As fine art and collectibles continue to surge on the market creating a lucrative alternative asset class for estate planners, it is wise to stay informed about the darker side of the market. In 2007 art forgery rose right along with sales prices. While this underworld trade may thrive in non-transparent, private sales, such illicit activity is almost always discovered when counterfeit items wind up at auction houses, whose research and well-distributed catalogues bring such crimes to light.
Late last year in England an octogenarian couple and their 47 year-old son were all tried for art fraud. The family of forgers admitted to a near twenty-year run of selling various museums and dealers "authentic" works of art, all of which had been in truth "knocked up in the garden shed." They had earned well over a million dollars, but by all accounts looked and lived like any other middle class British family. One of their unwitting victims was the prestigious Art Institute of Chicago, which had acquired a ceramic figure of a classical faun supposedly by the French master Paul Gauguin. In addition to conning the Art Institute, the fake statue fooled Sotheby's, where it had been sold in 1994.
Hamburg Germany's Museum of Anthropology also experienced a curatorial faux pas when their show, Power in Death, featured eight of the famous Chinese life-size terra cotta warriors excavated from a 2,000 year-old imperial tomb. Caretakers of the real terra cotta army in China, aware that they had not sent any figures out of the country, began an inquiry, which soon concluded the figures in Germany were fake. The show was closed and over 10,000 prior visitors will be getting their money back.
Oenophiles lost their reserve in 2007, due to ongoing investigations by the FBI into rampant wine fraud at unwitting wine auctions and dealerships. Eighteen magnums of a rare 1947 vintage recently sold, even though the French vintner had produced only five. In another case of note, four bottles allegedly owned by Thomas Jefferson and purchased for more than $500,000 were discovered to be bogus. Re-used bottles and high-tech publishing software for labels have aided counterfeiters in their efforts.
China, long known as a center for the production of reproductions, both legitimate and otherwise, has been in the spotlight of the Australian senate in 2007, as have India and Taiwan. The multi-billion dollar market in Australian aboriginal art is in crisis, due to knock-offs produced in these countries. Dealers in authentic objects are being forced out of business, say experts, as they cannot compete with these fakes.
EBay is known as the sale venue for an incalculable number of likely fake Gucci, Rolex, and similar items, but higher end artworks appear there as well. In 2007 a woman in Massachusetts allegedly used the online auction house to move forged artworks by Milton Avery, Franz Kline, J.M.W. Turner and Juan Gris. Subsequently, a dealer paid $200,000 for the forged Avery before the scam came to light. The case against the woman will be tried U.S. District Court in Manhattan.
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