08.19.14 9:50 AM ET
Why eBay Is an Art Forger’s Paradise
Henry Stephenson is a self-described art addict. The walls of his Washington, D.C., home are collages of framed paintings, lithographs, and drawings, the culmination of a lifetime collecting art. In his early 30s, he bought his first investment piece from a local gallery: a large Marc Chagall lithograph. “It was one of 50 first editions and signed,” he says. “There was no question of its authenticity.”
In the early 2000s, after splitting with his wife of 20 years, Stephenson began devoting more time to his interest in art. But he wasn’t a habitué of New York’s auction houses, where work by big-name artists was assiduously authenticated and regularly went for staggering prices. Instead, he was bargain hunting, trawling eBay for Picassos, Moreaus, and Dalis.
Stephenson became “hooked on eBay,” collecting a dozen pieces over a five-year period from the same reseller: several small Picasso watercolors at roughly $1,000 a piece, a handful of Moreaus, and a few Dali etchings, many of which were believed to have been missing. “So I’m thinking to myself, ‘I bet this guy has some of those lost pieces,’” says Stephenson.
Today, Stephenson is cooperating with a federal investigation of the eBay reseller whom he purchased these works from. And his story is all too common. Since its inception, experts say, eBay has become a den of art forgery, an unregulated market where ignorant art enthusiasts are easy prey for forgers and scam artists.
It doesn’t take much effort to find big-ticket pieces sold by anonymous users complete with dubious certificates of authenticity, provenances, and other documents to boost the works’ credibility. (I sent a series of messages to an eBay seller in Hungary requesting further information and documentation on “original” Warhols and Basquiats, to no response.)
Despite recent high-profile prosecutions of forgers, experts say that a large number of collectors are still being duped when buying fine art online.
Connecticut gallerist David Crespo found himself in a similar situation when he was charged with mail and wire fraud in 2012 after selling forged work both on eBay and out of his gallery. After Sotheby’s declared 21 “original” Picassos he purchased for less than $50,000 on eBay to be fake, Crespo nevertheless resold them on the open—and less discerning—market.
In late June, John Re was arrested on charges of engaging in an eBay forgery scheme that earned him $1.9 million. Re is accused of starting an eBay forgery operation in 2005, telling private collectors that he’d stumbled on a cache of Jackson Pollock paintings in 1999 while cleaning out an elderly woman’s estate in Long Island, New York. Fifty-eight of the works Re is accused of selling went to the same collector for $519,890, the paintings ranging in price from $1,000 to $60,000; 12 others were allegedly sold to a different collector for $894,500; and three others allegedly to a third collector for $475,000.
And in April, a Florida pastor named Kevin Sutherland was convicted of trying to sell fraudulent Damien Hirst paintings. Sutherland had unwittingly purchased the paintings from a forger in California on eBay. But when he took them to Sotheby’s in New York to be appraised and auctioned, the house responded that it couldn’t authenticate the work. (They had contacted Damien Hirst’s camp in London, which declared the paintings fake). He might have been a victim of fraud when initially purchasing the paintings, but Sutherland was later arrested after he attempted to offload the paintings for $175,000 to an undercover detective.
“Art fraud is a confidence crime that takes two willing participants,” says Colette Loll, an expert in art fraud who consults with eBay and has trained federal agents in forgery investigations. “People still believe that there are all these treasures out there and that they’re going to be the ones to discover them,” says Loll. “There’s still this Antiques Roadshow mentality infiltrating the online art marketplace.”
Buyers are purchasing works as one would a scratch ticket, with the idea that they’re going to get lucky. A recent academic study estimated that up to 91 percent of supposed Henry Moore drawings and sculptures sold on eBay were fake. And often, it’s the more sophisticated buyer— the art collector—who thinks they’ve won the lottery when they discover an undervalued art work on the Internet.
But when people smell a good bargain, they abandon their sense of judgment. “All good dealers and collectors look into provenance,” says Loll. “But people still believe there was that one work that showed up in Grandma’s attic that exists without this chain of ownership.”
Stephenson is one of those buyers. “I knew from the get-go that it was a crapshoot,” he says. And while he says that he researched provenances and cross-checked supposed Picassos with an extensive online catalogue of the master’s works before making bids, he often ignored red flags until the works were on his walls. “They were all coming in around the same size, and the certificates of authenticity and provenances were all printed on the same paper with the same old typewriter. It was just too convenient.”
Suspecting that much of the work he bought on eBay was fake, Stephenson attended one of Loll’s lectures on art forgery at the Smithsonian, inviting her to his home to look at some of the works he’d purchased.
They sent two watercolors to the Picasso Administration, the body which authenticates the Spanish painter’s work, which concluded they were fakes. Loll and Stephenson then had the pigments chemically tested and dated on the watercolors, confirming that they were indeed fake. Then they chemically tested a Gustave Moreau painting Stephenson had purchased from the same reseller. They found that it was created with paint produced in 2000.
Stephenson is cooperating with the feds, but, bizarrely, he doesn’t seem to mind that his prized Picassos, Dalis, and Moreaus are all fake.
“I set a price in my head when bidding on a piece, and if it’s not real I don’t really give a damn,” he says. “It would be nice to find [out they are real], but I’m more realistic than that. I’m not looking for that pot of gold at the end of the rainbow.”
But Colette sees a more serious problem with forgery, beyond the distorting effect forgery has on the art market. “We’re distorting the cultural record, we’re distorting the art historical record, we’re affecting the estates and heirs of these artists. It’s a cultural heritage crime.” And when a fraudulent work hits the marketplace, it tends to circulate. In the last 40 years, three different collectors have submitted the same piece of art to the Matisse Foundation for authentication. All three times it was denied.
Loll is working with eBay on an initiative to monitor the site, but says that the company isn’t the only one at fault. “We need more eyes on the site, but we also need to address the consumer demand for artwork that looks real but is priced significantly below market value.” Loll is doing her part to protect our cultural heritage by creating consumer awareness programs to deter consumers from purchasing fakes. “A lack of due diligence and sense of urgency in these online auctions plays right into the hand of these people who create fraud on the Internet,” she says.
Joe Gioconda, an intellectual property lawyer who frequently litigates against online counterfeiters, predicts that the number of consumers being defrauded will continue to skyrocket because both sellers and intermediaries like eBay are rarely held accountable for forgery crimes. “Art forgery doesn’t fit neatly into any legal theory that has a strong remedy,” says Gioconda. “If you’re defrauded, your remedies are typically going to be under state law.”
There’s also the issue of reselling a painting you paid a lot of money if you have a reasonable doubt that it’s inauthentic. “There’s sort of a perverse incentive because once you’re the investor in the art, you’re holding the hot potato and you don’t want to know if it’s fake or not,” says Gioconda.
And while eBay makes a direct profit from sales, it is generally not liable unless it had knowledge of a suspicious seller. In a statement to The Daily Beast, eBay said it “aggressively detects and removes members who engage in any type of fraudulent behavior,” and that it encourages members of its community to bring fraudulent listings to its attention through the “Report Item” link or form. “Once submitted, a detailed review is initiated and vetted by our teams, and listings deemed fraudulent will be removed promptly.”
But in a quick look at eBay one finds plenty of too-good-to-be-true art auctions. And would-be collectors like Henry Stephenson continue to distort the cultural record in their hunt for hidden treasures.
“The testing came back on the Georges Braque. Everything was correct except small portions of the painting had been overpainted.” And because of this anomaly, authenticators concluded it was not an original. But Stephenson wasn’t giving up hope.
“I’ve studied the hell out of Braque myself and it doesn’t look like anything he ever painted, but he used to touch up his own paintings. He never seemed to be happy with his finished products. So the fact that there was some overpainting doesn’t really bother me. I still hold out a glimmer of hope that it’s real.”