Fake it ‘til you Make it – Land in Prison

Published  by Monin UNG on 9 Mar 2020

 

 

High-priced and one-of-a-kind paintings are involved here, Pablo Picasso’s “Buste de Femme” and “Le Clown” Marc Chagall’s “Reverie” and “Bouquet de giroflées”, “Calanque de Canoubiers” by Paul Signac, all fallen prey in deception rings orchestrated by the following:

 

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London Art Dealer Timothy Sammons, an ex director at Sotheby’s, was sentenced in 2019 to 12 years in prison. For at least 5 years, Sammons was misleading artwork owners about status of sale, using the realised profits for his own gains or pledging the paintings which were entrusted to him as collateral for personal loans. Judge Scherzer commented that the former dealer “refused to take responsibility or express remorse” and the case was extremely serious and disturbing. Losses caused by his lies and defrauding schemes were in the range of USD10-30m.

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London Art Galleriest Ezra Chowaiki maintained a high end art gallery to network with wealthy clients whom he defrauded as investors and consignors. He did this by alluring investors into sending him money to purportedly purchase artworks for resale at a premium. Instead, he was using the funds to pay off the gallery’s mounting debts. Further, Chowaiki would use artworks held by the gallery on consignment as collateral to secure new loans, or in satisfaction of existing, defaulted loans. Chowaiki sold USD10m worth of artwork he did not own and his criminal acts landed him a 18 months prison sentence in 2018.

 

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London Art Dealer Inigo Philbrick went missing in 2019, amidst pending litigation suits claiming millions being unaccounted for. His father, Harry Philbrick, headed up the Aldrich Museum of Contemporary Art in Ridgefield, Connecticut, from 1996 to 2010. Aggrieved parties, some very prominent figures in the art world, are now finding out the ugly truth of how Philbrick pocketed undisclosed profits and triple sell the same artwork to trusting buyers.

 

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With or without the culprits’ participation, the pain and agony continue for vested parties entangled in expensive cross border law suits, frantically uncovering and freezing of assets, tracing of title and definitely complicated disputes over who owns what.

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Should title rest with the one who bought the artwork in good faith and without knowledge of third party’s prior rights? What if there are three such ones? What about the person who loaned cash against the artwork as collateral? Which competing rights should be restored?

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How does one become wiser to avoid the shenanigans peppering an unregulated art market?

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There are certain patterns with the culprits, they are likable, appear knowledgeable, maintain an intentionally and outwardly lavish lifestyle, and put up a posh business front. Add on the promises of quick flips and lucrative future profits, even the business savvies became blindfolded with a false sense of hope.

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True enough, friends and business associates had “suspicions”, felt that “things don’t add up”, but still cut them slack by allowing them to stall, buying into flimsy lame excuses and giving them time to widen and deepen the deceit circle. Red flags were ignored.

 

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Basic verification steps such as provenance paperwork, fact checking, title insurance, proper consignment agreement, enforce-ability of payment deadlines, personal resources checks were not performed.  

 

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In short, bad actors and poor decisions all round.

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