[CPProt.net] Manhattan Art Gallery Owner Sentenced to 41 Months in FederalPrison for Multimillion-Dollar Art Forgery Scheme

[MSN CPPnet]

 Manhattan Art Gallery Owner Sentenced to 41 Months in Federal Prison for
Multimillion-Dollar Art Forgery Scheme

July 11, 2005


(FBI) DAVID N. KELLEY, the United States Attorney for the Southern District
of New York, and PASQUALE D'AMURO, the Assistant Director in Charge of the
New York Office of the FBI, announced that ELY SAKHAI, owner of The Art
Collection, Inc. and Exclusive Art, art galleries in lower Manhattan, was
arrested yesterday on charges of mail and wire fraud stemming from his
involvement in an international art forgery scheme. 

According to the Complaint unsealed in Manhattan federal court, SAKHAI,
bought and sold a variety of art works, including paintings by Impressionist
and Post-Impressionist artists, such as Marc Chagall and Pierre-August
Renoir. As alleged in the Complaint, SAKHAI would buy authentic paintings at
auction, acquire forgeries of those paintings, and then sell the forgeries,
for millions of dollars, falsely and deliberately misleading buyers into
believing that the forgeries were authentic. SAKHAI would later sell the
authentic paintings, typically at public auction, without disclosing his own
prior sale of forgeries of the same works. 

The scheme, as charged in the Complaint, involved numerous paintings,
including a Marc Chagall entitled "La Nappe Mauve," which SAKHAI purchased
in 1992 at public auction. SAKHAI later acquired and sold a forgery of this
Chagall painting (providing a purported certificate of authenticity) to an
art dealer located in Tokyo, Japan ("Purchaser-1"). SAKHAI then sold the
authentic "La Nappe Mauve" at an auction by Christie's in London, England,
without disclosing his own sale of a forgery of the identical painting years
earlier to Purchaser-1. According to the Complaint, the painting SAKHAI sold
to Purchaser-1 was revealed to be a forgery after it was consigned to a
gallery in Zurich, Switzerland, which arranged for experts to examine the
painting. 

The Complaint further charges SAKHAI with selling approximately 11 forged
paintings to another Tokyo art gallery ("Purchaser-2"). SAKHAI allegedly
represented the paintings to be authentic, but the Complaint charges they
are forgeries based on, among other things, SAKHAI's subsequent sale of the
"same" paintings after purportedly selling them to Purchaser-2. The
Complaint details the following transactions with Purchaser-2:

- SAKHAI purchased an authentic Pierre-Auguste Renoir painting entitled
"Jeune Femme S'Essuyant" at a Sotheby's auction. Years later SAKHAI sold a
painting (which he claimed was the authentic Renoir) to Purchaser-2, who in
turn, sold the painting in Asia. SAKHAI later sold the authentic Renoir,
"Jeune Femme S'Essuyant," at auction by Sotheby's on May 11, 2000, in
Manhattan, never disclosing his prior acquisition and sale of the forgery to
Purchaser-2. 

- SAKHAI purchased a painting by the French artist, Marie Laurencin,
entitled "Jeune Fille a la Mandolin" at auction held by Christie's in
Manhattan. Approximately five years later, SAKHAI sold to Purchaser-2 a
painting which he claimed was the Laurencin, (providing Purchaser-2 with a
purported certificate of authenticity). Purchaser-2 resold the painting, and
it ultimately came to Christie's in Manhattan for its May 15, 1997, auction.
However, prior to the auction, Christie's learned that SAKHAI had the
"identical" Laurencin painting. Christie's arranged for expert comparison of
the two paintings, and the painting Purchaser-2 had purchased was determined
to be a forgery. SAKHAI succeeded in later selling the authentic painting,
under the slightly altered title "Jeune Fille a la Guitare" at auction by
Sotheby's in Manhattan, without disclosing that he was responsible for the
forgery discovered at Christie's. 

Other transactions in SAKHAI's scheme to defraud charged in the Complaint
include:

- SAKHAI's sale of a forged Paul Gauguin painting entitled "Vase de Fleurs
(Lilas)" to a Tokyo art collector ("Purchaser-4"). SAKHAI bought the
authentic Gauguin painting at a Sotheby's auction. He later sold a forgery
of it to Purchaser-4 (claiming it was authentic). After several re-sales,
the forgery was consigned to Christie's, in Manhattan, and at a November
1997 auction it was sold to an individual collector. Years later, SAKHAI put
the authentic Paul Gauguin painting, "Vase de Fleurs," up for auction with
Sotheby's for its May 11, 2000, auction in Manhattan, (without disclosing
his sale of a forgery to Purchaser-4). Around the time of the Sotheby's 2000
auction, the collector who had earlier purchased the purported Gauguin put
his painting up for auction with Christie's in Manhattan, for its May 2000
auction. 

Thus, the identical Gauguin painting was depicted in Sotheby's and
Christie's catalogues for their respective May 2000 auctions. Christie's
arranged for expert examination of the two paintings, and the painting at
Christie's (the one SAKHAI sold to Purchaser-4) was declared a forgery.
Christie's withdrew the forged Gauguin from its auction, Sotheby's proceeded
to auction the authentic painting, and SAKHAI received $310,000 from the
sale.

- SAKHAI's sale of a forged Marc Chagall painting to another Taipei, Taiwan,
art gallery ("Purchaser-5"). SAKHAI sold to Purchaser-5 a purported Chagall
entitled "Le Roi David Dans le Paysage Vert." Purchaser-5 then sold the
painting through Sotheby's. The painting was revealed to be a forgery,
however, by the Comite Marc Chagall in Paris. The French authorities seized
the forgery and destroyed it pursuant to French court order. The authentic
painting reemerged later to play a role in SAKHAI's scheme to defraud, when
two art dealers from New York and Paris purchased a purported Monet, "Le
Mont Kolsas", from SAKHAI for approximately $650,000. Upon expert
examination, the Monet painting was determined to be a fake. SAKHAI accepted
the return of the fake Monet from the art dealers, offered them in
substitution approximately nine other works of art, purportedly by the
masters Monet, Renoir, Henri Moore, Chagall, Corot, DuBuffet, Cezanne,
Rouault, and Scheile. 

Each of the works upon further examination by various experts in the field
was declared to be fake, it was charged. Finally, in partial settlement of
his debt for the forged Monet, SAKHAI sent the art dealer in Paris, France,
the authentic Chagall painting, "Le Roi David Dans Le Paysage Vert," without
disclosing to the art dealer that he had acquired and sold a forgery of that
very painting to Purchaser-5 in Taiwan. - SAKHAI's sale of a forged painting
by the artist Paul Klee entitled "Palaste." In February 2000, SAKHAI sold
four works to a trust entity ("Purchaser-6"), including a Paul Klee painting
entitled "Palaste. SAKHAI had purchased the authentic Paul Klee painting
"Palaste" at auction in or about February 1998. However, after the February
19, 2000, sale of the purportedly authentic "Palaste" to Purchaser-6, SAKHAI
sold what was in fact the authentic "Palaste" at auction by Sotheby's on May
11, 2000, in Manhattan, and received $190,000 from the sale. In or about
September 2003, an affiliate of Purchaser-6 contacted Sotheby's to sell the
four works Purchaser-6 had purchased from SAKHAI. Sotheby's took the Klee
and one other painting on consignment. After Sotheby's mailed auction
catalogues offering the "Palaste" for sale, the person who had purchased
"Palaste" years before at the Sotheby's auction contacted Sotheby's to ask
how his Klee painting could possibly be for sale. Sotheby's arranged for
expert examination which concluded that Purchaser-6's "Palaste" was a
forgery. 

Other works of art forged and sold in SAKHAI's alleged scheme to defraud,
according to the Complaint, include: the authentic and a forged versions of
(1) a Gustave Moreau painting entitled "L'Enlevement de Ganymede" and (2) a
Marc Chagall painting entitled "Les Maries au Bouquet de Fleurs." 

SAKHAI was arrested yesterday in Manhattan, and was presented before United
States Magistrate Judge MICHAEL H. DOLLINGER in Manhattan federal court. He
was released on bail. 

The defendant is charged in the Complaint with mail and wire fraud. If
convicted on the wire and mail fraud as charged in the Complaint, the
defendant faces a maximum sentence of 20 years in prison for each of eight
counts, and a $2 million fine or twice the gross gain or loss resulting from
the crime.

Mr. KELLEY praised the investigative efforts of the FBI and said that the
investigation is continuing. 

The FBI is seeking additional information relating to art suspected of being
forged and directs interested persons to log on to the official FBI website
www.fbi.gov for further information and images. 

Assistant United States Attorneys JANE A. LEVINE and VIRGINIA L. CHAVEZ are
in charge of the prosecution. 

The charges contained in the Complaint are merely accusations, and the
defendant is presumed innocent unless and until proven guilty.
 
   


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