.” . . .

Treasure hunter Tommy Thompson to forfeit $425,000

“Treasure hunter Tommy Thompson to forfeit $425,000”

by Kathy Lynn Gray via “Columbus Dispatch“

Ex-fugitive Tommy Thompson has agreed in a plea deal to turn over $425,380 seized in his case to U.S. District Court.

The agreement, obtained by The Dispatch yesterday, was filed on Thursday as part of a criminal contempt-of-court case against the former treasure hunter. The document says that Thompson will plead guilty to one count of criminal contempt.

It also says that he will help the parties to a 2006 federal lawsuit against his shipwreck-search companies to identify and recover assets and that he will answer questions under oath about those assets, including 500 commemorative gold coins.

The coins were minted from gold bars Thompson brought up from the SS Central America shipwreck and were valued in 2007 at $1 million to $2.5 million.

Thompson also agrees in the document to answer questions and provide information to investigators, including identifying anyone who helped him while he was a fugitive.

If he pleads guilty to the single contempt charge, the document says, the U.S. attorney will not charge him with other offenses arising from the case, “including federal criminal offenses related to fraud and unjust enrichment.”

It also says that Thompson “claims to suffer from a rare medical condition that requires specialized treatment” and that the government agrees that Thompson’s medical condition will be a focus of the presentence investigation.

Thompson and his girlfriend, Alison Antekeier, were ordered in 2012 to appear before Judge Edmund A. Sargus in Columbus as part of the federal lawsuit over the treasure brought up from the shipwreck off the East Coast in the late 1980s.

Instead, the pair fled, and contempt charges were filed against them. They were returned to Columbus after they were arrested by U.S. marshals in southern Florida in January. . . .

Judge Ends Treasure Hunter’s Attempt to Salvage Cape Cod Shipwreck

“Judge Ends Treasure Hunter’s Attempt to Salvage Cape Cod Shipwreck”

via “NBC NEWS“

A treasure hunter’s effort to salvage what he calls $3 billion in platinum from a World War II shipwreck off Cape Cod has been ended by a federal judge.

Greg Brooks’ company Sea Hunters LP is no longer allowed to salvage additional items from the S.S. Port Nicholson, which was sunk by a Nazi U-boat in 1942, U.S. District Judge George Singal ruled on Wednesday.

Brooks said he believed the Port Nicholson carried platinum bars from the Soviet Union that were payment to the U.S. for war supplies. His treasure hunt had led to a criminal investigation and legal action by investors who paid him millions of dollars.

The judge also denied an attempt by a group of investors to win recovery rights, claims to what’s on the ship if anything is found. The judge wrote that evidence suggests there’s nothing valuable to salvage.

The record, the judge wrote, suggests that all that remains is “70-year-old truck tires, fenders and miscellaneous other parts and military supplies.”

The judge essentially ended Sea Hunters’ rights to any claim to potential treasure. He cited Sea Hunters’ actions “including the filing of falsified documents on this court’s docket and its inability to salvage any items of substantial value.” He issued the ruling with prejudice, meaning it’s permanent.

Brooks, whose company is based in Gorham, said he wishes he could talk in depth about the case to provide “the real story” but his attorneys want him to be silent.

“I will say one thing, I still believe the cargo is aboard the PN,” he wrote in an email. “I just cannot fight countries.”

Brooks said he located the Port Nicholson wreck in 2008. His claim of valuable precious metals aboard led to a splash in the media in 2012, but there were immediate questions about the veracity of it. He eventually put his vessel up for sale and laid off his crew.

Art and law come together at weekend conference

“Art and law come together at weekend conference”

by Michelle Liu via “Yale Daily News”

An upcoming conference will show that artists do more with the law than get in trouble with it.

This weekend, over 350 people from all over the world will attend “The Legal Medium,” a multidisciplinary conference taking place this Thursday through Saturday at the Yale Law School. Organized by a group of 14 graduate and undergraduate students, the event aims to explore the relationship between art and the law, focusing on topics such as how artists manipulate legal boundaries in their work. Amar Bakshi LAW ’15, the main organizer of the conference, said the upcoming event is unique in that it approaches the art-law connection from an artistic rather than a legal perspective.

“Most conferences on law and art tend to be about how lawyers deal with issues such as repatriation of works, cultural property in different domains or even the economics [of art] and its linkages to different legal systems,” Bakshi said.

Alexandra Perloff-Giles LAW ’17, a co-organizer of the conference, also highlighted the uncommonly interdisciplinary nature of the conference, noting that it draws together a large variety of professionals from different disciplines, such as architects, curators, lawyers and poets. She added that such collaborative ventures between multiple graduate schools at Yale — including the YLS and the Yale School of Art — are also rare.

The conference will feature a presentation by performance artist Tehching Hsieh, who is renowned for acts such as relegating himself to solitary confinement for a year. His piece will both comment on legal regimes and interact with them, according to Bakshi.

Four discussion panels will also be held during the conference, exploring how artists interact with laws of the human body, artificial and natural environments, the digital world and the government.

Perloff-Giles emphasized that encounters between art and law in the modern world occur in many different ways. She cited the detainment of artist Tania Bruguera, originally a speaker for the conference, in December 2014 by the Cuban government after Bruguera attempted to stage an open mic event in Havana, Cuba.

In conjunction with the conference itself, Lucy Hunter GRD ’19 is curating an exhibition entitled “Irregular Rendition” at the Fred Giampietro Gallery on Chapel Street. Hunter said the exhibition seeks to expand the ways in which laws — ranging from laws of jurisprudence to laws of physics — are viewed from an artistic perspective.

Art Law Rising

“Art Law Rising”

by Robert Milburn via “Barron’s”

The fast-growing and unregulated art market, invaded by art-collecting novices, has already seen a proliferation of hand-holding art advisors. Now we are seeing a new art advisor enter the market: specialist lawyers helping to settle ownership, copyright and authenticity disputes.

“Even people that have experience make common mistakes,” says Brian Kerr, partner at the recently launched art law firm Spencer Kerr. “The works being sold are of staggering value so the stakes are just too high.” That’s precisely when people reach for their lawyers.

Getty Images

Ronald Perelman purchased Popeye, by artist Jeff Koons, from Larry Gagosian.

Consider billionaire art collector Ronald Perelman, who sued fabled art dealer Larry Gagosian, claiming Gagosian “took advantage of his position of trust” and misrepresented the value of certain works. According to the lawsuit, Gagosian overvalued works sold to Perelman and undervalued pieces it bought from the collector. Among the works changing hands were sculptures by Jeff Koons and Richard Serra and paintings by Cy Twombly. In December, Perelman lost in an appeal with a five-judge panel essentially ruling that the sophisticated collector could have conducted his own due diligence.

Kerr represented London-based filmmaker Joe Simon-Whelan, in 2009, against the Warhol Foundation for the Visual Arts. Simon-Whelan purchased a Warhol silkscreen self-portrait for $195,000 in 1989, which back then was deemed genuine by the foundation. He resubmitted it to the foundation for authentication, in 2001 and 2003, just before an anticipated $2 million sale, and this time the work was twice branded a fake.

In the end, the Warhol foundation spent $7 million on its defense. Simon-Whelan eventually folded and was awarded nothing, claiming he was “deeply saddened” about being “unable to reveal the truth in court, but faced with bankruptcy, continuing personal attacks and counterclaims, I realized I no longer stood a chance of proceeding further.” Shortly thereafter, in 2012, the Warhol authentication board was disbanded.

Much of Kerr’s current work involves helping shell-shocked collectors recover scraps from among the emotional and financial wreckage, after purchasing a fake. But the law firm is also connecting its previously-burned clients with outside consultants and art advisors to help them establish clear provenance and authenticity before they buy new work.

“The goal is that when [clients] stick up their hand at an auction or buy from a gallery, that the legal side and consulting work is done hand-in-hand,” Kerr says. He adds that the consultants bill separately for their services and the law firm collects no fee for referring the business.