Have you been accused of fraudulent activity that includes outright theft involving artwork? Trafficking and looting? Forged signature of artists? Selling counterfeit art? Or Failure of delivery of an artwork? Our Law group helps protect and defend art gallery owners and art sales agents from these claims and charges involving fraudulent activity.
Art crime ranks third among the world’s highest grossing criminal trades according to the United States Department of Justice. If you are being accused of this, you may be subject to criminal prosecution by the federal government on charges including the Racketeer Influenced and Corrupt Organization Act (RICO), mail and wire fraud.
Moving forward with this lawsuit can also bring about other areas of the law such as contract law, intellectual property law, trust law, taxation, and business law.
The plaintiff, who is the person bringing these charges against you needs clear and convincing evidence to prove what you sold to them is fraudulent. If this is the result, they can recover punitive damages, costs and attorney’s fees from auction houses, appraisers and others who have been involved in the sale.
To prove there was no existence of art fraud involves important elements to be met:
- No misrepresentation of facts existed about the artwork or its provenance that would spur the purchase.
- Financial loss was not suffered, and there was no misrepresentation. This particular element goes to the purchase as an investment.
- Knowledge on your behalf was accurately represented, and no deception was intended.
As an auction house or art dealer, you do have a responsibility to perform due diligence as to the authenticity of the art you are purchasing and selling.
Who can investigate Art Fraud?
There are Art Fraud Investigators who conduct research and have full academic and forensic investigative study procedures and are experts in pursuing complex international art fraud investigations.
Fine art investigators focus on varying levels of art fraud through conducting academic research, comparative studies and stylistic analysis alongside full forensic investigations into the authenticity of all antique and modern art, canvas art and oil paintings, drawings and sculptures as well.
Federal Statutes and Risks of Art Gallery RICO
RICO law alludes to the prosecution and defense of people engaging in organized crime. There are both criminal and civil penalties – meaning claims can be brought by prosecutors on behalf of the government or by private individuals.
Violators can spend up to 20 years or more in prison if an underlying crime authorizes it.
Culprits also face a fine of either $250,000 or double the amount of the proceeds earned from the activity. Following a conviction, the government is given a loss of all of the accused’s interest in the operation.
As such, suspects cease to have their money and property that can be traced back to the criminal department, but the operation itself can be crippled. The government does not need to wait for a guilty verdict. The rules of procedure in a RICO prosecution allow the government to freeze the defendant’s assets before the case even goes to trial.
18 U.S.C 1341
Whoever, having conceived or intending to conceive any scheme or artifice to defraud, or for obtaining money or property by means of false or illegal pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or bogus coin, obligation, security, or other article, or anything represented to be or imparted or held out to be such counterfeit or bogus article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or permitted repository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or collects therefrom, any such matter or item, or knowingly causes to be transported by mail or such carrier according to the direction thereon, or at the place at which it is directed to be transported by the person to whom it is addressed, any such matter or thing, will be fined under this title or incarcerated not more than 20 years, or both.
If the breach occurs in relation to, or involving any benefit authorized, delivered, transmitted, transferred, disbursed, or paid in connection with, a Presidential proclaimed major calamity or emergency (as those standards are determined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or impacts a financial institution, that person will be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.[2]
Wire
18 U.S.0 §1346
Whoever, having devised or intending to conceive any scheme or deceit to swindle, or for obtaining money or property by means of false or fraudulent pretenses, portrayals, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, images, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.
If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
10 U.S. Code § 923 – Art 123. Forgery
Any person subject to this chapter who, with intent to defraud:
(1) falsely makes or alters any signature to, or any part of, any writing which would, if genuine, apparently impose a legal liability on another or change his legal right or liability to his prejudice; or
(2) utters, offers, issues, or transfers such a writing, known by him to be so made or altered;
is guilty of forgery and shall be punished as a court-martial may direct.
N.Y.C.P.L.R. §213 (8)
New York law provides that fraud claims, including claims of aiding and abetting fraud and conspiracy to commit fraud, must be commenced within “the greater of six years from the date the cause of action accrued or two years from the time the plaintiff …. discovered the fraud, or could with reasonable diligence have discovered it.
In need of an attorney who can help defend you against Art Fraud allegations or charges? CALL US NOW!
Protect your business from false claims regarding your original pieces!
