May 10, 2013

Why Have Auction Houses Sold A Counterfeit Calder Sculpture Over 75 Times Since 2004?



Art fraud affects art collectors at all levels, from buyers who spend a few thousand dollars to art collectors and investors who buy multi-million dollar art. Unfortunately, many art buyers find out the truth long after they were duped by a dishonest seller, and rarely receive a refund.

To con artists, Counterfeit Art is an appealing business with a low cost of goods.  Patricia Cohen, The New York Times, stated "between 1996 and 2008, Knoedler earned approximately $60 million on fraudulent artworks and cleared $40 million in profits".

2 Sculptures Misattributed to Alexander Calder sold over 75 times at auction
Earlier this year, the Calder Foundation documented a series of pink and black Sculptures, Lithographs and Textiles, all of which violate the Artist’s Intellectual Property Rights and are often fradulently misattributed to Alexander Calder.

One of the misappropriated works documented on the Calder Foundation website that caught our attention is a small metal sculpture that has sold at public auction over 75 times since 2004, at auction houses including WrightPhillipsDrouotBloomsbury, Galerie Fischer, Van Ham. 

Since 2004, the Sculpture has been misattributed over 40 times as a sculpture by Alexander Calder and more than 35 times as a sculpture created After Alexander Calder.

     Documented as Alexander Calder Pink Elephant by Van Ham
Sold for $3,616 on 12/3/09
Sculpture Misattributed to Alexander Calder Sold by Van Ham Auctions in 2009

Documented as Alexander Calder L'Élephant Noir by Wright
Sold for $5,000 on 10/12/10
Sculpture Misattributed to Alexander Calder Sold for $5,000 by Wright Auction


So far in 2013, the sculpture has been sold more than four times by auction houses online and off,
including: artnetChantilly EncheresArtprecium, Fraisse & Jabot.

Documented as After Alexander Calder Black Elephant by Fraisse & Jabon, 4/11/13
Sculpture Misattributed  to Alexander Calder Sold by Fraisse & Jabon

You could say the small Counterfeit Sculpture misattributed to Alexander Calder has more aliases than Al Capone, and has been documented with a number of Titles:
  • L'Élephant Noir 
  • Sun, Moon & Stars 
  • Celestial Elephant 
  • Black Elephant 
  • Pink Elephant
In fact, this small Sculpture not created by Alexander Calder has sold for almost $25,000., even though it was not conceived, designed, nor painted by Alexander Calder nor even authorized by anyone from the Calder Family or the Calder Estate.

                        Sold for $24,857 by Massol as Alexander Calder L'Élephant Noir on 8/14/05
Sculpture Misattributed to Alexander Calder Sold by Massol for $24,857.

Google Search any one of the erroneous Titles above and/or or images shown in this Article, and you will see the Sculpture continues to be sold by unscrupulous art sellers.

Many auction sellers further the deception by accompanying the misattributed Calder Sculpture with a fraudulent “Certificate of Authenticity" also known as a "COA", allegedly written by George Gordon which also indicates that the Scultpure was approved by the Estate of the Alexander Calder which was never granted.

The mobile elements were loosely based upon and have been misappropriated from images that Calder made related to his projects for Braniff Airlines.

As we have written in the past in Fine Art or eBay Fake Art?, an Article by Joseph K. Levene , “Certificate of Authenticity” (COA) Fraud is rampant; there is nothing worse, no matter how well written, than a fake COA. The bottom-line is that no COA can transform a counterfeit Work of Art into an Authentic Work of Art, and the fraudulent certificate by George Gordon is no different. As the Calder Foundation states "As works of art, these unfortunate objects are of no interest and have no historical place in Calder's life and work".

However, one thing you will never see is a Calder Application Number which is necessary to demonstrate that a Work by Calder is genuine. Curiously, many of the auction houses that have offered this small misattributed sculpture as well as the Counterfeit Textiles and Lithographs also have sold Authentic Calders that do have Calder Application Numbers.

On May 1, 2013, Titled "Black Elephant", the Sculpture was sold for $4,715 by artnet with a Certificate of Authenticity;  estimated $4,000–5,000, the counterfeit Calder attracted five bids.

Sculpture Misattributed to Alexander Calder Sold 5/1/13 by artnet.com for $4,715 that attracted 5 bids

                         Certificate of Authenticity included with artnet lot sold 5/1/13 for $4,715. 
Counterfeit Certificate of Authenticity included in Misattributed Alexander Calder artnet lot. on 5/1/13
The artnet lot sold May 1, 2013, also included the following erroneous statement:
A summary of issues you should be aware of regarding this counterfeit sculpture:
  • Offered in 2 colors, Pink or Black, neither authorized by Calder
  • Offered for sale with a range of different titles
  • The monograph signature "CA" that appears on the Sculpure is a forgery.
  • There is no authorized edition of 999.
  • Many purported sculptures have been sold repeatedly, each with the same edition number.
  • The Certificate of Authenticity (COA) from George Gordon is counterfeit, pure fiction!
  • Sometimes documented with a 1973-2002 date, which is impossible since Alexander Calder passed away in 1976.
  • Other times, it is erroneously documented as a sculpture created in 1972 or 1973.
Everything about this Misattributed Sculpture allegedgly created in an edition of 999 is fiction, or to put it in Art terms, a blatant Counterfeit even though numerous galleries, brick and mortar auction houses and online auctions continue to sell it.

If you purchased one of these pink or black elephants, and thought it was an Authentic Sculpture by Alexander Calder, you need to realize the bad news; this purported Work is counterfeit, not created by Calder or the Calder Estate, and will never have any value similar to the Textiles and Lithographs also offered by sale by deceptive sellers. 

April 14, 2013

Consignor gets $700 for Million Dollar Drawing Sold At Auction


$840 Jacques-Louis David Bought by The Metropolitan Museum of Art
Jacques-Louis David purchased for $840.
Lot 228 As Described in Swann Galleries Auction Catalogue January 29, 2013 
After a five year hiatus, Swann Galleries resumed auctions of Old Master Drawings on January 29, 2013 with 319 Lots, grossing slightly more than $500,000.
Paradoxically, Swann Galleries recognized the drawing's similarilty to the Jacques-Louis David painting titled Death of Socrates, purchased by The Metropolitan Museum of Art in 1931, but failed to recognize this rare Work was one of several unique compositional drawings by a Jacques-Louis David. For some reason, Swann Galleries overlooked careful comparison of the many differences of Lot 228 versus the 1787 Jacques-Louis David painting in the Collection of The Metropolitan Museum of Art.

Jacques-Louis David The Death of Socrates, 1787
Jacques-Louis David Death of Socrates, 1787 painting
Jacques-Louis David
The Death of Socrates, 1787
Oil on canvas
51 x 77 1/4 in. (129.5 x 196.2 cm)
Catharine Lorillard Wolfe Collection, Wolfe Fund, 1931 (31.45)
Collection The Metropolitan Museum of Art, New York
However, the curators at The Metropolitan Museum of Art did not overlook anything as they were absolutely certain Lot 228, sold in an Old Master Drawing Sale on January 29, 2013 by Swann Galleries, was an authentic Jacques-Louis David drawing, similar to another 1787 Jacques-Louis David drawing auctioned by Delorme & Collin du Bocage for $597,889 in 2005, and subsequently purchased by The Metropolitan Museum of Art, New York.George Goldner, Curator of Drawings at The Metropolitan Museum of Art stated the drawing style is typical of David. It was obvious we had to have it.”

Comparison to the The Death of Socrates canvas purchased by The Metropolitan Museum of Art in 1931 shows "the seated figure of Crito reaches out imploringly to grasp Socrates’s thigh: in the earlier drawing, Crito merely looks up, holding a large open book on his lap."

Jacques-Louis David drawing now in Collection of The Metropolitan Museum of Art
Study for The Lictors Bringing Brutus the Bodies of his Sons
Jacques-Louis David
Study for The Lictors Bringing Brutus the Bodies of his Sons, 1787
Black chalk, pen and black and brown ink, brush and gray and brown wash, heightened with white gouache
Auctioned by Delorme & Collin du Bocage: 12/7/05; Lot 00071
Sold for 510,000 EUR; $597,889, now in the Collection The Metropolitan Museum of Art, New York
The consequences of the misattribution by Swann Galleries is significant since the drawing that fetched only $700, or $840 with the buyer's premium, is actually one of several authentic, unique compositional drawings of The Death of Socrates, created in 1787 by Jacques-Louis David, and most likely, would have fetched a million dollar auction price. For reference, a similar Jacques-Louis David compositional drawing was auctioned four years ago at Sotheby's London in 2009, and that Work fetched $1,081,110 with the buyer's premium!

Had Lot 228 been documented correctly by Swann Galleries as a 1787 compositional drawing by Jacques-Louis David instead of just as an "After", the consignor would have, most likely, received a seven figure check instead of the $700 hammer price, which also does not include deductions for the Swann Galleries selling fee commission, illustration charges, insurance, etc. Accordingly, it appears the consignor of Lot 228 has the necessary support to pursue a damages claim resulting from the misattribution by Swann Galleries.
Joseph K. Levene Fine Art, Ltd.

February 21, 2013

Will the George W. Bush Presidential Museum Exhibit Self Portraits by the 43rd President?


George W. Bush Self Portrait Painting
George W. Bush Self-Portrait Portrait Painting
Recently discovered Self Portrait paintings by George W. Bush, the 43rd President, have won praise from Jerry Saltz and Roberta Smith, husband and wife Art Critics, for Vulture/New York Magazine and The New York Times, respectively. Given the positive reception of the Self-Portraits, will the $200 million George W. Bush Presidential Library and Museum, scheduled to open May 1, 2013, Exhibit these Works?  
Jerry Saltz thinks George W. Bush's Self-Portraits "are simple and awkward, but in wonderful, unself-conscious, intense ways. They show someone doing the best he can with almost no natural gifts — except the desire to do this."

George W. Bush Presidential Center
Former First Lady Laura Bush and President George W. Bush
The new George W. Bush Presidential Library and Museum will include the documents and artifacts of the 43rd President, a policy institute, 15-acre park, and include Exhibition space for the Self-Portraits  by the former President

George W. Bush Self Portrait
George W. Bush Shower Self Portrait
Jerry Saltz writes "The other picture is the strangest, and the strongest. From over his shoulder, we see Bush looking at himself in the bathtub. This means we've seen two images of him cleansing himself, in warm water. It's already enough to set you off on fantasies of aloofness, aloneness, exile, and hiding. Bush regards himself. Yet nothing untoward is showing or seen."

Roberta Smith, Art Critic, The New York Times, "wonders if Bush is familiar with Jasper Johns’s “Seasons” where each of the four paintings is shadowed by a male, seemingly unclothed silhouette, or Pierre Bonnard’s strangely chaste, luminous paintings of his wife reclining in a bathtub."

Jasper Johns The Seasons Set of 4 intaglios

Jasper Johns The Seasons Set of 4 Intaglios


John Russell, Art Critic, The New York Times, reviewed Jasper Johns 1987 Seasons Exhibition, and observed "Things dear to him are listed, pored over, set down on the canvas in an idiom that is both rich and dense, and thereafter combined and recombined."


To create a rich Exhibition experience, the George W. Bush Presidential Library & Museum should exhibit examples from Jasper Johns Seasons Series along with the Bush Self-Portraits. 

August 13, 2012

Billions Don't Impress Artnet!


ART:GR
artnet AG (ART:GR) 30 Day stock price

On August 8, 2012, artnet convened its annual shareholder meeting which lasted 13 hours, delayed from July 11, 2012. 
Hans Neuendorf, former CEO and now consultant, along with Jacob Pabst, the new artnet CEO and Mr. Neuendorf's son, successfully implemented limits to shareholders rights, meaning in the future, changes to the company statute will require the backing of stock-owners representing three-quarters of the company’s capital. This plan thwarted Redline Capital's takeover attempt of arnet AG.

By law, Redline Capital must publicly announce the terms of its takeover bid of artnet AG. The Chairman of Redline Capital is Vladimir Evtushenkov, the Russian billionaire who controls Sistema JSFC, a Moscow-based investment company. 

Mr. Neuendorf currently owns 26.5% of artnet, and over the last several months has furiously purchased artnet stock, spending approximately €179,598.06 for 43,526 shares, or an average price of €4.126 per share. On Friday, artnet AG (ART:GR), closed at €4.640 per share.

Even though artnet would benefit from the cash rich Redline Capital, Mr. Neuendorf vehemently declined Redline's takeover attempt stating "we do not need investors who are interested in raising their profile and profit instead of in art.”.  For the most recent six month period, artnet AG reported a $1.5 million net loss, and the value of the company decreased to €24.4 million euros.

In addition, artnet's cash position declined by -$1.1 million in this same period, decreasing to only $1.6 in the period ending 6/30/12. 

artnet AG six month report 2012
artnet AG Six Month Report 2012

Although Mr. Pabst stated its auction business is "growing 23 percent annually, with as many as 70 sales a week", artnet Auctions, which relaunched in 2008, continue to struggle. 

An analysis of artnet auctions through 6/30/12, indicates the company's online auctions totaled $1.8 million, translating to  about 37 lots per week with an average sale price of only $1,844 per lot.

artnet AG six month report 2012
artnet AG Six Month Report 2012
Minority shareholders stated they plan to initiate legal proceedings against artnet’s management and Redline Capital is considering similar legal action. artnet's dire financial situation could be complicated by legal proceedings at a time when an capital infusion is sorely needed.

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August 7, 2012

Artnet Takeover Tug Of War




Recently, artnet has been the subject of numerous News Stories: 
  • Hans Neuendorf, artnet CEO resigns and is replaced by Jacob Pabst, Mr. Neurendorf's son. 
  • Redline Capital Management S.A. proposed takeover of artnet. On May 29, 2012, Redline provided the mandatory disclosure related to its 5% ownership interest in artnet AG.
  • Redline's proposal to takeover artnet stems from a business analysis by Skate's Art Market Research; Skate's recommends a decisive strategy and Management change for artnet whom they state "is no longer market leader." 
Although Hans Neurendorf, artnet CEO since 1989, resigned under pressure, Mr. Neurendorf has been retained as a consultant to artnet with an undisclosed consulting contract. In addition, Jacob Pabst has assumed the role of CEO; however, the artnet Press Release avoids mention of the familial relationship.

During 2012 alone, Mr. Neurendorf has furiously purchased artnet stock, spending approximately €179,598.06 for 43,526 shares. This is Mr. Neurendorf's attempt to maintain artnet control, and ensure veto power vs. minority shareholders, who Mr. Neurendorf maintains, the Company does not need since "they do not know art, they know money - artnet likes to focus on art and artists."

A scan of artnet financial reports over the past 12 years indicates artnet has invested millions in new products/line extensions, including: artnet Auctionsartnet.frartnet Analytics Reports, although none have yielded bottom-line revenue, and some, erode existing artnet business. In 1999, artnet launched three line extensions, none financially viable and all halted in 2001:
After a hiatus of six years, artnet auctions, re-launched in 2008,  with a 10% across the board buyer's premium and complete bidder transparency. While artnet auctions boast that all Lots are guaranteed; the fine print indicates only a 45 day Term of Guarantee, in conflict with the 4 year requirement of the Uniform Commercial Code

Most significantly, artnet auctions have yet to generate any bottom-line revenue; furthermore, since the artnet Auctions relaunch, Gallery Memberships have fallen to at all time low. In addition, according to Alexa, artnet traffic is below a year ago, and most alarming, the average user spends about two minutes on the site navigating through Auctions, Galleries, its Fine Art Price Database and the recently closed magazine. It is no wonder Gallery Memberships continue to erode.   

Since artnet's short lived online art auctions in 2000, numerous online art start-ups have launched, with varying levels of success, and many, actual giant financial failures. In its three years of online auctions, Sothebys.com lost about $100 million, even though its operation was first class with vetted lots on par with the Company's brick and mortar auctions; soon after its launch, Sothebys.com was selling about $1 million dollars a week online, but the venture was aborted in 2003.

Christie's LIVE™ was launched in 2006, providing net incremental dollar volume, and most importantly, new users. Christie's LIVE™ is built with the same 5 year Terms of Guarantee as Christie's. According to Christie's, online bidding registered a +15% increase in Client bidding and a +20% increase in visitors. After the Christie's LIVE™ launch, Sothebys.com re-introduced online bidding, this time in conjunction with its live auctions, conforming to the Sotheby's Terms of Guarantee.

Both Christie's LIVE™ and Sothebys.com exist as an adjunct to the regular Auction activity of each firm; both firms recognize the importance of pre-auction viewing of all Lots offered, usually accompanied by carefully produced Catalogues.

In the last several years, there has been an onslaught of new online art ventures, many with impressive products and technologies, including:
While the 2011 artnet annual report avoids mention of each, the 2011 preface by Mr. Neurendorf mentions "key players including Facebook, Google, Groupon, Twitter"; paradoxically artnet has not embraced a meaningful and compelling social media strategy that benefits Member Galleries, users, etc.

A key impediment to artnet Auctions lack of success is users must rely on Lot descriptions, often not carefully written. In addition, artnet has not implemented a meaningful curated program of speciality sales that could help create bidder interest beyond just having lots on-line 24/7.

artnet buyers premium increased to 15%
In 2010, to help increase the bottom-line, artnet increased the buyers premium from 10% to 15%, and quietly implemented anonymous bidding, and removed all unsold lots from the web.

91.2% of sold lots fetch less than $10,000.
Since artnet Auctions relaunched in 2008, it has sold over 8,500 items as of July 31, 2012., with 91.2% sold for under $10,000. An analysis of sold lots indicates that to date, artnet has sold 8,605 lots, of which 57 lot of these, have fetched $50K or more and 16 have fetched $100K or more. However, without sufficient support, the 2011 artnet annual report states:"artnet Auctions routinely sees works by blue-chip Modern and Contemporary artists sell in the five- and six- figure range".


Why is the following Lot a Unique Andy Warhol Collage?
In addition, artnet routinely offers lots that are incorrectly documented. For instance, most Art Dealers would be hard pressed to document this Andy Warhol Lot as a Unique Collage?  We are certain that most member Galleries would not repeat the mistake of the artnet specialist: 


Not only is this documentation incorrect, but the bidder who spent $10,000., actually purchased ephemera; the Lot is NOT an Andy Warhol Collage. Down the road, they will get a rude awakening, and sadly because artnet only offers a 45 day return policy, they will never get their money back.

What is the impact of artnet Auctions on Galleries Membership?
The online artnet Auctions, launched in 2008, has resulted in a severe erosion to the number of member galleries, now at all time low of substantially less than 2000 Member Galleries.

As of July 31, 2012, just 4 years after the artnet Auctions launch, a link on the site shows 1,670 member galleries, a loss of 530 member galleries, resulting in an estimated loss of $2 million in gross revenue.

The 2011 Annual Report shows an operating margin of 1.19%, which suggests for every $100 of sales, artnet generated a net operating loss.
Users are not viewing artnet as the premier portal for art and information about the art market, but rather on an a la carte basis. artnet has failed to capitalize on its market strengths, relying instead on a steady diet of complacency and inertia.

artnet has failed to be innovative nor recruited talented personnel, but rather has consistently promoted from within. Therefore, artnet's perspective is at best limited, with employees who have never before worked in a gallery, auction house, museum or for an art publication.

According to recent evidence, artnet traffic continues to show substantial declines; Alexa reports the average user spends about 2 minutes on artnet. Given that artnet contains over 2.5 million pages of indexed content, spending about two minutes per user is a concern.

While the art market has improved over the past 12 years, artnet has been unable to capitalize on meaningful new products resulting in a lack of incremental revenue and, most concerning, jeopardizing its reputation as a leading art site.

It is imperative that on August 8, 2012, a new business strategy and management restructuring results from the Redline Capital Management SA voluntary takeover as presented by Skate's.

Joseph K. Levene Fine Art, Ltd.


Full Disclosure: Joseph K. Levene was employed by artnet as a consultant in 2000, as was Mr. Robert Grunder, Director, Joseph K. Levene Fine Art, Ltd.