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Who is really to blame in the Knoedler fakes case?

Lawyers for the collectors and the gallery go head-to-head as one of New York’s biggest art world scandals goes to trial

by Laura Gilbert  |  27 January 2016
Who is really to blame in the Knoedler fakes case?
Charles Schmermer, who represents Knoedler's owner 831 holdings, gives his opening statement while Ann Freedman looks on. Photo: Elizabeth Williams
One of the biggest art world scandals has been put on a very public stage as the first trial connected to the Knoedler Gallery’s sale of forgeries started in a Manhattan district court on Monday. In their opening statements, addressed to a jury of seven women and three men, the lawyers on each side offered sharply conflicting views of the case.

The attorney for the collectors Domenico and Eleanore De Sole, who bought a painting supposedly by Rothko for $8.3m that turned out to be a fake, accused Knoedler Gallery and its former director Ann Freedman of trickery and lying. The lawyers for Knoedler, Freedman, and the gallery’s owner 8-31 Holdings argued that their clients did nothing wrong.

At stake is whether the defendants have to pay the De Soles $25m for knowingly selling them a forgery in 2004. That painting was one of 40 purported Abstract Expressionist works brought to Knoedler by the Long Island art dealer Glafira Rosales, who in 2013 admitted to federal authorities that they were all painted in Queens by a single artist.

Knoedler tried to “trick their customers into thinking the paintings were real” and Freedman was “lying” about the works, said the plaintiffs’ attorney Emily Reisbaum. She described the case as “simple”, arguing: “You don’t get to sell a fake painting and keep the money”.

Reisbaum said the De Soles insisted that Freedman put in writing what she told them about the work. In a letter, she said the painting was by Rothko, had been acquired directly from the artist’s studio with the help of the known art-world figure David Herbert, and had been inherited by someone living in Switzerland. “Everything Freedman put in that letter is false,” said Reisbaum. Freedman’s letter also stated 11 experts had “authenticated” the painting, including the artist’s son, Christopher Rothko, but nearly all the experts, including Christopher Rothko, will contradict that claim, Reisbaum said.

Proving that Freedman knew that the story behind the work was not true will be the plaintiffs’ biggest hurdle. Reisbaum laid out the red flags that she said prove Freedman knew, or should have known, the work was fake.

First, the source of the paintings was unknown and “Knoedler never found any proof of where the artworks came from”. Second, Reisbaum said, Rosales sent an “endless stream of unknown artworks” to Knoedler over a 14-year period; no one had ever seen them before, they were undocumented, and they kept coming. At one point, “Ann asked if there was a Pollock”, and three months later Rosales had one, Reisbaum said.

Third, Reisbaum said, Rosales offered the works to Knoedler at “bargain basement prices”, which Knoedler then sold for “spectacular profits”. For example, the lawyer said, Knoedler paid Rosales $80,000 for a Lee Krasner, then sold it three weeks later at $1m.  During the period Knoedler was dealing with Rosales, its profits were “almost entirely dependent” on the paintings the Long Island dealer supplied, Reisbaum said.

Fourth, there was what Reisbaum called “the suspicious way” Knoedler paid Rosales.  Money was never wired to Switzerland, where the supposed owner lived; instead, it was sent to Spain.

Fifth, Reisbaum said, was the dodgy provenance Rosales gave to Knoedler. “They made up a story of where the works came from. When the first story was challenged, they made up a new one,” she said. Initially, Rosales said the original buyers were in Mexico, then that they also lived in Switzerland. “Then Freedman came up with an idea”, Reisbaum said, that the artist Alfonso Ossorio had a connection to the paintings and she told clients they were acquired with his guidance.

After a purported Pollock was submitted to the International Foundation for Art Research, it refused to authenticate it and rejected the Ossorio connection as “inconceivable” in a 2003 report. “Within weeks,” Reisbaum said, Ossorio’s name was replaced with David Herbert’s, and although Knoedler hired researchers they “came up with nothing”. One, E.A. Carmean, a former curator at the National Gallery of Art in Washington, DC, will testify that Herbert was always a “question mark”, the lawyer said.  

The last leg of provenance was also missing: there were no shipping records of works coming from Switzerland to the US.  

Finally, experts expressed doubts about works’ authenticity, beginning in 1994, when Freedman started dealing with Rosales. That year, she met with Richard Diebenkorn’s family members and the former MoMA curator John Elderfield, who told Freedman that works meant to be by Diebenkorn were “wrong,” Reisbaum said. “She sells them anyway”. In 2003 and 2005, Freedman was informed of doubts about the works supposedly by Pollock. In early 2008, Jack Flam of the Dedalus Foundation, which maintains the Robert Motherwell catalog raisonné, told Freedman the paintings attributed to that artist were fake. A forensic expert hired by Knoedler also found indications the works purportedly by Motherwell were fake.

“No matter how stark the warnings, the defendants kept selling and selling these works,” Reisbaum said. “As Freedman takes the stand and says she believed the works were real, ask yourselves: why did she ignore the red flags?”

On Tuesday, the defendants struck back, arguing that they plaintiffs couldn’t prove their fraud case by the necessary “clear and convincing evidence”.  

Luke Nikas, representing Freedman, asked the jury, “How is it possible for Knoedler and Freedman to believe in these pictures?” Because Rosales was a “brilliant con”, he explained. She chose the “right artists” to forge and the “right period”—the Abstract Expressionists from the 1950s. They lived in a “highly dysfunctional world”, where recordkeeping wasn’t a priority. Then Rosales did research and came up with a story to explain the works history, he said.  

“Did Ann accept this story?” Nikas asked. “No, not even close”. Freedman did what Knoedler had always done—she hired experts, he said. Calling Freedman a “salesperson” and not an expert, he described how she had conservators, connoisseurs, and art historians examine the works and then she relied on their favourable opinions.  She didn’t subject the paintings to forensic analysis, Nikas said, because it wasn’t considered reliable at the time.

According to the defense, the National Gallery told Freedman that if the museum published a supplemental Rothko catalogue raisonné, it intended to include the painting later sold to the De Soles. “That’s all you need to know if you’re an art dealer,” Nikas said.

Why would Freedman risk her reputation by knowingly selling fakes? Nikas discounted a financial motive, saying that on the first Rosales works, Freedman earned only $42 in commission. He offered two explanations for the high mark-ups: Rosales offered the works to Knoedler “at the price she says the owner wants to receive” and “the art market goes through the roof”.  

“Ann showed the works to the whole art world,” Nikas said, and everyone was fooled.  But it was Rosales who conned them. “Ann Freedman is not responsible for Glafira Rosales’s crimes,” he said.

Knoedler and 8-31’s lawyer, Charles Schmerler, said there was “no evidence that Rosales tried to enlist Knoedler or Freedman in her scheme” and urged the jury to apply its common sense. If Freedman was running a scam, he asked, would she show the Rothko paintings to the National Gallery? Have them examined by the Rothko expert and conservator Dana Cranmer? “If you’re trying to fool all the experts and really smart and wealthy collectors and trying not to get caught, why on earth would you do these things?” Schmerler asked.  He also argued there was no evidence to support the liability of Knoedler’s parent company, 8-31 Holdings.

The plaintiffs are of course unconvinced. During a break in the trial, Eleanore De Sole told The Art Newspaper: “We’ve seen these other cases settle” (five of the ten suits against the Knoedler defendants have quietly settled out of court). “If we don’t fight it, who else will? Then every gallery in the world could get away with it.”

To read all our coverage on the case, search for the tag #Knoedler.

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