Project Description
Outcome: Uncovered plaintiff art dealer’s international plot to deflect blame from himself by filing a $31.5 million lawsuit falsely implicating defendants despite never incurring personal damages
We have heard investigators aptly declare “there is no such thing as a perfect crime”. While recently conducting a civil litigation investigation for the defense, we learned a plaintiff Latvian art dealer had no regard for the rules of law and responded to our findings of his culpability with further mistruths. Fueled by greed, the plaintiff committed false allegations, fake authentications, forgery, attempted bribery, then alleged $31.5 million in fraud and theft by defendants, two British and Estonian art dealer partners. We complied with our clients’ request that the names of parties and entities be changed to protect all identities.
For six years the defendants rented office and gallery space in a Beaux Art gallery building in the Sutton Place neighborhood of New York City along with fellow art dealers, including the plaintiff, who as is common in the art business purchased from the defendants art for resale to his clients, one of whom was located in a former Soviet republic known for high risk money laundering practices. The plaintiff’s litigation against the defendants stalled when we learned the plaintiff participated in his former Soviet republic client’s potentially unlawful money laundering payment stream. We were then able to unravel the plaintiff’s international plot.
The Estonian defendant stated the plaintiff offered him $70,000 for a painting he owned that was similar to works by French Post-Impressionist painter Paul Cézanne and that the plaintiff knew he had purchased for $35,000.00. The plaintiff told the Estonian defendant he would sell the painting for $5.5 million and requested that the Estonian defendant prepare for him a fake certificate of authentication. The Estonian defendant refused and advised the gallery building manager who then evicted the plaintiff.
After eviction, the plaintiff filed a lawsuit in the New York State Supreme Court against the defendants claiming the British defendant sold him Spanish silver antiques that he paid for with a $1,200,000.00 company check and then later learned they were fake. The plaintiff also contended he purchased two paintings by French Post-Impressionist painter Paul Gauguin and Danish-French Impressionist painter Camille Pissarro from the Estonian defendant for $13 million that he paid for with wire transfers to the Estonian defendant’s Liechtenstein bank account and then later discovered they were fake. The plaintiff further asserted that he owned a $280,000 ruby ring, a $520,000 diamond necklace, two paintings by French Impressionist painter Edgar Degas valued at $2.5 million, a $4.5 million painting by French painter Henri Matisse, and the $5.5 million Cézanne painting which he claimed were all stolen from his office by the defendants.
In an attempt to bolster his lawsuit against the defendants, the plaintiff purported when he told another local art dealer the Estonian defendant had sold him fake paintings, that local art dealer claimed on at least three occasions the British defendant tried to have him sell fake paintings to the plaintiff, charge the plaintiff inflated prices to create enough profit to enable the British defendant to receive kickbacks from him, and asked him not to reveal to the plaintiff that he was the source for the paintings. This local art dealer when deposed by plaintiff’s counsel repeated these same allegations against the British defendant and added that he refused his requests.
The British defendant attested he never sold the plaintiff Spanish silver antiques but did acknowledge that he sold the plaintiff six French antiques and was paid by him with a $1,200,000.00 company check. In his Complaint, the plaintiff professed purchasing the Gauguin and Pissarro paintings because the Estonian defendant gave him their provenance from an esteemed international auction house and a local art dealer. The Estonian defendant claimed never giving the plaintiff fake provenance since he had never sold him the alleged Gauguin and Pissarro paintings.
The international auction house’s provenance letter was addressed to the Estonian defendant and suggested he have the untitled Gauguin and Pissarro paintings sent to a named Parisian Art Institute to renew their certificates of authentication. Upon inspection, the international auction house found their letter fraudulent. Incredibly, the top of this letter bore a fax number, date, and time. Our inquiry in the former Soviet republic city identified the fax number as assigned to a company located in that city. It was suspected that the author of the letter was located in that city and was directed by the plaintiff and or by one of his co-conspirators. The defendants stated the plaintiff frequently visited that city for business.
During our inquiry concerning the local art gallery’s provenance letter, the owner was interviewed and advised he was telephoned by the plaintiff’s counsel who asked if he was aware someone was using his name to authenticate Gauguin and Pissarro paintings. The owner indicated the plaintiff’s counsel faxed that provenance letter to him for review and that he faxed back the letter with his written comments on it that it was not his gallery’s stationary, that his gallery’s name was misspelled, and that he did not sign his misspelled signature. We suspected that the author of either or both the international auction house and local art gallery fabricated provenance letters was either the plaintiff, a co-conspirator, or even plaintiff’s counsel.
The defendants denied plaintiff’s allegation that they stole six pieces of art from his office since they never possessed a key to his office. In fact, they reported the plaintiff moved out of the gallery four months before the date of his claimed office theft. Furthermore, the plaintiff never proved ownership of the Cézanne painting that we observed for sale on the defendants’ gallery floor. Concerning the avowed stolen Matisse painting, likewise, the plaintiff never produced any proof of purchase.
The British defendant denied having any conversations with the local art dealer who had testified that he had tried to have him sell overpriced fake paintings to the plaintiff. A U.S. Postal Inspector who previously investigated the same local art dealer reported to us that the local art dealer had been previously convicted of mail fraud in a scheme to defraud insurance companies of $1.4 million by falsely claiming art was stolen from his unattended van. He had been sentenced to forty months incarceration. We confirmed his sentencing and suspected he might have sold the plaintiff the fake Gauguin and Pissarro paintings. When we interviewed the local art dealer he was uncooperative.
The defendants’ former office manager and real estate agent, and a Philadelphia fine arts dealer and his assistant reported to us the plaintiff requested their affidavits defaming the defendants with bribe offers of $30,000 to $50,000. The dealer’s assistant reported the plaintiff told him “his attorney would write his affidavit and he could just sign it”. All four witnesses declined the plaintiff’s bribe offers and their testimony suggested the plaintiff’s witness testimonies defaming the defendants might have been secured with bribes.
Lastly, the plaintiff declared a renowned art expert found the Parisian Institute’s certificates of authentication given to him by the Estonian defendant for the Gauguin and Pissarro paintings fake. The plaintiff provided insufficient or no documentation of his purchases of the Spanish silver antiques and impressionist artworks and also failed to produce sufficient details of his stolen office jewelry and art. The Court dismissed the lawsuit.
The plaintiff then filed a second lawsuit reclaiming the first lawsuit allegations but withdrawing his claim that the defendants stole his two Degas paintings. Inexplicably, the plaintiff presented as evidence of his payment for the $13 million Gauguin and Pissarro paintings a $11,025 million bank wire instruction to the Estonian defendant’s Liechtenstein bank account. This wire instruction never listed its purpose or purchased items and its payment amount was short $1,975,000 from the stated $13 million sale price. Additionally, the plaintiff had questionably testified never conducting due diligence on the Spanish silver antiques when he had previously testified that the Estonian defendant sold him the Gauguin and Pissarro fake paintings two months before his alleged purchase date of the Spanish silver antiques. It is highly unlikely the plaintiff, an accomplished art dealer, after discovering his $13 million paintings were fake would continue conducting business with the defendants. Plaintiff’s claims appeared specious.
The defendants re-denied stealing the remaining four pieces of jewelry and art from the plaintiff’s office. To prove ownership of the ruby ring the plaintiff illogically produced a photograph of a ruby stone not a ruby ring. Nor did he enter into evidence any purchase records for the ring or diamond necklace. The plaintiff then attempted to prove his payment for the $5.5 million Cézanne painting with a $6 million bank wire transfer exhibit to the Estonian defendant’s company Liechtenstein bank account from an unknown Cyprus LLC. The wire transfer instruction never explained the $500,000 overpayment nor did it mention the Cézanne painting. In their initial meeting with us, both defendants advised they had in the past made financial investments with the plaintiff and that the $6 million payment was for a silver bullion investment. Defense counsel subpoenaed the issuing bank and learned the $6 million payment was indeed for a silver bullion investment not a Cézanne painting.
The plaintiff never documented ownership of the Matisse painting. The defendants re-denied stealing the painting and giving the plaintiff its provenance. The plaintiff responded with an art appraisal depicting Matisse’s life that he professed having received from the defendants. Our research disclosed Matisse’s life depiction was copied verbatim from britannica.com which strongly suggested the appraisal was a fabrication.
Plaintiff filed a new claim that he had purchased from the Estonian defendant a painting by French Impressionist painter Henri de Toulouse-Lautrec for $4 million. The Estonian defendant denied selling the painting to the plaintiff who stated he found the painting listed in an auction house catalog as being painted by another French painter and that it was purchased by the Estonian defendant for $55,300.00. To prove purchase from the Estonian defendant the plaintiff entered into evidence a $4 million bank wire transfer to the Estonian defendant’s company Liechtenstein bank account from the same unknown Cyprus LLC. However, the plaintiff’s purported date of purchase of the Toulouse-Lautrec painting was nine months before a date he previously stated in a deposition was when he had first learned of the painting. How could the plaintiff pay for the painting before he had knowledge of its existence?
We located the plaintiff’s reported art expert in Europe who advised him the Parisian Institute’s certificates of authentication allegedly given him by the Estonian defendant for the Gauguin and Pissarro paintings were fake. The art expert was interviewed and confirmed being engaged to verify the authenticity of two paintings and approximately three hundred and fifty works of art in a former Soviet republic. He would not disclose the name of his client. The art expert had reported he observed two fake Gauguin and Pissarro paintings in two villas of the republic’s president. The paintings’ titles matched the titles of the fake paintings the plaintiff had listed in both lawsuits as sold to him by the Estonian defendant. The art expert reported he had forwarded photos of the paintings and their provenance to a distinguished Parisian Art Institute to render an opinion on the paintings and that it had declared them fake.
The art expert claimed that the approximately three hundred and fifty additional inspected works of art located in the government’s palace and in five president’s villas were genuine. Despite the plaintiff in his first lawsuit claiming he had learned the paintings were fake from a named renowned art expert, that same named art expert, when interviewed by us, said he had never heard of the plaintiff or his attorney. The art expert advised he had reported to the president in the former Soviet republic that his Gauguin and Pissarro paintings were fake. We surmised plaintiff’s client was the president of the former Soviet republic or one of his benefactors. We suspected the plaintiff’s associates in the former Soviet republic were contacted by the president or his benefactor and advised the art expert found the paintings fake. It was assumed they informed the plaintiff of the art expert’s name and his finding which would explain how the plaintiff was able to allege in the first lawsuit that the art expert found the paintings fake. We conducted an inquiry at the Parisian Art Institute that was contacted by the art expert. The Institute re-confirmed that it had found the Gauguin and Pissarro paintings and their certificates of authenticity fake.
The defendants reported to us that they sold the plaintiff a majority if not all of the three hundred and fifty works of art that their employees packaged for the plaintiff for shipment to the former Soviet republic. The defendants were never paid by the plaintiff for the genuine works of art sold to the former Soviet republic client. However, they were paid by wire from the previously mentioned unknown Cyprus LLC account. Our research located this LLC in Cyprus and found that it was engaged in the formation and sale of foreign shell companies.
During the plaintiff’s deposition, his counsel stated the plaintiff and another individual in the former Soviet republic city formed a joint venture company to purchase and sell artwork and that they obtained funding from the Cyprus LLC. The plaintiff testified he held no interest in the Cyprus LLC and that it owned 93% of his U.S. company. He also testified he was paid 2% to 3% commissions on art sales to his former Soviet republic client.
Defense counsel argued before the Court, that since the Cyprus LLC made all payments and the plaintiff had no financial interest in it, the plaintiff could not establish personal damages. The Court agreed, granted the defendants’ motion for Summary Judgment against the plaintiff, then dismissed the plaintiff’s Complaint.
We surmised the plaintiff’s lawsuits were filed in order to divert the wrath of the president of the former Soviet republic away from himself and toward the defendants. As its investigation progressed, we realized that the Cyprus LLC had refrained from suing the defendants in order to avoid governmental findings of graft and unlawful money laundering, all of which might have resulted in devastating political ramifications for its client in the former Soviet republic.