Madison Art Dealer Indicted on Charges He Sold Fake Picassos

David Crespo sold the fakes on Ebay as well as from his gallery, prosecutors said.

A federal grand jury returned a 12-count indictment against the owner of a Madison art gallery accused of selling fake Picassos.

The FBI raided David Crespo's art gallery in Madison in 2011.

The indictment charges David Crespo with mail fraud and wire fraud stemming from the alleged sale of the fraudulent artwork.

Crespo was arrested in April, almost a year and a half after the FBI raided his gallery, Brandon Gallery, as part of an art fraud investigation and removed cardboard cartons.

Among the items that were for sale in his galley was a painting marked as an original Picasso, on sale for $750,000, according to reports at the time. The gallery closed in May.

Crespo operated under the name Metropolitan Art Auctions/Portfolio Reflections of the Masters, in addition to Brandon Gallery, and made sales on eBay, according to the U.S. Department of Justice.

According to an arrest affidavit, Crespo paid Miami-based eBay sellerCollectart4less less than $50,000 for 21 pieces of purported original Picasso artwork from the "Arruza Collection" and learned from Sotheby's that the works of art were actually reproductions on printed paper.

When Crespo reached out to the seller, who is referred to only as "HP," the man said the works were originals but he could not certify them.

He was not a noted expert, researcher or appraiser and did not have a degree, federal officials said, yet Crespo sold the pieces for tens of thousands of dollars and provided certificates of evaluation saying that the Miami seller was an expert, federal officials said.

Federal officials worked with an art expert and consultant to the Picasso family who told federal officials that the works were not genuine and had "nominal" value.

Among the works federal officials said Crespo sold are a "La Tauromaqura" and "Opium Smoker" for $33,750, "Spirit of the Bullfight" for $10,750, The Studio of "La Californie"for "$35,000, but he valued them at much higher rates for insurance purposes.

Crespo is also accused of soliciting almost $80,000 from an investor who believed the artwork was authentic and worth about $1.3 million.

Philip Coffaro, a Long Island art gallery owner and former associate of Crespo, accused the local gallery owner of dishonest dealings in a 2008 lawsuit over ownership of a Salvador Dali painting, the Associated Press reported in April.

Coffaro told the AP he was interviewed by FBI agents who showed him fraudulent certificates that Crespo had apparently used to overstate the value of signed Marc Chagall lithographs.

Crespo has been out on $50,000 bond since his arrest in April.

If Crespo is convicted, he could be sentenced to up to 20 years in prison on each count and could be fined $250,000.

Published at 5:13 PM EDT on Aug 8, 2012

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Father Ordered to Pay $250,000 in Suit Over Fake Picasso

Media Executive’s Father Ordered to Pay $250,000 in Suit Over Fake Picasso

By 

MICHAEL CIEPLY

 MAY 25, 2012 8:56 PM May 25, 2012 8:56 pm

LOS ANGELES — Jack and Leslie Kavanaugh, the parents of the Relativity Media chief executive, Ryan Kavanaugh, got a double shot of bad news, as the elder Mr. Kavanaugh was ordered in Los Angeles County Superior Court on Friday to pay $250,000 in punitive damages for his role in the sale of a fraudulent Picasso drawing.

The ruling comes a day after a jury awarded about $3.2 million in compensatory damages to Victor Sands, a former friend who had sued the couple over the art sale and other matters.

Eric George, a lawyer for the Kavanaughs, told the City News Service here that he believed the compensatory damages should be reduced by $2.2 million to reflect what he was paid by a dealer who sold him the art. But Matthew Taylor, a lawyer for Mr. Sands, told the news service that he believed his client was entitled to the full amount. There are still matters to be resolved in the complex case, some parts of which will continue despite the jury award.

In court on Friday, Mr. George acknowledged that the message from the jurors was “loud and clear” after the assigning the large award. The jury believed Mr. Kavanaugh acted fraudulently when he advised Mr. Sands to buy the fake Picasso, later receiving an $800,000 kickback from the gallery owner, Tatiana Khan, which Mr. Kavanaugh said was a loan.

During Friday’s proceedings, the Kavanaughs testified about the dismal state of their finances. The couple’s Brentwood home, they said, was valued around $3.6 million, but is mortgaged to the hilt, with little or no equity. Amounts in cash and brokerage accounts, by their description, fall far below the amount needed to pay damages. Asked how much the case had cost him in legal fees, Mr. Kavanaugh pegged the amount at $700,000 to $800,000.

Cash support from their son, the couple said, dried up last summer. “Last year has been tough, especially since last August,” Mr. Kavanaugh said, when asked how he gets by. “I’m trying to sell anything I can.”

Ms. Khan was sentenced earlier to probation for five years and community service after acknowledging that she had asked an art restorer to create a version of Picasso’s pastel “La Femme au Chapeau Bleu” from 1902 and had sold it to Mr. Sands for $2 million.

Article taken from https://mediadecoder.blogs.nytimes.com/2012/05/25/media-executives-father-ordered-to-pay-250000-in-suit-over-fake-picasso/?_r=0