The Art Auction Afloat
Continuing a Long Tradition of Piracy on the High Seas
by
David Phillips
Park West at Sea (the cruise line arm of Park West Galleries), Royal Caribbean Cruise Line, Carnival Cruise Line, Global Fine Arts, GE Money, et al.
There is something honest about the traditional pirate. The bandana, the eye patch, the hook where once there was an arm, the peg leg and the cutlass. The jolly roger (skull and crossbones) flying at the mainmast. At least you knew what you were dealing with. Bandits, murderers, thieves, looters and ne’er-do-wells, but visibly so.
When the pirates are dressed in suits – fast, smooth talkers, all criminal intent carefully masked under the guise of fun, entertainment, great business deals, and your interest at heart, and backed up by the most reputable of organizations – the subject of piracy takes on a much more sinister and dangerous air.
This second kind of piracy is the subject of this article. Or at least a couple of examples of it in action.
When you go to a casino to gamble you usually are aware, unless you are really dumb, that the odds are against you and that you stand to lose whatever money you have decided to spend. It’s a risk you take. Perhaps you think you can beat the system and win some money back but usually you know that you are kidding yourself. It’s rigged. Plain and simple. It’s a racket, but you are usually aware of this. If you wish to get involved in that game where the chances of winning are remarkably slim, you at least have been warned.
But when you go to an art auction on a cruise liner, promoted, encouraged and endorsed by a supposedly reputable cruise line company such as Princess, Royal Caribbean, Carnival, Celebrity and so on, you do not expect to be defrauded, cheated, robbed, sold items that are worth only a fraction of what you pay, given verbal representations which are then completely disregarded and disavowed by the auction company, tricked into financial arrangements that you cannot get out of, or other dishonest and criminal behavior.
My sincere hope is that you are reading this article before you attend one of these cruise line art auctions, not after you already have. If you read this article and still attend one of the cruise line auctions and get ripped off, then you deserve it. You will have been warned. And if you have bought art at a cruise line auction and are sitting there smugly thinking you got a great bargain, pluck up some courage and get an independent appraisal. At least you won’t have to wait till you go to sell it to find out to what extent you have been duped. You’ll know.
Case Studies
Since Fine Art Registry™ published its two recent articles about cruise line art auctions, Art on the High Seas Part I and Part II, many victims of cruise line art auction fraud contacted us and asked for help. We are continuing to hear from them. We will publish their stories here in hopes, mainly, that others will not follow in their footsteps and that enough public outcry will be generated that the authorities, apparently asleep on the subject, will wake up and put an end to the piracy, which is going on, on a very big scale, even as I write this article.
The stories are shocking. And they are plentiful. All you have to do is Google “Park West at Sea” or “Cruise Line Art Auctions” and your search will be met by a plethora of reports of people who have been ripped off at cruise line auctions. And even though the companies take what measures they can to silence these complaints, there they are in plain view. Here are just a couple. More will follow.
Fine Art Registry (www.fineartregistry.com) is not in the crime prevention business as such, but abuses in the world of art go very much against our grain and basic philosophy. Our purpose is to bring order to the world of art and to help create a climate in which artists, galleries, art buyers, collectors, museums and the general public can create and enjoy art in all its forms, free from fraud, deception and other criminal activities which debase the whole field.
Avery and Joyce Hershkowitz, Greg Schultz
Take the case of Avery Hershkowitz and his wife, Joyce, who hail from New York. They took a Celebrity Cruise to Alaska to celebrate their 25th wedding anniversary. They did not leave with any intention of buying art, but while on board they were exposed to the art auctions. Greg Schultz is a friend of the Hershkowitzes. He and his wife met the Hershkowitzes on the cruise and, like them, bought art from the Park West at Sea auctions. The story is best told by Avery and Greg:
Avery Hershkowitz
I walked by and saw a Peter Max, a painted over print, and loved it right away. I showed it to my wife and we said we really don’t have the money but we’ll just dabble and see what goes on. The auctioneer’s name was Justin Swisher. He came up and showed me on the computer what the price was supposed to be and said maybe we could deal on the side. He said it was appraised. I asked him who did the appraisals, someone who worked for Park West or an independent third party? He said the appraiser was not a member of Park West and had no vested interest in the appraisal. It turns out they are appraised by Albert Scaglione [Director of Park West, who also signs the authentications].
My friend, Greg Schultz, went on line on the Internet on the ship to research on Google but it takes three minutes to query back and forth at 75¢ a minute. It would have taken a lot of time and money. They’re on 75 ships and their credibility is there and it shouldn’t be.
I asked, “Who verifies this?” I can get my house appraised for $60 billion. I can appraise it myself. “Does he have any vested interest?” He said, “No, no vested interest. He’s not a member of Park West.” That was the whole key to this. That was the first part.
I was assuming the appraisals were normal and he told us they were not done internally, so we went under that assumption.
He did tell us the pieces were seriolithographs, not 100% original. My wife and I did understand this. They didn’t misrepresent the art so much as the value and the background of the art. The piece was painted over from a copy. Granted. But when I said, “Listen, what is the value?” He said, “Well, it’s been appraised by the appraisers for $14,000.” We still thought this was a valid, third party appraisal.
We hemmed and hawed and we got him down to $9,000. It was supposed to be $9,000 net. With all the fast talking that went on, we didn’t realize we were paying $9,500.
We agreed to let him use us, and it turned out it was a shill. They were going to put up our painting first, and I’d bid my $9,000 and they said, “It’s yours, don’t worry about it.” They used me. Fine, I knew they were going to use me. But I thought they were using me in a manner that was mutually beneficial. It wasn’t. They over marked the price and they sold me an appraisal that was supposed to be a third party appraisal for $35; they gave me two worthless posters that they represented as $650 works of art (available on eBay for $25) and wanted us to pay $300 to frame them. I said, “Get out of here, just send it in a tube.” I said, “I’m not spending $300 on these things, if you want to send them to me, fine.”
Now comes the next key part: about paying for it. This was the first painting we bought. My wife has a perfect credit score, never late, never not paid, so I insisted that the credit card go under her name. I said, “Only her name should be on this thing. It’s her Social Security number, it’s hers, I just want her name on it.” I trust her more in terms of money decisions.
We signed for it. There were plenty of mistakes but we didn’t see the bill till later. We didn’t look at it. We thought it was what we agreed to. We had no idea on the third party appraisal and everything. They never showed us the terms of the contract on the back of the invoice. I would never have agreed to that.
They said, “You have to come back for the free auction. You have a lot of tickets.” They said, “You have tickets for every $100 you bought. You have 95 tickets. You have to come back for the second auction. You get $500 off your next purchase.”
I pride myself on being a street smart New Yorker and now I look back and hindsight is 20/20. Of course, they want the guy who spends the big money to win because they’ll be apt to spend what they win on another painting. Lo and behold I won. I’m not saying it was rigged. I don’t know if it was rigged. But it was to their best advantage to have me win.
All right, I won a prize. They said, “It’s another Max. It’s valued at $4,800; we’ll give it to you for this price.” Again they overcharged for it. I knew I would be a little tipsy from the champagne they gave me. I said before, “I’m not authorized to sign for this.” I told them, “Only my wife is allowed to sign for any purchases. It’s her Social Security number.” They said, “Don’t worry about it, don’t worry about it, don’t worry about it. Sign it.” Wow! What a great deal. Just got a new issue Peter Max saving all this money and an extra $500 from the drawing. It sure didn’t turn out that way.
The assumption that the cruise lines are backing this up is so key to this. It’s on their TV, it’s in their brochures they hand you every day. It’s only a logical assumption. That lent them a lot of credibility and that to me is the ultimate problem. I wouldn’t have looked at it otherwise. That and the free champagne they were serving really can affect your judgement.
The second bill was a total fraud. The overpricing, the shipping charges are $190 extra that was never mentioned. I got this bill in a hurried manner. This guy Justin is a smooth talker. When I went through the bill when I got home, there were charges here I never heard of. Shipping and handling. In transit handling. What is that? Another $100.
I got home and spent half a night on Google, looking them up. Right away I called up the Park West credit card. The name on the card is not even close to being right. I cancelled it. I have not paid for the stuff, and have ordered it not be shipped.
The paintings they gave me for free they added shipping charges equal to the value of the paintings.
What really bothers me about the cruise line part of it is that they put out no disclaimer about their connection with the auction.
It amazes me that no one has gone back on a cruise and handed out pamphlets. No one would walk into their auction. They misrepresented it. Then they added the false value. I looked on eBay for comparable paintings. These poor schleps can’t get $2,500 for things they paid $11,000 for that were appraised at $14,000.
Before doing business, I said, “My friend went on Google for two minutes and said there were a lot of complaints about some of the things you do.” The auctioneer said, “They’re all shipping related and you’re bound to have bad blurbs with the thousands of customers we deal with.” He downplayed it completely. He denied it completely.
I’m sure they had shills in there. They kept giving $50 gifts to people who shouted and hollered when they won. I knew inside something wasn’t right. If these paintings were so valuable, how did they come to have so many of them?
I’m calling them and telling them I’m refusing shipment, closing my account and refusing to discuss it other than through an attorney and to contact me only through my attorney.
Greg Schultz
Greg Schultz and his wife are from Vancouver, BC, and are friends of the Hershkowitzes. They were on the same cruise. They bought two pieces of art by Peter Max for close to $20,000 from the same auctioneer.
We went in and there were some Peter Maxes. Our friend Avery knew Peter Max’s paintings really well. We had a couple of places in our house we wanted to put some nice pictures.
Avery had already purchased one. We went in and talked to the auctioneer, Justin Swisher, and found a couple of paintings that we liked, two different variations of Umbrella Man. We had been on a cruise a couple of years ago and bought a cheap painting through the auction, but when we received it the frame was all banged up. I phoned in and complained and they said, “Well that’s how you bought it and blah, blah, blah.” It wasn’t even worth pursuing because it was kind of a joke anyway. I told the auctioneer I’d come across some stuff on the Internet about different issues with Park West and he assured me that everything was on the up and up and they had independent appraisers and so on. I asked him, “How are these valued?” One was selling for $8,000+ and the other one was $9,000+ and they were each appraised at over $12,000 and, according to him, by independent appraisers. He assured us that they were originals and not copies, and showed us the differences between the two.
He told us they were originals, painted and signed with the “Max” in the paint. Not limited edition prints. He told us Max signs the limited edition prints in pen at the bottom, whereas the originals are all signed in the paint that it was painted with. That’s how you can tell if they are originals or prints. We purchased Umbrella Man and Umbrella Man with Cane, 2006. We paid $9,345 for one and $8,880 for another, and then shipping and handling and all this other crap. So the final bill is $18,682.25 US.
When we got back home again, both Avery and myself came across all this stuff on the Internet about Park West again, and it was obvious we had way overpaid for these items we bought. Comparable items were selling for $2,000-$3,000 maximum.
I came across some different Umbrella Man paintings on the Internet and couldn’t find these exact ones. Now for all I know, there’s thousands of these and there can be different variations. It can be the exact same painting and the guy was maybe giving a thumbs up in one and in the other was giving a thumbs down, or maybe the hat was black in one and blue in another. That’s how they can get away with saying they’re original and different.
Basically Avery was lucky. He purchased through the Park West/GE Money credit card and just refused delivery and payment.
But unfortunately for us, being Canadian, it was all done through our credit card. So it’s a done deal and nothing we could do about it. I haven’t received them yet so can’t get them appraised.
I did snap some pictures of the actual paintings because one of the complaints on the Internet is that people were shipped the wrong items.
The auctioneer assured us that the paintings they send us will be the ones we bought.
On top of that, Justin Swisher gave us an invalid e-mail address. He told me, “Hey, you have any questions” (there was another painting we were interested in) “contact me and we can make arrangements for that.” I tried to e-mail him and it’s an invalid e-mail address. He gave me a fake e-mail address on top of everything else. And it’s written right here in his handwriting on this invoice.
The sick part about this whole thing is apparently the cruise lines know all this stuff is going on and they’re letting it happen. I’ll never go on a Celebrity Line again. They’re condoning and endorsing it.
One of the biggest things is that he very clearly stated that all the appraisals are done independently and it wasn’t in-house. And now we find out it’s all in-house. They’re all signed by Scaglione himself. That’s illegal as far as I know.
We were just 100% misled and assured of the validity of the appraised value and all that sort of stuff.
When we told them what our maximum was, he was sure able to juggle the numbers around pretty good.
(A few days later, Avery called me and said that the credit card which had been issued in a wrong name and which he had cancelled had been reinstated by Park West with charges of $15,000 put on it by them. Apparently the Park West/GE Money special card has some clause in it about not accepting disputes if the deal was made more than 100 miles from your home. Packages continued to arrive at his front door even though he called and said he was not accepting any shipments. He sent them back. He received the usual form letter from the Park West lawyers in Miami, Coffey Burlington, saying he would not be getting a refund.
He has been posting his story on the forums and has a sign up in his yard advising passersby about the Park West experience. He has refused Park West shipments and is working with his lawyers to cancel the deal.)
Greg has resigned himself to the purchase, knowing he was misled completely. Fortunately he likes the artwork. He has some hope that when Peter Max dies (he is 70 now) the artwork will increase in value, something that was pushed several times on the ship.
That is Avery and Joyce’s story, and Greg and his wife’s story in a nutshell. We can examine the fine print on the invoices and so on and will do so in a separate article.
What do we learn from all of this?
Well, these cases raise all the points that make the cruise line art auction pirates what they are:
- Although the terms of sale (very unusual terms of sale) are in writing on the papers, no attempt was made to have the buyers actually read these terms before signing. They didn’t even notice that there was the fine print on the reverse of the invoice. This seems to be quite usual in all the cases reported. The auctioneers take advantage of the carnival spirit in which the auctions and sales are carried out.
- Wild, false misrepresentations (lies) by the auctioneer about the value of the piece, the fact that they could send it back if they didn’t like it and about the artwork itself. Of course, the cruise line auction company is not responsible for this. Park West, for example, state clearly on the invoice that only written representations are valid. Nevertheless, the auctioneers are Park West employees and they are trained by Park West, probably to behave exactly the way they do behave. Why else would it be so similar from auctioneer to auctioneer, (at least the ones we have heard about)? To hold up your hands and say, sanctimoniously, “Oh, I’m sorry, we have so many auctioneers we can’t possibly control their behavior and stop them from lying to customers,” when you have carefully taught them to tell just those very lies and assured them they will be protected by the clauses in the contracts, is about as slimy as you can get.
- Then there is the riding on the reputation coat tails of the cruise line. The cruise lines seem to be in on these scams up to their necks. If they weren’t, Park West at Sea and Global Fine Arts and so on would be made to walk the plank en masse and the cruise lines would find some more honest and reputable merchants for their passengers’ entertainment. The fact that the cruise line companies look only at their short-term profit and what they can get away with will eventually turn around and bite them in their fat posteriors but they possibly don’t see that. It must get clouded over by those dollar signs and the legal jargon of their overpaid counsel.
- The financial arrangements. GE Money credit card specific to Park West so that they can do their deals without the hassle of having to argue with credit card companies when their customers dispute their claims. Who knows what arrangements the two companies have but they must surely be geared towards lining their own pockets at the expense of the onboard art buyer.
Park West claims “millions of satisfied customers.” Yes, large numbers of cruise line passengers who don’t know the difference between Salvador Dali and the Dalai Llama have gone to the auctions for some fun, seen some decorative prints that they liked the look of, spent a few hundred or even a couple of thousand dollars, received the piece(s) and hung them in the living room at home and never questioned the value or discovered that they could have bought the exact same print for a fifth of the price on shore, and continued to be delighted with the cruise line auction they attended.
The trouble seems to start when the cruise line art auction people get too greedy and their overpriced, misrepresented pieces get into the serious $10,000, $20,000, $30,000, $40,000 and above price range and are sold for investment purposes. The buyers of these pieces look them up when they get home. They find the exact same piece they paid $40,000 for is selling for $3,200. Heck of an investment.
Perhaps if the cruise line art auctioneers had been satisfied with petty piracy (if there is such a term), they would have remained in the same bracket as casinos and bingo halls where you know you are throwing away your money but you don’t care.
How Not to Be Conned – Do’s and Don’t’s
Here are some guidelines.
1 If you want to have some fun at an art auction on your cruise, spend some money, pick up some prints that you like the look of and don’t care if they are overpriced or you could get the exact same items much more cheaply at home, then by all means go to the cruise line art auction and play the game, spend your money and get what you get. Don’t look up the price when you get home. Just hang the pieces and remember the fun you had on the cruise.
2 Don’t EVER do serious art buying at a cruise line art auction. NEVER. DON’T. It will be a bad decision and you are very likely to be ripped off and regret it ever after. Cruise line art auctions are NOT the place to buy serious, investment art. If they were the bargains they are claimed to be, why aren’t reputable dealers and auction houses buying from them? DON’T kid yourself. If you want to invest in art, do A LOT of research, go to reputable auction houses and dealers and don’t mix the cruise line carnival-vacation atmosphere with serious art investment. They do not belong together. For a start, who would put his money on a piece of art which has been “authenticated” and “appraised” by the very person or group that stands to benefit from a twisted authenticity and a grossly over-inflated appraisal?
3 Don’t be fooled by the fact that a supposedly reputable cruise line is condoning and encouraging the art auction. In at least one case on record the auctioneer used a member of the Royal Caribbean cruise line to vouch for the honesty and repute of Park West to help close the deal. Or by the fact that a supposedly reputable company (GE Money) is providing a special credit card to help Park West perpetrate these deeds. There is so much money involved and all these players get their cut. It’s unfortunate but the facts are the facts and the evidence is inescapable. Don’t fool yourself. The cruise line management and the credit card facilitators are in on the deal. Don’t fall for it.
4 READ ANY AGREEMENT BEFORE YOU SIGN ANYTHING, ALL OF IT, EVEN THE SMALL, GREY, COVERT PRINT ON THE BACK. Understand what you are signing. The Park West contracts and literature are jammed with escape clauses. “All sales are final” is just one small clause. 15% Buyer’s Premium will be added. A 1% in transit fee will be added. “No verbal agreements or representations shall be of any force or effect unless set forth in writing by the seller in the invoice” is another one that covers up a multitude of sins. Read it all.
5 DO NOT LISTEN TO ANY VERBAL REPRESENTATIONS ON THE PART OF AUCTIONEERS AND SALES PEOPLE. DO NOT TRUST A SINGLE WORD THAT COMES OUT OF THEIR MOUTHS. They are protected in any lie they care to tell, any wild fantasy they decide to invent, by the fine print on the contract you sign which immediately invalidates anything anyone says to you that is not in writing. If something that one of these people is saying to you is important to you, then ask them to put it in writing on the invoice and sign it. See what happens.
6 READ THE APPRAISAL AND SO-CALLED CERTIFICATE OF AUTHENTICITY AND THE “GUARANTEE” THAT GOES WITH IT. For example, the certificate of authenticity (the ones I have seen have all been signed by Park West director, Albert Scaglione, who is an engineer by training, not an appraiser or art specialist) only guarantee the original author of the piece. This is carefully stated on the back of the invoice but its meaning is not explained. For example, a “Rembrandt etching” certificate only guarantees that the original image was by Rembrandt. The fact is that the print is not by Rembrandt at all. It’s pulled from the original plates by some johnny-come-lately in the last decade or two and has been so worked on that it is so far removed from anything Rembrandt ever touched that it’s laughable. But the certificate is very impressive. The appraisals are all done by Park West appraisers and again, signed by Scaglione. Read the fine print and it states that Park West doesn’t answer to anyone on its appraisals. It’s their opinion and they don’t care who says what or what evidence exists to the contrary. They charge $35 for an in-house appraisal that sets a price on each of their pieces which is way above what it’s worth (often 10 or more times the actual value on the market) and the fine print on the forms covers them in case of flashback.
These are the things which have enabled Park West, Global Fine Arts and other cruise line art auction companies to get away with charging prices which are four or ten times what the pieces they sell are worth in the real art market and not refund the money when the buyer finds they have been duped and ripped off.
These are the clauses that have resulted in the company having an annual income “approaching $500 million”. Compare the income to the worth of the items delivered and the math is just horrendous.
From Park West – Silence
While writing this article, I called Park West’s PR Coordinator, Kristin Berry, on September 7, 2007, and told her I was writing an article following complaints we had received about Park West at Sea art auction rip-offs (see the 31 August Park West post in the FAR forum here). I told her I wanted Park West’s input on this so that the article was fair and gave both sides of the story. I gave her a list of questions I had and told her I would like to speak to Mr. Scaglione and also to one of the auctioneers involved.
She politely listened, noted my questions, and said she would get back to me and arrange to have me talk to people who could provide information in answer to the questions I had. The entire phone conversation was recorded.
I have, to this date, not heard back. I cannot hold up publication of this article any longer but will be happy to consider any information I am sent by Park West in answer to the allegations.
Meanwhile, we will continue publishing the case studies we have. The pile is growing every day as victims find out about our investigation and provide their own stories. Some of them are quite gruesome. Some of them are from lawyers who are not taking the rip-off lying down.
Final Word
Today’s pirates wear suits, speak enthusiastically and persuasively, promise the earth, work in collusion with the “highly respected and reputable” cruise lines and credit companies AND ROB YOU BLIND.
Our advice is to steer clear of the cruise line auctions unless you want to have some fun and spend some money and don’t care if you are ripped off. When it comes to investment in art and major purchases, this is not the way to go.
You can find much useful information on the subject of art and collecting at www.fineartregistry.com. We hope it will help you enjoy art and collecting, free from scams and frauds, which only make it a nightmare.
(We have a number of case studies and are accumulating more daily as people contact us for help. They are too long and too many to include with this article. We will be publishing them individually over the next period of time and doing full justice to each.)
— David Phillips
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September 21, 2007
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