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06.01.11 11:05 PM ET

Steve Martin's Fake Campendonk: Germany's Largest Art-Forgery Ring

German authorities are investigating an elaborate art-forgery ring that fooled the funnyman and even Christie's experts.

Steve Martin is the latest victim in a multimillion-dollar art-forgery ring that has become the largest known art scam in German history.

The actor purchased a work by the somewhat-obscure German Expressionist painter Heinrich Campendonk in 2004, to add to a vast collection that includes works by Picasso, Roy Lichtenstein, and David Hockney. Martin's Campendonk painting, which was dated to 1915, is titled Landschaft mit Pferden, or Landscape With Horses. He purchased the colorful work from a well-respected Parisian gallery, Cazeau-Béraudière, for €700,000 ($850,000). It was authenticated by an unidentified expert before he purchased it. Two years later, Martin unloaded the work, selling it this time through Christie's Auction House in London in February 2006. But Martin took a loss, as the work sold to an anonymous Swiss businesswoman, for only €500,000.

Now, the painting Martin sold has been deemed a fake—and it's unclear whether the actor himself could be held responsible. German authorities are investigating the ring, which is thought to have produced as many as 30 forgeries from early modernist painters such as Fernand Léger and Max Ernst. It is still unknown when the ruse began—though some reports place it as early as the 1990s. The main suspect is a 60-year-old man named Wolfgang Beltracchi, who operated along with his wife, Helene, her sister, Susanne, and a man named Otto Schulte-Kellinghaus. (All are in custody.) According to Der Spiegel, their routine was complex: After forging each painting, the clan would fabricate its provenance—its history of ownership. In the case of Martin's painting, the forgers said it had come from the collection of Werner Jägers, a German businessman who happens to be the grandfather of Beltracchi's wife. The provenance allegedly states that Jägers acquired paintings from art dealer Alfred Flechtheim and hid them from the Nazis during World War II. The forgers allegedly sold many of their paintings to French galleries, including to Cazeau-Béraudière, where Martin bought his work.

"This appears to be a very clever and elaborate scheme involving fake provenances, concocted collections, and several people," said Sharon Flescher, executive director of the International Foundation for Art Research (IFAR), a nonprofit that has dealt with topics of attribution and authenticity. "It also involves well-known artists, but not necessarily top-tier. These are artists who sell for a lot of money, but not so much money that one would necessarily spend an inordinate amount of time doing the research."

The paintings produced by Beltracchi and his cohorts have been called " gold standard" forgeries by experts—duping even Walter Spies, a noted expert on painter Max Ernst. But according to one expert, Dr. Nicholas Eastaugh of Art Access and Research, who has conducted tests on four of the alleged forgeries, the works contain pigments that would not have been available when the paintings were said to have been made. But Martin's fake must have been good enough that it slipped through the cracks at Christie's, where authenticity is taken seriously for each painting that ends up on the block. According to Peter Carleton, trustee of the Simon Karlinsky Estate, who sold a 1918 Campendonk via Christie's in 2010, the auction house's system for examining and verifying the painting was incredibly thorough. He described a 20th-century specialist who visited him in late 2009 or early 2010 and evaluated his Campendock artistically—including a close analysis of its wood panel—before examining Carleton's supporting documents. He remembers that the specialist was eager to include it in the house's February 2010 Impressionist and Modern Sale.

While the scope of the ring is still unknown, the total losses are estimated at €34.1 million ($48.6 million). In Steve Martin's case, it is unclear who will assume responsibility for this loss. As Martin told The New York Times on Tuesday: "The gallery that sold me the picture has promised to be responsible to me, if I'm responsible, but it's still unclear." (Emails to Cazeau-Béraudière Gallery bounced back and a general telephone number appears to have been disconnected.) Another Campendonk, Rotes Bild mit Pferden ( Red Picture With Horses), was sold by German auction house Lempertz in 2006 to a trading company in Malta called Trasteco, which is now seeking a refund on the purchase price.

"We take any doubt surrounding authenticity very seriously," a spokesperson from Christie's said via email. "This case is highly unusual and complex, involving a number of auction houses and dealers worldwide. We cannot discuss the specifics of the case due to the ongoing investigation in Germany, however we are in contact with all appropriate parties to address these matters. As part of our standard terms and conditions, Christie's provides buyers with certain guarantees in regard to the authenticity of works sold in our salerooms."

Isabel Wilkinson is an assistant editor at The Daily Beast based in Los Angeles.