NEW YORK - For those who have not been following closely, a series of lawsuits have been initiated against the once-venerable Knoedler Gallery, alleging that Knoedler Gallery and its employees and owner, Michael Hammer, knowingly sold fake works of art to unsuspecting buyers for tens of millions of dollars. The works were purportedly by leading Abstract Expressionist artists, including Jackson Pollock, Mark Rothko, Willem de Kooning and Robert Motherwell, among others. The works allegedly came from a “Private Collection” which had been inherited by the children of a collector who purchased the works directly from the artists’ studios with the help of an agent (identified sometimes as Alfonso Ossorio and other times as David Herbert). Knoedler, through Ann Freedman, refused to identify the owner to buyers under the pretense that the owner had demanded secrecy, though it assured buyers that the identity of the “private collector” was known within the gallery.
In May 2013, Glafira Rosales (a previously unknown person to many in the art world who was responsible for bringing the forged works to Knoedler) was indicted by the Government for a variety of crimes including tax fraud and, later, wire fraud stemming from the sale of forged works of art. Rosales eventually pled guilty and currently awaits sentencing.
Following the decision of Judge Paul G. Gardephe on September 30, 2013, in which the lawsuits filed by several purchasers of fake paintings from Knoedler Gallery were largely upheld, several recent developments have taken place that are likely to impact the resolution of the cases. In addition to the filing of four more lawsuits against Knoedler Gallery, Ann Freedman, Michael Hammer, Glafira Rosales, and others (bringing the total number of lawsuits filed against Knoedler to ten), on March 31, 2014, the United States Attorney for the Southern District of New York “unsealed” a new indictment against the now-identified forger, Pei–Shen Qian, and two other co-conspirators, Jose Carlos Bergantiños Diaz and Jesus Angel Bergantiños Diaz. With the inauthenticity of the works no longer in doubt, it remains to be seen if the Government will indict anyone else for their role in the sale of these forged works (the unsealed indictment notes that the sales of the forged works “proved to be lucrative” to the galleries that sold the works to unsuspecting purchasers).
While the impact of the Knoedler scandal will likely have repercussions on the New York art market for years to come, it highlights one of the risks that art purchasers should now be aware of. While maintaining the confidentiality of sellers is an accepted part of the art world, the Knoedler case highlights the importance of actually knowing the identity of the consignor. While auction houses like Sotheby’s always have a contract with a consignor (and can identify the consignor in the event that such identification becomes necessary), Knoedler assured purchasers that it knew the identity of the “private collector” when it obviously did not (as such a person never existed). Purchasing through a trusted source that has vetted the consignor is crucial in the event that an issue arises with a work of art (i.e., authenticity, title, condition, etc.) which requires further communication with the prior owner.
Please note that this article presents general information and is not intended as legal advice. Please send comments to firstname.lastname@example.org.
John Cahill is the managing partner of Cahill Partners LLP. John is known for his representation of those in the art world, including leading collectors, art dealers, advisors, appraisers, galleries, lenders, nonprofits, estates, and auction houses. John currently represents John Howard, and Martin and Sharleen Cohen, in their lawsuits against the Knoedler Gallery, Ann Freedman, Michael Hammer, Glafira Rosales, and others.