Biggest Scam in the Art World in a Century: Greed shows it’s teeth

by Kim Steele

Charles L. Knoedler (1863–1944), the youngest son of Michael Knoedler, at the gallery's fourth location, a rented brownstone at 170 Fifth Avenue and 22nd in New York, Getty Images photograph

Charles L. Knoedler (1863–1944), the youngest son of Michael Knoedler, at the gallery’s fourth location, a rented brownstone at 170 Fifth Avenue and 22nd, in New York, Getty Images photograph

 

Forgery is not an offense under the law of Scotland, but here in the U.S. it has caused quite a stir. The distinguished Knoedler Gallery in Manhattan has shuttered it doors after one hundred and fifty years. Knoedler dates its origin to 1846, when French dealers Goupil & Cie opened a branch in New York, as a dealer in Old Master paintings. Michel Knoedler purchased the New York branch in 1857. Armand Hammer purchased the gallery for $2.5 million in 1971 and held onto it until this scandal closed the doors in 2011. It has peeled back the often opaque veil that hides the dynamics of multi-million dollar art sales shifting hands in the auction houses, Christies and Sothebys. Knoedler was New York’s oldest gallery.

The forgery scandal netted Knoedler $37 million; and Knoedler president Ann Freedman, $10 million.

 

Ann Freedman, former Knoedler Gallery President

Ann Freedman, former Knoedler Gallery President

 

 

 

 

 

Ann Freedman, resigned in 2009 after numerous allegations that Knoedler paintings were fakes. The most recent court settlement involved the Long Island art dealer Glafira Rosales, regarding an untitled Rothko painting dated 1956, determined to be a forgery, which was purchased for $8.6 million.

 

Mark Rothko forgery, by Pei-Shen Qian

 

Allegations arose claiming they had passed off more than thirty fakes of major artists including de Kooning and Pollack. The source of the impostors was Rosales, consigning to the gallery works that were allegedly from a mysterious collector based in Mexico City.

When in fact, they were all painted by a Chinese immigrant in Queens, NY, Pei-Shen Qian. Other dealers involved in the swindle – brothers Jose Carlos (Rosales’ boyfriend) and Jesus Angel Bergantinos Diaz, were awaiting likely extradition proceedings after being arrested and bailed in Spain. They were the conduits for Qian’s work to Rosales to Freedman. Qian was discovered by Rosales and the Bergantinos Diaz brothers selling artwork on the streets of New York; he began his bogus career by forging Keith Haring and Jean Michel Basquait’s work, which the brothers sold to galleries. Qian was paid a few hundred dollars early on, and up to ten thousand by the end, for his work. Over a period of 15 years, court papers claim, the painter, working out of his home studio and garage, churned out at least 63 drawings and paintings that carried the signatures of artistic giants like Jackson Pollock, Barnett Newman, Robert Motherwell and Richard Diebenkorn.

 

Jackson Pollock forgery, by Pei-Shen Qian

 

Little is known of this missing forger. He exhibited in several shows in China, displaying a daring experimental penchant. Abstract Art was considered ‘decadent’ back in the 1980’s.

In 1981, Qian moved to New York, where he and his friend Zhang Hongtu took art classes together at the Art Students League, on West 57th Street. “He told me how to make a living over here,” Zhang said. Zhang has been charged by Federal authorities with fraud, conspiracy and money laundering.

The Bergantinos Diaz brothers and Rosales are accused of faking detailed backstories of the paintings, and falsely claiming to represent clients in Europe. Rosales pleaded guilty to nine criminal charges in September 2015, and faces up to 99 years in prison when she is sentenced later this year. She was also ordered to forfeit $33.2 million in property and wealth and may face further penalties. An official from the Spanish interior ministry told the New York Times last week that, after he was arrested at a hotel in Seville, Jose Carlos suffered an anxiety attack and was hospitalized.

The brothers are charged with conspiring to commit wire fraud and money-laundering. Jose Carlos, who lived in New York, is also accused of defrauding the IRS and filing false tax returns to hide more than $7 million in income from the scheme.

 

The garage in Queens where Pei-Shen Qian created his forgeries

The garage in Queens where Pei-Shen Qian created his forgeries

 

 

However, prosecutors could only say that Qian, who previously lived in Queens with his wife, was “believed to have been re-located in China,” which has no extradition treaty with the U.S. There is very little chance that China will turn over a citizen.

 

Pei-Shen Qian at work in his studio, in Queens, NY

Pei-Shen Qian at work in his studio, in Queens, NY

 

Interviewed in 2013, in Shanghai by Bloomberg News in December last year, Qian said that he was the innocent victim of a “very big misunderstanding” and had never intended to pass off his paintings as the genuine works of modern masters. “I made a knife to cut fruit,” he said. “But if others use it to kill, blaming me is unfair.” He claims to have profited very little from the forgeries, in fact he offered to show is meager bank account as proof.

Ms. Rosales has already pleaded guilty, but buyers, the De Soles family, are pursuing Freedman for $25 million claiming she knowingly sold forgeries, ignoring obvious signs of fraud for her personal gain. Freedman claims they should have seen the red flag, the judge has ruled that she, “acted with fraudulent intent.” In fact, one Pollack had a misspelled signature on the painting, “Pollok.” Freedman asserts she was also swindled for three expensive paintings herself, and that reputable authorities verified their authenticity. A number of very prestigious experts were called into the case, including JAMES CODDINGTON, CHIEF CONSERVATOR OF MOMA, and Laili Nasr, curator at the National Gallery of Art in Washington, D.C. who confused the authenticity of the paintings.

Early on, there were warnings on in-authenticity. Freedman was forced to repay $2 million to a collector in 2003, when caught as chronicled in a foundation’s report.   Five cases were settled out of court and four more are ongoing. February 10, a settlement was reached with the De Soles, for an undisclosed amount, though their attorney said they were “satisfied.” The case turned on Freedman’s usage of expert testimony from people who were not authorized, like that from Christopher Rothko. The provenances were misrepresented. The prices were unrealistically low as well. There seemed to be greed exercised by all parties. Smaller government indeed!

Ms. Freedman has since opened up a new gallery, Freedman Art, showing Frank Stella at this time.  Surprisingly, she has not yet been criminally prosecuted – yet.

Update: Jose Carlos Bergantinos Diaz has been extradited to the U.S.

 

Robert Motherwell forgery, by Pei-Shen Qian

Robert Motherwell forgery, by Pei-Shen Qian

 

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