Does the punishment fit the crime? Art fraudsters face erratic sentencing

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The recent sentencing of the Palm Beach art dealer Daniel Elie Bouaziz, after he pled guilty to laundering money from the sale of counterfeit works by artists such as Andy Warhol and Jean-Michel Basquiat, raised eyebrows in May. Not because of the crime (it is hardly the first time a Warhol has been faked) but because of the sentence itself—27 months, plus three years’ supervised release and a $15,000 fine. In comparison to recent fraud and laundering sentences in the art market, two years and three months seems pretty lengthy.

That is not to say that the crime was inconsequential. Sales of fakes for between $75,000 and $240,000 are clearly significant to the victims (indeed, one bought five works totalling $860,000). But given the scale of the crime, two years and three months appears punitive when compared with the three-and-a-half years given to the former art dealer, Angela Gulbenkian, for charges linked to the fraudulent sale of a $1.4m Yayoi Kusama sculpture; or the 18 months received by the Manhattan dealer Ezra Chowaiki in 2018 for scams totalling over $16m. It is even more jarring considering the 82 days spent in prison by the dealer Glafira Rosales for her role in the Knoedler Gallery fraud case, which involved works valued at over $80m.

So, are the courts still confused about how to handle art crimes?

Bewildering logic

The logic behind sentences can appear bewildering if not considered in the context of the myriad factors underpinning a judge’s decision.

“It is not an apples-to-apples comparison with each case,” warns Georges Lederman, a New York-based special counsel at Withers. “Although wire fraud and laundering crimes carry a maximum statutory term of incarceration of 20 years [which is rarely imposed], the underlying conduct of each case is different. It is not the nature of the asset involved in the fraud—in this case, art—that determines the sentence to be imposed.”

Lederman adds that circumstances considered within sentencing include the characteristics of the defendant; the loss amount to the victim; the potential deterrent effect on the defendant; the need to avoid sentence disparities among similarly situated defendants; and restitution to the victims. Jurisdictions also vary in severity of approach.

Glafira Rosales (centre) served 82 days for her part in an $80m fraud involving Knoedler Gallery, the judge acknowledging she had suffered domestic abuse Photo: Jefferson Siegel/NY Daily News via Getty Images

Judges will often note their reasoning. When sentencing Rosales, Judge Katherine Polk Failla explained her belief that the former’s situation within an abusive relationship and concern for her daughter would “exactly motivate what you did”, and subsequently decided to not return her to jail.

Nevertheless, there is a growing sense of injustice in debate around convictions concerning fraud or laundering within the market.

“My view is that these fraudsters tend to get off easily,” says Christopher Marinello, the founder and chief executive of Art Recovery, which represented a victim in the Gulbenkian case. “In the art world, if you are white, rich—or Instagrammably rich, with fake wealth—the justice systems in many Western countries go easy on the perpetrators. Art crime is considered a rich person’s problem. If you are lucky enough to get a conviction and a money judgment, good luck getting back your artwork or stolen funds.”

Need for deterrent

The majority of criminal cases are linked to subsequent civil litigation and claims, but criminal sentences remain significant as a message.

Judd Grossman, a US-based attorney who has represented buyers defrauded in major cases, including victims in the indictment brought against Chowaiki, notes the example of Inigo Philbrick, where the court “specifically noted the strong message that a hefty sentence there would potentially send to would-be fraudsters”.

“Especially given the last decade-plus of high-profile art-fraud cases, our courts are becoming increasingly aware that some aspects of the art market make it particularly vulnerable to fraud, heightening the need for deterrence in sentencing, in addition to the punitive component,” Grossman adds.

Concern from governments does not necessarily filter down into sentencing guidelines, which primarily focus on types of crime, rather than on the assets or sectors involved. An exception to this was seemingly made in 2016 in the UK, however, when the Sentencing Council issued specific advice for sentencing on theft offences involving heritage or works of art.

The apparent ease with which scams are seemingly growing in number is concerning. That Anna “Delvey” Sorokin launched a much-hyped podcast from her apartment—while still under house arrest for multiple counts of larceny and lying about owning a $67m trust fund in order to set up an arts foundation—is a case in point.

“Prices for art have soared; the market has seen an increase in opportunities for bad actors to engage in ever more audacious types of fraud,” Lederman says. “This trend has not gone unnoticed by the courts, and we should expect to see sentences for art-related crimes increase as a consequence”.

Who got what? Sentences for well-known art fraudsters

Who? Daniel Elie Bouaziz

What? Selling counterfeit works of art from his gallery

When? May 2023

Where? Miami, US

How long? 27 months’ imprisonment, three years supervised release, $15,000 fine

Who? Inigo Philbrick

What? Pled guilty to an $86m wire fraud, including selling works to multiple investors, without the others’ knowledge

When? May 2022

Where? London, UK, and US

How long? Seven years and ordered to pay $86m forfeiture

Who? Ezra Chowaiki

What? Defrauding art dealers and collectors of more than $16m

When? September 2018

Where? Manhattan, US

How long? 18 months

Who? Timothy Sammons

What? Using art to defraud clients, between $10m to $30m thought to have been stolen

When? July 2019

Where? US, UK and New Zealand. Jailed in New York state, US

How long? Four to 12 years

Who? Angela Gulbenkian

What? Fraudulently claiming to sell a sculpture by Yayoi Kusama, valued at £1.4m

When? July 2021

Where? UK

How long? Three and a half years

Who? Subhash Kapoor

What? Burglary and illegal export of idols belonging to the Varadharaja Perumal temple. Wider claims of an international smuggling operation have suggested more than $140m worth of transactions can be linked to him

When? November 2022

Where? Kumbakonam, India

How long? Ten years

Who? Glafira Rosales

What? Pled guilty to charges of wire fraud, money laundering and tax evasion within the Knoedler & Co fraud case

When? January 2017

Where? US

How long? 82 days in jail and nine months of house arrest

Who? Gary Snell

What? Selling unauthorised sculptures by Auguste Rodin (his associate, Robert Crouzet, received a shorter sentence for his role)

When? April 2019

Where? France

How long? One year suspended sentence and €500,000 damages to the Musée Rodin.

Who? Michael Zabrin

What? Multi-million-dollar, international fake art ring

When? June 2011

Where? Chicago, US

How long? Nine years. His second prison term—in 1992, he pleaded guilty to selling $800,000 worth of counterfeit fine art prints and served a reduced one-year term after he helped authorities convict another fraudulent art dealer

Who? Lawrence Salander

What? Pleaded guilty to 29 felony counts of grand larceny and one count of scheming to defraud, for his role in unauthorised sales of art (totalling an estimated $120m)

When? March 2010

Where? New York, US

How long? Six to 18 years in prison

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