Fakes & copies

A brush with the law: The FBI jump on two auction houses, but prosecution is no simple matter

It’s not a crime to sell a fake—unknowingly

In two recent cases, US art dealers have jumped on auctioneers they said were trying to sell fakes—and hauled the US Federal Bureau of Investigation into the act. Auctions scheduled at the Louisiana Auction Exchange in Baton Rouge, and C.B. Charles Galleries in Pompano Beach, Florida, were called off, the New York Times reported, after dealers charged that supposed Chagalls, De Koonings and others (in the Louisiana sale) and Jasper Johns, Frankenthalers and others (in Pompano Beach), were phonies. While the FBI does not comment on pending investigations, it did say that in February it took possession of the C. B. Charles paintings, and a person involved said that the agency had been investigating both auctioneers.

With a boom in fakes reportedly following the continued growth in art-spending by US consumers, the cases raise questions about how the FBI gets involved in allegedly fake art—and on what grounds.

In the US, crimes are left to the fifty States to prosecute, but considering the complexity of successfully prosecuting a fraudulent sale of fakes, it is an advantage to get the federal government involved, with its superior investigative and prosecuting resources that can include art experts. Limitation in US statutes governing the knowing sale of fakes can, however, make the crime difficult to prosecute and deter.

Making fraud federal

The US gets jurisdiction over art fraud in the same way as with any otherwise “local” fraud—by criminalising the use of the US mails or wires in furtherance of the scheme.

“As soon as they send out a catalogue in the mail, or put an ad in a national newspaper, the link to interstate commerce allowing the FBI to step in is established,” says Gilbert Edelson, counsel to the New York law firm Rosenman & Colin and Administrative Vice President to the Art Dealers Association of America. Use of the phone and mails to solicit customer and send faked certificates of authenticity was how the Center Art Gallery, a famous bogus Dalì print outlet in Hawaii, got snared in the federal net, including criminal fraud conviction.

Among purveyors of puffed-up art caught on the mail and wire fraud tripwire was Chicago dealer David Austin, convicted in 1995 for selling signed, supposedly original limited edition prints by Dalì, Picasso, Mirò and Chagall—most of which, the US Federal Trade Commission (FTC) said, were forgeries. (An FTC expert who examined 490 prints did not find a single authentic original). The Commission, which has flexed its muscles to stop sales of misattributed and counterfeit Dalìs in other cases, imposed a $625,000 fine on Austin to help make up the $3.5 million loss he had caused customers, and told him to stop making misrepresentations in the sale of art work. But he forged ahead, selling at least one further fake Chagall, after which the government heaped criminal proceedings on top of the FTC penalty.

“The legitimate art world understands our jurisdiction,” says FBI spokesman Peter Ginieres, of the agency’s outreach programme to promote good relations with reputable dealers: “Our presence is known.”

The Art Dealers Association provides expertise to the FBI in such cases, and the International Federation for Art Research also does not hesitate to make contact with the FBI or send duped customers to it. The FBI’s computerised Nation Stolen Art File, is of great use to the art community, recording thefts reported to the agency by US and international law enforcement agencies and made available to local law enforcement officers.

How to prove intent?

Finding mail use is one thing; proving intent is another. Since it is not a crime simply to sell a fake, the key to any fraud actions is proving the sellers mens rea (no, not Man Ray; “guilty mind”). At the Austin trial, gallery employees recalled that they “never seemed to run out of any print” and there never was a time when a customer ordering a specific edition number was told it had been sold or was unavailable; prints had been obtained in “suspiciously large quantities,” even exceeding the number in the edition.

In the case of forgery, the shorter path between making the reproduction and passing it off as real may make intent easier to establish—especially if the forger wants to show his talent off, as Van Meegeren did by painting a Vermeer in gaol. But it is probably harder to establish whether a middleman dealer, unconnected with the act of producing the fake, fully knew, dimly guessed or had no idea the object was fake. And the seller can always swear on a stack of art-history books that he believes the work is real—after all, it is signed.

But while civil suits for recovery of the sales price are deterrents to the unscrupulous and FTC penalties for selling “misattributed” Dalìs are added deterrents, US criminal penalties in this area have been criticised as too lax. While the penalties may be increased given sentencing factors or additional convictions on other counts, five years in gaol and a measly $1,000 fine for mail and wire fraud just may not be harsh enough given the profits possible in today’s market.

Originally appeared in The Art Newspaper as '“It sure looked like a Dalì to me”'