CNBC Dow Jones Wealth Management both posted interesting articles on fake and fraudulent art. As is the norm in the art worlds for fakes, the usual suspects are Picasso's, Chagall's, Miro's Warhol's. Giacometti's etc. The most telling item in these types of reports is many collectors and investors are gullible, lack knowledge and understanding, fail to authenticate and not heeding the old adage of if its too good to be true be wary.
Xiliary Twil of Art Asset Management Group sent a similar article to me from Dow Jones Wealth Management. It also mentions that after purchasing art, many collectors dont wish to spend the extra dollars necessary for a proper authentication and valuation.
Both articles are very good resources for appraisers.
CNBC reports
Source: CNBCImagine a Picasso hanging on a wall in your home. The painting was appraised at $58,000, but you bought it for $6,000. A proud owner of a masterpiece, you’re probably thinking you got a deal of a lifetime. But what if it’s a fake?
The world of fraudulent art is growing quickly, raking in hundreds of millions of dollars a year. People are also becoming more sophisticated in the way they forge art and the way they sell it, according to the Federal Bureau of Investigation.
In a troubled economy, traditional investments don't do as well, so many look to art as a stable investment. In turn, scammers try to lure potential buyers, opening the door for more fraud.
Business is good for Emmanuel Benador, a third-generation art dealer who now consults for the FBI. For more than 18 years he was director of the Jan Krugier Gallery, which held one of the largest Picasso collections in the world.
“In matters of fakes, I see them almost every week,” Benador said. "The most commonly forged artists are Picasso, Chagall, Miro, Matisse, Giacometti, Warhol, Lichtenstein and Marino Marini."
For someone shopping for fine art, he recommends taking a few precautions before handing over your money.
First, don’t get taken in by a "bargain."
The Dow Jones Wealth Management Reports (in full)
Source: Dow Jones Wealth ManagementA prized Picasso that turns out to be a fake naturally leaves its owner with a big loss. But collectors can do more these days to ensure they don't end up owning a counterfeit.
Detecting forgeries has become far easier as lasers and other technologies advance. And financial advisers now are stepping in more to see that clients who buy or own art, from paintings to furniture and objets d'art, know what they really have.
Summit Financial Strategies Inc., a fee-only adviser with more than $600 million under management, recently co-sponsored former FBI agent Robert Wittman, an expert on art security and spotting fakes, to speak at the city art museum in Columbus, Ohio. The firm refers clients to appraisers and other experts if they are concerned about a piece of work, says Mark S. Coffey, an adviser with Summit Financial.
Many art lovers pick up pieces on a whim and a handshake, without a closer look that could save them from regrets later on.
The average person doesn't want to spend extra money to determine a piece's authenticity, according to Raymond J. Dowd, a partner at Dunnington, Bartholow & Miller LLP in New York, which specializes in art law.
"If you go into an art gallery and someone says "This costs $10,000," would you want to spend a couple thousand dollars more to verify the artist?" Dowd asks.
The same dynamic may apply to those who already own a work, perhaps one inherited several decades ago. Dowd has seen the results when someone making an estate plan or gift goes to take stock of the piece, say for tax purposes, and finds that it's a fraud.
More collectors, nonetheless, now seek out help and even go to scientific experts directly. The latter trend, says Jennifer L. Mass, senior scientist at the Winterthur Museum in Winterthur, Del., has been helped by popular portrayals of her profession, in books and movies.
Mass examines all kinds of art, from antique glassware to paintings and furniture, in a laboratory stocked with lasers, X-ray sources and electron beams. Lately, she has seen numerous fakes coming out of China. American folk art is another area where forgers are especially active.
A collector of American furniture dropped plans to buy a piece said to date from the 1830s after Mass discovered that 80% of its surface was painted with modern, machine-ground paint instead of the hand-ground paint that would have been used in the past.
Forgers now have more sophisticated tools at their disposal, too, notes Mass, who says there is a kind of "arms race" between scammers and scientists.
Insurance is little help when a forger succeeds in pawning off a fake on a buyer. Policies generally cover damage and theft, but not forgery. Dorit Straus, worldwide specialty fine art manager at Chubb Personal Insurance, says more appraisers now add a caveat to their documents, saying, for example, that the value of the object is a certain amount if its identity is confirmed to be what the appraiser thinks it is.
Needless to say, the art world can be a confusing place, so buyer beware.
"It's not very transparent, not like buying a washing machine with a warranty," Straus says.
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