Based on the airtight investigation put together by Larson and the federal prosecutor assigned the case, Matthew Diggs, as well as the diligent expertise of Katherine Elliott, Little was convicted of wire fraud for his use of eBay as his venue for advertising and selling fake artwork. A federal judge sentenced him to five months in prison and a restitution of $75,389. But the short-term damage had been done to Chihuly. As U.S. attorney Jenny A. Durkan stated, “Fraud schemes like this one target all artists and damage confidence in the marketplace.”17
Soon after Little was convicted, another man accused of committing fraud while selling art on eBay was facing federal criminal charges. In an affidavit filed in federal court in the Southern District of New York, FBI agent Meredith Savona accused an East Hampton man of concocting a five-phase scheme to defraud art buyers. Jovian “John” Re, a former woodworker and an amateur artist, was described as an Abstract Expressionist painter who “sold more than 60 purported paintings by Jackson Pollock to art collectors for approximately $1,889,390 that [he] falsely represented were created by the famous Abstract Expressionist American artist.”18
Re is an interesting figure, portrayed on various websites as a man of many interests and unique skills ranging from art expertise to submarines.19 Like Henty, Re had a previous conviction for counterfeiting. In his earlier case, he pleaded guilty in 1995 to criminal possession of a home printing press on which fake $20 bills were made, a crime for which he was sentenced to two to seven years in prison.20 Internet postings about Re depict a true enigma. One WordPress blog, written by a person who identified herself as “Nicole Hadley,” rebuts an unidentified “slanderous attack on Mr. John Re of East Hampton, NY who would otherwise be noted as a world expert in several modern and contemporary artists.” The testimonial goes on to tell of a 1998 meeting “Hadley” and her husband “Jeff” had with Re at the Museum of Modern Art, at which, upon considering a painting of a woman, Re stated “this painting is a forgery.” According to the writer, the trio was then approached by a curator who informed them that the painting in question “was in fact a reproduction.” The blog entry closes with mention that Re is also a “search and rescue diver” and thanks him for his service. Interestingly, the “character rebuttal” on behalf of Re is the one and only posting on “Nicole Hadley’s” blog. Furthermore, the writer, who describes herself as a collector of fine art, titled the post “John Re Art Connaisseur [sic].”21 Of course, as with so many things on the internet, it’s difficult to discern which—if any—of these postings are authentic.
Savona, whose prior assignment in the bureau included 12 years on the Organized Crime Squad, is a highly trained fraud and art crime expert serving on the FBI’s Art Crime Team. Her affidavit spelled out Re’s alleged crime as beginning with offering for sale the so-called Pollocks. Next, she described Re as using the tried-and-true story that the paintings had been found in the basement of a family that had been given the works directly by the artist himself. This, said the investigator, “was a lie that Re told his victims to give the paintings a plausible provenance, or chain of ownership, and to induce Re’s victims to buy the paintings.”22 Savona’s investigation revealed that, according to the alleged victims, Re said that he had been helping Barbara Schulte clean out her basement after the death of her husband, George, a fellow woodworker, when he came across the paintings.23
Next, the affidavit states, Re told each of his buyers that they were the sole owners of the entire collection of Pollocks found in the basement. In one instance, Savona wrote, Re threatened a buyer with the prospect of changing the stated provenance, thus rendering the paintings of no value. Finally, like his contemporaries Spilman and Henty, Re allegedly engaged in shill bidding to artificially and fraudulently inflate the prices of the purported Pollocks he offered for sale on eBay.
One of Re’s customers, identified only as “Customer-2” by Savona, became suspicious of the authenticity of the paintings purchased from Re and decided to seek an opinion from the International Foundation for Art Research, the well-respected New York–based organization with expertise in such work. Re became concerned with this decision and wrote to his customer, “I tries [sic] to make it clear not to [sic] long ago that using IFAR was NOT a good idea. I told you from horror stories I know to be true regarding IFAR . . . What the hell were you thinking, or were you letting someone do your thinking for you,”24 according to an e-mail quoted in the affidavit and attributed to Re. In relation to the IFAR testing, Re allegedly wrote, “I know so far you said they gave you some indication that the pieces are doing well.”25
In fact, the paintings were not doing well. IFAR’s exhaustive work on the 45 paintings presented to them was damning. They wrote to Customer-2 that they had conducted “a thorough investigation which included in person examination of all 45 paintings by specialists and conservators, extensive provenance and art historical research, and physical examination, and selective forensic testing of the materials.”26 The results: none of the 45 works were painted by Jackson Pollock. In addition to all of the examination and testing, IFAR found no evidence that George Schulte had a relationship with Jackson Pollock that would explain him having the paintings. Moreover, neither Schulte’s family nor his friends recall George claiming to have Pollocks or seeing them in the home. Worse, experts discovered “the use [of] old papers scumbled over with dark pigments to intentionally distress them.” This was “strongly suggestive of an attempt to deceive.”27
The FBI investigator wrote of another troubling instance, this time related to another alleged customer of Re’s. Savona reported that when this customer showed one of the purported Pollocks to a New York art dealer, some dirt was noticed on the painting. The dealer wet his finger with saliva to wipe it away (a common method of spot cleaning art) and found that paint came off of the artwork. This occurred in 2013, 57 years after the death of Pollock, by which time the paint would certainly have dried.28
Faced with the prospect of being exposed by one of his customers, the FBI states, Re resorted to threatening his clients. In one communication, he referenced a mafia crime family, telling a collector, “[I] would never threaten anybody unless I’m gonna follow through. I grew up in Brooklyn, ok? My mother’s from the Bonanno family, which means Gambino. When I tell you to do something, you don’t . . . be quiet. You don’t question me. You don’t talk over me. You don’t disrespect me. You just do it . . . And if you got to call me back and ask one more time, your mother’s going to start wondering why you stopped visiting her.”29
Re reportedly used associates to inflate bids on his Schulte Pollocks placed on eBay. In one case, the FBI found that he had e-mailed an individual requesting that he place a bid of $26,000 on a painting in an attempt to give legitimate shoppers the impression that there was serious interest in the work. He then asked another individual to make three separate shill bids on the painting.30
In May 2014, Agent Savona visited John Re and questioned him about the paintings he had offered for sale. According to the agent, Re described himself as an art expert and, at first, denied offering paintings for auction on eBay as “authentic.” But the agent came prepared and presented Re with copies of his eBay postings that did indeed make claims that his Pollocks were “authentic” and “real.” Faced with the evidence, Re, the affidavit states, admitted he sold the paintings as authentic but “he did not think he had done anything wrong.”31 Ultimately, Re pleaded guilty to one count of wire fraud in federal court in 2014.
Though the FBI says Re’s total sales brought in nearly $2 million, the most expensive work he sold was alleged to have gone to Customer-2 at the price of only $60,00032—a figure substantially below the market value for a true painting by Pollock, whose works have sold for tens of millions of dollars. $60,000, however, for a painting that is essentially barely worth the price of the canvas is a nice profit. And it is clear evidence that there is no shortage of buyers who will ignore red flags like an inexplicably
low price tag because they so badly want to believe they have found a hidden gem. But it’s nowhere near the highest price taken in by a scammer via eBay.
If there is one thing that must be sacrosanct in an online auction, it is trust. Whether a buyer is bidding on a lock of Abraham Lincoln’s hair, a ball signed by Derek Jeter, or a painting by Richard Diebenkorn, the bidder is making a leap of faith each time they enter a dollar figure and click on the “Place Bid” button. After all, as eBay warns, “Bidding is meant to be fun, but remember that each bid you place enters you into a binding contract. . . . If you win an item, you’re obligated to purchase it.”33 That’s not to say that the seller can do as he pleases. eBay makes it clear on its site that “Sellers can’t deny or reject any knowledge of or responsibility for the authenticity or legality their items.” eBay does not allow sellers to list items if they are not sure they’re authentic, or to use disclaimers like “I believe this is painted by Degas, but I can’t be sure,” “I cannot guarantee the authenticity of this item so please bid accordingly,” or “The autograph looks real to me.”34
When a young California attorney named Kenneth Walton offered for auction a painting purportedly by Diebenkorn, he was absolutely certain that the autograph didn’t look real. No, Walton was not an expert in the work of the Bay Area Abstract Expressionist. In fact, he wasn’t an expert in art at all. But he could be sure that the signature was not authentic because Walton was the person who signed it.
Walton and an associate, a con man named Ken Fetterman with whom he had served in the military, together with a third individual, Scott Beach, sought out cheap paintings to sell online on eBay utilizing all the dirty tricks they could come up with. They created 47 phony accounts and placed $300,000 worth of shill bids on hundreds of paintings they sold by attributing them to famous artists who had not painted them. They posted their worthless art under the names of such accomplished artists as Giacometti, Edward Hopper, and others. In all, Walton and his accomplices brought in $450,000 from more than 500 auctions.35 But it was the Diebenkorn that made the biggest splash.
After finding a cheap painting that resembled Diebenkorn’s style, he painted the initials “RD” and the number “52” (ostensibly to indicate the year it was created) at the bottom right corner of the work. Rather than posting it as an authentic Diebenkorn, Walton tried to be clever. In the description of the painting on eBay, he wrote, “I got this big abstract art painting at a garage sale in Berkeley . . . back in my bachelor days. Then I got married, and my wife has never let me keep it in the house. She says it looks like it was done by a nutcase.”36 Walton was playing the clueless rube who didn’t realize the treasure upon which he had stumbled, setting up his mark to jump on the “too good to be true” story. In furtherance of the backstory, Walton also posted a few other items to make his character seem more innocent and genuine, including an unopened roll of twine, a basketball, and a pewter frame.37 To an online shopper, it seemed like the eBay seller, named “golfpoorly,” was probably cleaning out his garage and decided to post some odds and ends in an online auction to make a few bucks. In fact, not only didn’t Walton have a Diebenkorn, he hadn’t a wife or a house, either. The innocent hayseed that Walton was portraying started the bidding for the painting at just 25 cents.38
Soon, the bids began to roll in, aided by dozens of shill bids that he and his cohorts arranged. The price for the painting ballooned to $135,805, with a man in the Netherlands the high bidder, which drew attention from the media, including the New York Times. In a May 2000 article on the Diebenkorn auction, Judith Dobrzynski wrote, “The six-figure sale is not only one of the highest prices paid online for art, it is also a powerful testimony to the ability of the Internet to ignite a sales frenzy, even for expensive items that may or may not be what people think they are.”39 Dobrzynski was right in her suspicion about the painting, of course. But the assertion about the sales frenzy was slightly off, if only because of the devious minds of Walton and his associates, for the price shot up at least in part due to the shill bids that they placed. Without it, other buyers might not have taken note of the sale, or perhaps would have associated low bids with low quality. Indeed, as the price rose due to fake bids, legitimate bids rose with them.
The attention that the sale of the Walton Diebenkorn garnered led eBay to examine the affair more closely. When they found that Walton had bid on his own offering, they voided the sale and found that he was using at least five different account names while his associates used an additional eight. eBay suspended all of the accounts, as well as two more brought to their attention by the Times. According to Special Agent Donald Vilfer of the FBI’s Sacramento office, the matter caught the bureau’s attention when Dobrzynski wrote a follow-up story reporting that Walton and others had engaged in cross-bidding on items and arranged for the posting of strong customer ratings on the site.40 Soon, Walton, Fetterman, and Beach were in the crosshairs of the FBI for internet fraud.
By March 2001, the trio was indicted by a federal grand jury for their fraud on eBay. Though the British newspaper the Guardian described Walton as a “bored lawyer,”41 he clearly paid attention in law school, quickly identifying his dim prospects in court and agreeing to cooperate with the government, as did Beach. Fetterman, ever the scammer, fled arrest and went on to assume false identities, including that of the famous Pearl Jam guitarist Stone Gossard, before ultimately being arrested.42 Both Beach and Fetterman were convicted of their crimes in federal court.
The scam and his 30-month sentence behind him, Walton wrote a book chronicling his crimes titled Fake: Forgery, Lies and eBay. He also reflects upon his frauds somewhat wistfully, telling the Guardian, “I miss the thrill of the hunt and then seeing how much you can get for something when you put it up.” He also displays a keen understanding of what motivated his dupes, something he described as an “optimistic self-delusion” in which “people really want to believe they have found something good.”43
The timeframe of Walton’s scam coincided with an incidence of internet crime that had risen to a level warranting closer scrutiny and a stronger response from federal law enforcement. With cyber crime exploding exponentially as a worldwide problem, the FBI decided it had to take action and in May 2000 established a partnership with the National White Collar Crime Center to form the Internet Crime Complaint Center (IC3). By its fourteenth anniversary, the IC3 had received 3 million complaints of internet crime. According to the group, the total dollar loss claimed from these complaints exceeds $2 billion.44 Clearly, internet fraud poses a great threat to consumers and the world’s economy. And where there exists a venue to scam a consumer, one can be sure that there’s a con artist looking to get rich quick using art as their merchandise. After all, the internet has been the vehicle used by many to make unimaginable riches almost overnight. From social media websites to YouTube personalities to online retailers like eBay, internet fortunes seem to be amassed even during economic downturns. All it takes is one person with a URL, a computer, an internet connection, and a dream. Or, as in the case of the scam artists, a devious scheme. There is no shortage of these sorts attempting to exploit trusting buyers on the internet, and with eBay the largest of the lot, it’s only natural that their services would be targeted. And they are quite often. As Lizzie Crocker wrote for the Daily Beast, “Since its inception, experts say, eBay has become a den of art forgery, an unregulated market where ignorant art enthusiasts are easy prey for forgers and scam artists.”45 But that’s not to say that the problem isn’t being addressed. eBay’s Ryan Moore, lead manager for business communication, reports that “bad activity is currently at an all-time low on eBay’s marketplace—down 50% over the last seven years (2007–2014). In addition, only a tiny fraction of all transactions on our platform—far less than 1%—experience any kind of bad activity.”46
Clearly, eBay works hard to counter fraud on its site, including scams related to art crime. One step they have taken in recent years
is to enlist an expert in the field of art fraud to consult on an initiative to monitor art sales on the website. And the company told Crocker that it “aggressively detects and removes members who engage in any type of fraudulent behavior” and also provides shoppers with a link through which they can easily report an item that they suspect to be a fraudulent listing, at which point eBay undertakes a detailed review to remove any bad listing.47
Moore espoused the company’s philosophy when it comes to fraud protection. “For eBay, nothing is more important than the trust of our customers. We utilize a combination of sophisticated detection tools, enforcement and strong relationships with brand owners, retailers and law enforcement agencies to effectively combat fraudulent activity and present our customers with a safe, trusted shopping experience.” He added that buyers on eBay do have recourse if they are victims of fraud, stating, “In cases where an item is not as described or something goes wrong, eBay’s Money Back Guarantee ensures buyers get the item they ordered or they get their money back. Bottom line, when you buy and sell on eBay, we have your back.”48
In addition, eBay established a Global Asset Protection Team to “promote the safe use of its platforms and to collaborate with local, national and international law enforcement in apprehending and prosecuting criminals.” The team works to provide pertinent records to authorities investigating crimes committed using the site.49 Finally, eBay has utilized software to identify fraudulent activity on its site. The company provides information on its site about its efforts to combat fraud, using its own online Help pages to explain avenues available to buyers, sellers, and law enforcement to help combat suspected fraud. It’s an important mission, and recent history indicates that though fraud on eBay might be down, the site, like any gallery or auction house, remains an irresistible target for con men hoping to make a killing.
The Art of the Con: The Most Notorious Fakes, Frauds, and Forgeries in the Art World Page 22