Blue Chip Art Dealer Indicted In 32m Dollar Fraud Case
An art dealer who allegedly sold counterfeit paintings by 'Blue Chip' Abstract Expressionist artists to several top New York dealers has been indicted for fraud, money laundering and tax evasion. Glafira Rosales, 56, will be arraigned in Manhattan today on charges of selling more than 60 bogas works by artists including de Kooning, Pollock, Motherwell and Rothko between 1994 and 2009, at a cost of $33.2 million. Rosales is also charged with sending the money to a number of foreign bank accounts and for filing false tax returns. If convicted, she faces up to 20 years in federal prison .
Preet Bharara, the US attorney in charge of the case said; "The indictment depicts a complete circle of fraud perpetrated by Glafira Rosales' fake paintings sold on behalf of non-existent clients with money deposited into a hidden bank account."
According to prosecutors, Rosales convinced prominent galleries that the previously unknown works came from two clients, one in Switzerland the other in Spain. Rosales said the Swiss client was a'high net worth individual who had inherited the art works of art.
Last year a New York millionaire filed a law suit against the now defunct Knoedler & Company, once New Yorks oldest commercial art gallery. The litigation sighted its former president, Ann Freedman with conspiracy to defraud by hard selling a fake Willem de Kooning painting for $4 million. The suit is the third filed by an art collector in the last two years.
John D. Howard, Irving Place Capital CEO and former Bear Stearns senior managing director stated, that because the gallery paid a mere $750,000 for the painting in 2007 they must have known that it was suspect. Knoedler turned it around to him for five times the price paid days after purchasing the picture. “No genuine work of art by de Kooning with a $4 million retail sale value could be purchased in good faith for $750,000,” the lawyers for Mr. Howard, from Lynn Cahill LLP, state in the papers filed in federal court in Manhattan. Mr. Howard’s suit asserts that his painting is one of several unauthenticated works by Abstract Expressionist masters that were supplied to the gallery by the unknown Long Island dealer, Glafira Rosales. The case outlines that the Modernist landscape, sold as a work painted by de Kooning in 1956-57, was likely created recently by “someone who knew Rosales.”
Another client , Larry Lagrange discovered there was a problem with his $17 million dollar Jackson Pollock when both Christie's and Sotheby's ‘refused to sell the work because of questions concerning its provenance and authenticity’. The gallery denies claims that they wilfully withheld information, stating that ‘the allegations of misrepresentation are completely baseless’. But the damage has already been done and the 165-year-old gallery announced closure the following day. An email from the gallery read; ‘It is with profound regret that the owners of Knoedler Gallery announce its closing, effective today. Gallery staff will assist with an orderly winding down of Knoedler Gallery’. The decision to close comes after a lengthy period of financial hardship for the gallery, having been forced into selling its opulent premises last February. The Knoedler Gallery has also been involved in another incident where they have been accused of conspiring to invent fake provenances for a series of fraudulent Robert Motherwell paintings. The case was resolved when the Knoedler gallery gave the buyer a full refund of $650,000.