Art Fraud

The Center fro Art Law has a very interesting article on how art fakes and frauds effect the market, and in some instances turn collectors away from the market. Fakes and forgeries are sold through all of the main venues including galleries, auctions and online, and can range from the top end of the market (such as the Knodler fakes) to the lower end of the market.

Of course good fakes and fraudulent items can have a big impact on appraisers as well, and with the number of fakes and forgeries growing and impacting many segments of the market, if not well trained, many appraisers may be perpetuating the fakes.

The Center for Art Law reports (follow the source link below for the full post)

Stories of art forgeries capture the public’s imagination in a singular way: fascination centers upon the art itself and the disbelief that collectors, galleries, and professionals could have been misled by a fraud. Today, the expanding and profitable international art market has a correspondingly lucrative market in art forgery. While there have always been ways for forgeries to enter the art market, today’s forgery market is enlarged by the ease of creating fake masterpieces coupled with the multitude of sites where fakes can be sold—at auction, through galleries, or online. The negative publicity generated by any involvement with fine art forgeries is usually enough to steer away potential buyers or admirers; however, in a small set of cases the hoaxes or forgeries themselves become well-known in their own right and take on an infamy of their own. While no centralized national or international system for analyzing how to best regulate the art market exists, the recent strands of art forgery cases around the globe offer policy considerations to help eliminate the market for forgeries.

The art market has rebounded almost to its 2008 pre-crisis level. In 2013, the international art market registered sales of $64.5 billion, which was “close to its highest ever recorded level.” However, buyers are wary of collecting unfamiliar artists, and art purchases have largely focused on household names such as Francis Bacon, Andy Warhol, and Yves Klein. The lucrative art market creates a market ripe for talented forgers, who view art forgery as a very profitable enterprise. Based on a number of recent incidents, it appears that successful art forgeries are easier than ever to execute, with wealthy collectors eager to believe in, and ready to fuel, the high prices commanded by art masterpieces. Just recall the now defunct Knoedler Gallery, which closed in 2011 following the discovery that the gallery had sold $63 million of fakes. Although Ann Freedman, the gallery’s former president, insisted that she had no knowledge that she was selling forged modern classics, there were basic elements that should have alerted her to that fact. In one painting the signature was visibly spelled incorrectly: the painting was signed “Pollok” instead of the correct spelling of “Pollock.” Even so, the painting, which was purchased by the gallery for $230,000, was eventually sold to a Wall Street executive for $2 million.

Source: The Center for Art Law