The Importance of Reporting Art Crime and Art Fraud

When things go wrong with an art deal they really go wrong and it's difficult for many to admit that they have been a victim of an art scam or crime. Many are embarrassed that they didn't know better or convince themselves that they should have seen it coming. After all, only a glutton for punishment would openly admit that they have been suckered, ripped off, bamboozled, gypped, robbed, flimflammed, swindled, or victimized, right? It's not a pleasant feeling when you discover that you have been fleeced and fleeced hard and it's hard to know where to turn or what to do. Let me be the first to say that suppressing or hiding the fact that you have been victimized for fear of embarrassment, shame, disappointing family members or for any other reason does not help the situation and in fact compounds the problem. Being duped or victimized happens to all of us at one time or another and it happens on a regular basis in the art industry.

The world of art is completely unregulated. It is estimated that art crime or art fraud is the third largest grossing crime in the world behind illegal drugs and illegal arms trafficking. The fact that the vast majority of people don't report art crime and art fraud and law enforcement's lack of resources and interest on a local level only emboldens the art criminal to commit more and more crimes and fraud simply because he knows that little if anything will be done about it. It is a fact that the illicit art industry banks on the fact that you as a victim will not report the crime. If the crime or fraud is not reported, it is just business as usual. And so art crime and art fraud continues to escalate out of control and especially as the Internet and the global markets continue to expand exponentially.

Reporting art crime and art fraud can be as simple as contacting Fine Art Registry® and letting us know your story. At Fine Art Registry we understand how art crime and art fraud works and how it is that people find themselves in these situations and we do all that we can to help while respecting the privacy of the individual that is reporting the crime or fraud. We will help direct you to the appropriate law enforcement agency or other entity that may be able to help you with your dilemma. Of course, there are varying degrees of art crime and art fraud. With some exceptions, every case is unique. It is important to understand that in an unregulated art industry there is no such thing as black is black and white is white - there are many shades of gray and many facets to art crime and art fraud. There are things that can be done to curb art crime and art fraud, but it starts with the victim reporting the abuses.

Indeed, it is embarrassing to admit to yourself much less to anyone else that an intelligent, fairly educated human being, one that seemingly should have known better, let a smooth talking con with a thick foreign accent lure you into thinking that what you purchased for thousands, tens of thousands or even multi-millions was authentic only to discover soon after the deal is done that the artwork is anything but authentic. This is especially true when dealing with artwork on the secondary market which is visual art offered for resale typically by galleries, art dealers, auction houses, individual collectors, and on rare occasion by the originating artist who created the work. Collecting work on the resale market is rewarding and can be an excellent way to build an impressive portfolio. However, there are serious pitfalls to consider before buying, selling, or trading in the resale market and pitfalls to consider in the contemporary art market too where original works of art, prints and/or multiples are being sold by unscrupulous dealers and galleries. Even the most sophisticated buyers and sellers get ensnared in traps they could have happily avoided if only they did a bit more research.

I have talked with many, many victims of art fraud and art crime over the last decade or more (some of them professionals in the art market for decades) since Fine Art Registry came into existence. What I have learned is that many of the victims I have interviewed admit that they failed to listen to that small inner voice - that "gut feeling" that told them that something was wrong—that perhaps the deal was too good to be true. It is the voice of discernment - the voice of reason. When it comes to the unregulated art industry it is critically important to open your mind and your eyes—to ask questions, to discern whether there is any logic to what is being represented by the one who is to gain from the transaction. If you don't know the questions to ask, search for a reliable professional that does and have them ask the questions for you. You know the old adage, if it sounds too good to be true, it usually and probably is. The warning signs are always present, we just have to be willing to take the emotion out of the deal and to see reality. You can want with all your heart to believe that the painting or drawing or sculpture you purchased is genuine and authentic. But the unvarnished truth is many want to believe so badly that they ignore the fundamental gut instinct - the warning signs that something isn't or wasn't quite right.

There are numerous "consultant" predators on the web these days and in the unregulated art market, they proliferate. For example, someone somewhere right now on the Internet is getting scammed by the latest so called "expert" or "consultant" ready to help with "authentication" for a great big fee. No guarantees, of course. Fine Art Registry was involved with just such an investigation into a so-called "forensic" expert.

After you write the check or hand over the cash for the purported masterpiece you just purchased, the flimflam art dealer gives you a nice friendly pat on the shoulder and heartily congratulates you on your brilliant million-dollar find! You would have been better off jumping in your car, driving to Vegas and putting the same money on the Roulette wheel. Believe it or not, your odds are infinitely better in Vegas.

A brilliant forensic expert in Brussels once said to me that to obtain a recognized certificate of authenticity for an important work of art such as Picasso, one must pay the "French mafia" [his reference, not mine] a percentage of what the art object would be worth once "authentication is achieved." In other words, in order to receive a bona fide authentication certificate, a percentage of the price that the work of art would bring at auction or other private sale would be paid to the one certifying the work. It's a large rebate or kick-back of sorts to the one who performs the "authentication," the one who with a slight of hand can turn what was once an anonymous, insignificant painting, worth a few hundred or a few thousand dollars one minute, into a 30-million dollar goldmine the next. While this happens on the rarest of occasions, the majority of instances end up disastrously, with many art owners left broke, bewildered and bitter.

It is the ease of which visual art is sold and exchanged that makes it an attractive trap for the unwary. No data, no record, no liability. Predators, those that actively commit fraud, rely on collectors and artists that don't bother to look beyond the obvious. If you're going to buy art, buy it because you like it with not a thought for how you might profit from it in the future and certainly not because the seller says he thinks it's by Jackson Pollock or Andy Warhol or Edvard Munch or some other deceased "rock star" artist with the hope of getting it authenticated and making millions on the deal. We all know that fakes and forgeries flood the market these days. Take the time to investigate. Ask the question: Is it too good to be true?

The permanent registration of visual art and all objects of value has never been more important to protect against forgery, theft and fraud than it is in today's global art market. It all boils down to accountability.

The bottom line: If you believe you have been the victim of art fraud or art crime or any crime dealing with art, antiques, valuables or other collectibles, don't hesitate to report it. Fine Art Registry is a great resource. We encourage everyone to become involved in solving the rampant problem of art crime and art fraud.

— by Theresa Franks  |  September 22, 2010

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