Picture Imperfect: Art Fraud


Robert Tie
Contributing Writer, Fraud Magazine

Unique works of visual art — such as watercolors, figurines or collages — require security from theft and forgery and subsequent false statements that enable their fraudulent sale at exaggerated prices.

If a victim of art fraud — an artist or buyer — brings legal action, his ability to prevail often depends on whether he acted swiftly enough to comply with the governing jurisdiction's statute of limitations, as interpreted by its courts.

Report it or regret it

The time: 1946. The place: New York's burgeoning art circuit. Alfred Stieglitz, the modernist photographer who propelled his once-disparaged medium into the realm of fine art, had just died of heart failure at the age of 65. His widow, renowned visual artist Georgia O'Keeffe, was struggling to settle Stieglitz's estate, which included thousands of his photographs and hundreds of works by her and numerous avant-garde artists.

A recent painful memory made this task harder. Only four months earlier, O'Keeffe had discovered that three of her paintings were missing from An American Place, the famed gallery Stieglitz had founded to promote their work and others' amid the excitement of New York's new position as art capital of the world. But because Stieglitz's health was deteriorating, O'Keeffe did not tell him of the loss, which she then valued at $150. Neither did she tell the authorities.

"I was certain [the police] could not or would not do anything about what I'm sure they would have thought was a minor theft," she said later.

Decades afterward, in 1976, O'Keeffe learned that someone had sold the paintings a year earlier to a Princeton, N.J., art gallery owner for $35,000. O'Keeffe promptly contacted the buyer, who, because he had bought the paintings in good faith from a legitimate seller, refused to cede them to O'Keeffe.

When O'Keeffe filed suit against the buyer, Patrick Snyder, the trial court found in his favor. The court's verdict was based on its determination that the six-year statute of limitations had begun running when O'Keeffe discovered the theft. Based on that interpretation, the statute had passed well before O'Keeffe had filed her claim.

O'Keeffe won a reversal at the appellate level, but ultimately lost when Snyder's appeal to the Supreme Court of New Jersey resulted in a reinstatement of the trial court's ruling. Therefore, had O'Keeffe reported the thefts when she discovered them, her claim would have trumped Snyder's rights as a buyer in good faith.

Read the full article on Fraud-Magazine.com.