Navigating the Art World

Navigating the Art World

Avoid buying fakes and forgeries

One of the biggest international news stories of 2013, and the most shocking scandal in the art world in recent history was, undoubtedly, the forgery lawsuit at Knoedler & Company (Knoedler) gallery in New York City. 

In 2011, Knoedler, the oldest commercial art gallery in New York, suddenly closed after more than 165 years in business. We now know the closure was the result of a complaint from London-based hedge fund manager, Pierre Lagrange, who bought a “Jackson Pollock” painting from Knoedler in 2007 for $17 million. In 2011, Lagrange conducted a forensic test on his painting, which Knoedler representatives told him was a lost and rediscovered masterpiece. Test results revealed that the painting contained a yellow paint pigment that wasn’t commercially available during Pollock’s lifetime. Lagrange requested a refund from Knoedler, and less than two days later, the doors of the esteemed Upper East Side Gallery were locked for good. 

Over the course of the next two years, more complaints from Knoedler customers arose. Last summer, multiple news sources reported that over a period of 15 years, art dealer Gloria Rosales sold at least 40 forged paintings and drawings, totaling more than $80 million in sales for Knoedler, to dozens of innocent victims. Many of these artworks, allegedly painted by post-war masters, including Pollock, Barnett Newman, Robert Motherwell and Richard Diebenkorn, were actually created by Pei-Shen Qian, a little known Chinese artist who produced imitation masterpieces from his former home in Queens, New York. In
October 2013, Rosales pled guilty to nine counts, including wire fraud, money laundering and tax evasion. 


Other Examples

Although the Knoedler case has dominated recent press coverage of art forgery, it’s not the only example. In December 2013, three art historians came forward stating that a Chinese calligraphy scroll purchased by a Shanghai collector at auction in New York in September of that year for $8.2 million, was forged. In July of 2012, federal investigators seized more than $20 million worth of art from New York dealer Subhash Kapoor, who sold and donated purported Asian antiquities from a Madison Avenue storefront. Christian Parisot, the president of the Modigliani Institute in Rome, was arrested last year for allegedly knowingly authenticating forged works.

Ironically, forged art has created such buzz in recent years that it’s garnered attention as an attraction worth viewing. The Center Gallery at Fordham University Lincoln Center presented an exhibition last summer titled “Caveat Emptor,” which was made up entirely of forged artworks confiscated by the Federal Bureau of Investigation. Another exhibition titled “Intent to Deceive: Fakes and Forgeries in the Art World,” includes paintings imitating work by Johannes Vermeer, Henri Matisse, Paul Signac, Modigliani and more. This exhibition will be on display at Springfield Museums in Massachusetts, the Ringling Museum of Art in Florida, the Canton Museum of Art in Ohio and the Oklahoma Museum of Art in 2014.  

While it may certainly be interesting to see how close forgers can come to replicating masterpieces by famed artists, when it comes to seriously buying art as a passion or financial investment, no one wants to take home an inauthentic piece.


Get Objective Consultation

The Knoedler scandal and other recent cases of art forgery underscore the importance of seeking objective consultation before investing in a work of art. Although respected art galleries generally employ knowledgeable sales representatives, because of gallerists’ and dealers’ vested interests in the sales outcome, it’s impossible for them to serve as totally unbiased consultants when it comes to making financially savvy purchasing decisions.

Thus, if your clients are considering purchasing art, it’s critical to consult an objective, third-party expert. Such a consultant should advise on condition, price, authenticity and quality of potential acquisitions. A good art advisor will seek counsel from multiple third parties on these topics. In terms of authentication, this may mean soliciting formal opinions from the artist’s foundation, if one exists, and academics, in addition to examining the work in person. Purchasing art, which in today’s booming art market can mean transactions into the hundreds of millions of dollars, should be handled with great care and attention to detail. Just as a sophisticated buyer would consult multiple specialist sources before making a substantial purchase in stock or real estate, any individual purchasing art—whether a first-time buyer or a seasoned collector—should seek objective opinions from art market specialists to ensure he’s choosing a work of art that will prove to be sound financial investment.