Spotlight on Art Fraud and the Law in Australia

March 12, 2018

By Alexandra Taylor

‘Serious and organised crime is growing in sophistication and constantly adopting new and advanced technologies to undertake illegal activities…It is expanding its reach globally and injecting itself into new markets—both legitimate and illegitimate—in order to increase its opportunities to generate illicit wealth.’ (ACC 2015, p. 2)

In December 2000, the Australian Federal Government passed the Copyright Amendment (Moral Rights) Act 2000 (Cth), releasing the following three moral rights into legislation:

1. Right to be attributed as the author;
2. Right against false attribution;
3. Right of integrity of authorship of a work.

These moral rights are principally concerned with the integrity and attribution of authorship: the author of a book, director/producer/screenwriter of a film, and entertainers of live or recorded musical performances. Questions around attribution/authenticity right down to civil questions about property law are raised in court proceedings. Yet, while money laundering, technology and identity crime are listed on the Australian Criminal Intelligence Commission’s list of serious financial crimes, there is no mention of art fraud.

Art crimes such as theft, fraud, smuggling or illicit trafficking, are major international problems. In Australia, some believe that historically “art fraudsters escape[d] punishment.” With the art world being generally unregulated, many difficulties arise for art owners wishing to obtain objective advice regarding the authenticity, value, and condition of a work in their collection. Experts avoid litigation, bringing about correlative concerns for the judge or jury to determine the outcome of cases in civil or criminal courts. Unless compelled, auctioneers will avoid legal proceedings in fear of adverse publicity discouraging potential buyers and sellers. As there is no effective law enforcement dealing directly with the prosecution for art fraud in Australia, organised crime in the art market is able to operate with impunity.

Depending on the scholarship that produced it, asserted provenance cannot be relied upon as verification of an artwork’s history. Scientific methodology is therefore a necessary service for authentication, particularly in the absence of reliable provenance. Despite being ascribed “problematic” by an authoritative source, if a questionable work has featured in an auction catalogue it can be re-offered in the Australian market using the catalogue image as a claim of “good provenance”. The fact that forged works are often accompanied by forged provenance stresses the need for other forms of validation. Proving fakes “beyond reasonable doubt” (criminal standard), or “on the balance of probabilities” (the civil standard) presents scientific enquiry as a possible benchmark for truism.

In order for forensic analysis to be effective in court, the presented outcomes need an accurate and complete database of materials and techniques that “best fit” the results promulgated. Securing the link between an artist and their work requires a rigorous analytical approach that involves all disciplines related to provenance, materiality and technique. Judgement on ‘oeuvre’, scientific reasoning and personal experience are all counted toward the rudimentary examination of materials and aesthetics. If the evidence collected can be verified, along with the intention to commit fraud for profit, the prosecution may be successful. However, herein lies the problem.

The Association of Certified Fraud Examiners (based in Texas and offering certifications and trainings worldwide) defines occupational fraud as, ‘The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organisation’s resources or assets’ (Albrecht & Albrecht 2004, p. 7). Proclaiming expertise as an art market professional with the intent to breach trust instils the absence of ethical bias, thus fitting within this bracket. However, Australian legislation requires that false representation or evidence of fraudulent intent needs to be verified and proven beyond a reasonable doubt. The Supreme Court of Victoria’s Blackman & Anor vs. Steward and Anor in 2010 highlights the concept of unsubstantiated opinion. The validity of three works being attributed to Charles Blackman and Robert Dickerson were brought to legal consideration when the two artists alleged that Melbourne art dealer Peter Gant had wrongly attributed the artworks as theirs. Justice Peter Vickery, upon hearing the expert evidence, ordered the destruction of the three artworks, claiming that ‘I am left in no doubt that [the artworks]… were deliberately contrived to deceive unsuspecting members of the public in this manner. The false signatures drawn on each of the works could have had no other purpose’ (VSC 2010). This case is one of few examples in which the collection of evidence successfully proved the intention to deceive.

The 1999 O’Loughlin case concerns distinguished Indigenous artist Clifford Possum Ttjapaltjarri, and presents an entirely different outcome that exemplifies the difficulties in the Australian legislation. Upon investigation, the artist’s commercial associate and wholesaler John O’Loughlin was found to have had a hand in producing multiple dot paintings, selling them off as authentic Clifford Possum works. He was charged with 19 counts of “obtain[ing] money by deception” and, pursuant to the provisions of the NSW Crimes Act 1900, was also charged with three counts of “use false instrument” (p. 71). Although committed for trial on all 22 accounts, the prosecution believed it would have been too difficult to prove beyond reasonable doubt that O’Loughlin had the requisite dishonest intent to commit the alleged crimes, particularly after he’d claimed to be working under the assumption that Possum requested assistance in the dot paintings’ creation. As a result, the number of counts for which O’Loughlin eventually stood convicted was reduced, resulting in a three-year sentence on account of a ‘good behaviour bond’ (Chappell & Hufnagel 2014, p. 72).

Not only did the prosecution fail to identify the importance of the Indigenous art market for Aboriginal communities but this case also generated shaky ground around the idea of legitimate provenance. Instead of utilising more flexible systems in the crime arena, Prosecutors continued to stand by archaic methods.

According to the New York Times, cited by Paul Baker in his paper on Policing Fakes, between 10% and 40% of paintings sold at any one time are fraudulent (Baker 1999, p. 2). Only a fraction of these works are ever identified, with the fear of financial and reputational loss spurring the reluctance to come forwards. Incidentally the draft of the New York State Bill to provide enhanced protections to art experts for their opinions has stoled in New York Assembly. For now it is clear that criminal activities continue to invade the lucrative art market and the failure to specifically address art fraud is a universal problem.

About the Author: Alexandra Taylor is a Masters student at the Grimwade Centre for Cultural Materials Conservation, University of Melbourne, Australia.

Disclaimer: this article is intended for educational purposes, and does not purport to provide legal advice.

Bibliography:

• Albrecht W S, Albrecht C O 2004, Fraud, Examination & Prevention, Thompson Learning, United States of America.
• Australian Crime Commission (ACC) 2015, Organised Crime in Australia, Commonwealth of Australia, Australia, available at  https://www.acic.gov.au/sites/g/files/net1491/f/2016/06/oca2015.pdf
• Australian Criminal Intelligence Commission 2017, Serious Financial Crime in Australia 2017, accessed January 28, 2017, and available https://goo.gl/yCDnU3
• Baker P 1999, Policing Fakes, Art Crime Protection Act: Protecting Artists and Protecting Consumers Conference, Australian Institute of Criminology, Sydney, 2-3 December 1999.
• Chappell D. Hufnagel S 2014, ‘Case Studies on Art Fraud: European and Antipodean Perspectives’ in Contemporary Perspectives on the Detection, Investigation and Prosecution of Art Crime, Eds. Chappell D and Hufnagel S, Ashgate Publishing Ltd., England, pp. 57 – 77.
• Victorian Supreme Court (VSC) 2010, Blackman & Anor vs. Steward and Anor, VSC 98, accessed February 2, 2017 from https://jade.io/article/148486/section/140746?asv=gloss_widgets
• Federal Register of Legislation (n.d.), Copyright Amendment (Moral Rights) Act 2000, accessed February 3, 2017 from https://www.legislation.gov.au/Details/C2004A00752
• Fitzroy Legal Service Inc., 2016, The Law Handbook 2017, Nelson Wadsworth Thomas, Nelson, Australia.
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• Spencer  R D 2004, The Expert Versus the Object: Judging Fakes and False Attributions in the Visual Arts, Oxford University Press.