Stories of art fraud and art crime routinely capture press attention. One might ask why the general public is so interested in stories of collectors of art being victimized by fraudsters and criminals. Art collectors do not necessarily represent a broad swath of the population. What is it about the art market, then, that fascinates and makes for compelling articles, books and movies? And what can and should a collector do to avoid being the subject of such 'entertainment'?
What Is "Art"?
The answers to these questions may begin with more basic questions: What is art, and why does it attract such mischief? Art is certainly aesthetic. But if beauty alone were sufficient to define art, then fake and forged art would not be so vexing to the market; the image of a fake or forged work of art does not itself change once the work is identified as "inauthentic. Art is also emotional. There is a timelessness to art, which makes it part of the fabric of human history. Owning a piece of history can be expensive. Art can additionally be reflective and identifying. To prominently hang a work of art in one's home is to announce to visitors - and to yourself - that 'this' is who you are.
And, of course, art can be commoditized. As the art market has exploded in value during the 2000s, the motivation to collect art has expanded to include the possibility of major pecuniary gains.
Where people can be tantalized to pay large sums for such emotional or financial purposes, others see opportunities to try their hands at confidence games involving fake and forged art. In such cases, there are clear 'bad guys' and victims.
In cases involving claims of previously stolen art, you often see two innocent parties fighting: an alleged victim of art theft, on the one hand, against a good faith current owner of the art who did nothing wrong, on the other hand. Both parties may be very similarly motivated to possess the art for legitimately emotional or investment-driven reasons. But only one side can walk away with the art itself. The critical issue in such cases is whether there was, in fact, a prior victim of art theft or duress.
What is "Fraud"?
Legally speaking, fraud is an intentional misrepresentation or omission of some material fact that is made with an intention to deceive, and which does actually and justifiably receive a victim thereby causing harm to that person. The art market is fertile ground for fraud, and later litigation, because of its relatively opaque customs and practices, combined with its relative lack of regulation.
Imagine trying to buy a house or a security on the open market and being told that the current owner, and the circumstances of that person's prior acquisition of and history with the property, must remain anonymous and secret. That dynamic would seem to be intolerable and inconsistent with a robustly-functioning market. And yet the art market often accepts such a dynamic as expected and even a norm. "Trust but verify" is often not a workable purchasing doctrine in the art market. Hence, there can be ample room for fraud and crime.
How Can I Protect Myself?
Many refer to the art market as "The Wild West," as if it is an everyone-for-themselves environment. That characterization may not be entirely fair, but the starting point of self-protection within the U.S. art market is recognizing, and accepting, that we are generally a caveat emptor (Buyer Beware) society. The courts will not ride to your rescue if you cannot demonstrate that you acted reasonably in the first instance to protect yourself within a tough market.
The extent of art fraud and crime can be breathtaking. Scams to manufacture fake or forged art, and to invent good provenance cover stories to accompany such art, can be intricate and, perversely speaking, even brilliant. Art thefts can involve dead-of-night mysteries that may never be solved (such as the still-unsolved theft of 13 works of art in 1990 from the Isabella Stewart Gardner Museum in Boston); or industrial-level looting through brute force and genocide (such as the Nazis' horrific and overwhelming looting of hundreds of thousands of works of art from Jewish owners during World War II, so many of which remain unaccounted today).
Art collectors should not be expected to presume that crime or fraud occurred with respect to every work of art offered on the market. But a savvy collector of art is unlikely to generate much sympathy from the court system by proclaiming ignorance of historical realities, either, or a blindness to specific"red flags" of past crime or fraud.
"Reasonable" diligence by an art collector in a caveat emptor market will vary depending upon the type of art that is being considered for purchase, and the reputation of the seller. There are some generally available resources that one should consider consulting, though.
Lost and stolen art registries such as The Art Loss Register (based in the U.K.), Lostart.de (based in Germany), and INTERPOL databases are low-cost and easily-accessible outlets for information.
An artist's catalogue raisonné (an authoritative compendium of the artist's known, genuine works by medium) is likewise relatively easy to consult to determine if a work is authentic. The author of a catalogue raisonné, or a foundation for the artist, may likewise be willing to offer an opinion of authenticity.
At a more general level, a collector would generally be well-served to show that she or he asked for support, and a warranty, that the work being sold is authentic and with good, clear title. Collectors can very often be aided by experienced counsel in knowing what questions to ask, how to ask them, and how to best paper deals.
The art market can be a source of immense drama and mischief. Those ingredients can make for wonderful and gripping entertainment for others. If you would prefer simply and quietly to collect meaningful art rather than talk about your experience in a news article or documentary, stay alert to the reality of the art market and insulate yourself through reasonable diligence.
Originally published in the Art & Museum Magazine's Winter 2021 issue.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.