by Catherine Schofield Sezgin
The Journal of Art Crime’s fourth issue dated Fall 2010 includes an academic article, “Art Fraud: Deflecting Prosecutorial Intervention Away from the Defective Art Product,” by John Daab, a Certified Fraud Examiner specializing in art and forgery research. Mr. Daab writes in the article’s abstract:
“Historically, art crime consisted of looting, stealing, and burglarizing museums and creating art forgeries, to name a few. Scholars have recently broken down the category into street and white-collar art crime types. For example, the common museum burglaries fall under the street type while art forgery and art fraud are found in the white-collar realm. The notoriety of the break in is hyped by the mass media in their various presentations. Art crimes of this sort are definite, often leaving a trail. Ultimately, the culprits are captured by tips or forensic examination such as fingerprints, burglar tool matching, and so on. In the case of art fraud or forgery, which Starnes has characterized as the “invisible crime,” such definitiveness or clarity of criminal act is often missing (2002). Such indivisibility combined with factors hindering prosecution allows the art criminal to push the envelope to the point that this form of white-collar crime becomes a non-crime. The study below offers an identification of the factors and the consequences surrounding white-collar art crime, leading to a suggestion that art fraud is a gold mine for the white-collar criminal.”
Dr. John Daab is a Certified Fraud Examiner specializing in art and forgery research with Association of Certified Fraud Examiners and a Certified Forensics Consultant, Accredited Forensic Counselor and a Registered Investigator with the American College of Forensic Examiners International. John holds Diplomate status (DABFE) with the American Board of Forensic Examiners and holds Certified Homeland Security I (CHS-1) and Certified Intelligence Analyst (IAC) member status with the American Board of Certification in Homeland Security.
An academic with various undergraduate and graduate degrees from philosophy to business with a focus on art authentication, John is a sculptor who works can be seen on the Fine Art Registry (his works can be seen in his FAR online portfolio). He has published more than 80 articles and recently authored, "The Art Fraud Protection Handbook" (Kindle Edition). He is currently completing studies in Art Appraisal at New York University, completing a docent program at Princeton, and has completed a second book, "Forensic Application in Detecting Fine, Decorative, and Collectible Art Fakes" (Kindle Edition). He is developing a third book on the "Business of Art."
ARCA blog: John, in your article, you study the way Ely Sakhai processed his frauds and comment: “Over the 13-year period it is alleged that 12 million dollars in forgeries were sold with many still in the hands of the unwary.” He was charged in federal court with wire and mail fraud and received four years in jail. Were you surprised?
Dr. Daab: I was surprised that Sakai was prosecuted. White collar crime is rarely prosecuted. I was not surprised how the prosecution was processed. Most art fraud prosecution usually ends up under the wire and mail fraud statutes. Fraud statute violations are difficult to prosecute because of the conditions of intentionality, gain to the fraudster, and loss to the victim usually found as the requirements in the statute. Intentionality is difficult to prove since there are many levels to the processing of the crime. Sifting through all the parties involved takes time and may lead to a total dead end. Prosecuting via the wire and mail fraud statutes is a more efficient method of prosecuting resulting in a higher probability of conviction.
ARCA blog: In your second case study, you describe the art fraud paradigm of selling art of questionable authenticity and value at galleries selling art at sea. No government intervention has taken place according to your article. What do you think it will take to close these dubious practices?
Dr. Daab: I think that selling at sea represents a significant problem for US prosecutorial and probably international agencies since there is an undefined area where the crime takes place, and a difficulty in establishing the conditions for the violation. Lacking this defined area prevents pulling in that prosecutorial agency responsible to charge the alleged criminal, and since consumer protection laws are not operable at sea the conditions supporting the violation are ineffective. Some even argue that the consumers purchasing the art should know better. Supposedly the US policing agencies have cooperative undertakings with foreign governments for crimes at sea, but based on the fact that very few prosecutions have taken place for murder, rape, theft and assaults on board it would be unlikely that any activity will close down the selling of fake art. If the US policing agencies do not go after violent criminals at sea they will certainly not go after art fraudsters.
ARCA blog: Is the term “defective product manufacturer” sufficient to describe what is going on in the art market? How can a buyer feel safe?
Dr. Daab: The art market is an unregulated, uncontrolled and non-transparent market. There is more control over selling used cars than art costing millions of dollars. While there are some organizations like Fine Art Registry focused on vetting fakes, most art is turned over with the assumption that it is genuine. Scholarly investigations have found that art found in some prestigious museums is only 60% authentic. Given that 40% of museum art is of questionable authenticity and surrounded by the foremost art historians and curators, it would be difficult to argue that the art market selling the works of collectible artists lacking this pedigree would hold works of a higher probability of authenticity. I would argue that buyers of art have no safety net in the present art market except to assume that there is a 40% chance that the collectible art one is considering is bogus, and as such maybe one should just walk away from the purchase.
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