Auction Scams

Many appraisers have seen the advertisements for auctions held in large empty homes. The auctioneers trucks in a mixture of items, mostly new decorative property and then mentions in the advertisements certain items are out of famous estates or famous clients.

Now, for some good news. The Connecticut Post is reporting that Northeast Galleries, a Leonia, N.J.-based auction house advertising that property and jewelry from Bernie and Ruth Madoff would be auctioned at sales in Fairfield and Westbrook Connecticut sales has been canceled. Connecticut Attorney General Richard Blumenthal was alerted to the sale and decided to investigate. According to the report Northeast Galleries was not able to identify or substantiate the Madoff property, in addition to the authenticity of other items in the sale (artworks by Chagall and Picasso). The planned auctions were canceled, but Blumenthal continues to investigate past sales in Connecticut by Northeast Galleries, and stated state law prohibits deceptive sales tactics. I say good for the Connecticut Attorney General. We need more policing of these so called auctions and how they represent and advertise property.

The Connecticut Post reports

Blumenthal said that during a similar auction held by Northeast Galleries on Dec. 5, the auctioneer could not say which goods were actually the former property of the Madoffs and told buyers to contact the company after the auction.

"It's a scam within a scam," said Philip Eliasoph, professor of art history at Fairfield University, who complained to Blumenthal's office Thursday about the scheduled auctions. Eliasoph, who teaches about museums, auctions and the art market, said it's a classic bait-and-switch tactic.

"The whole pretense is, it's coming out of Uncle Bernie's Montauk mansion," said Eliasoph, a member of the state Commission on Culture and Tourism.

"People are so stupid," he said. "This one in particular is egregious because they're playing on the whole pretense of the Madoff fraud. It's a fraud encrypted in a fraud. Most of what is being auctioned, if you showed up with it at the door of Christie's or one of the other major auction houses, you wouldn't even get in to see one of the specialists in modern or contemporary art."

Anyone who would buy something from the auction would become a victim, he said.

"This is not a real auction," he said. "This is not the way people who want to buy high-quality works of art for their beauty and long-term value. I would never recommend someone to begin or fill in an art collection in this manner."

To read the Connecticut Post article, click HERE.