The Art of the Con: The Most Notorious Fakes, Frauds, and Forgeries in the Art World (19 page)

Moreover, in 2012 the Art Loss Register announced that according to its stolen art database, Picasso’s works have been stolen more than those of any other artist. The ALR reported that there are 1,147 stolen Picassos, outpacing the second-most-stolen artist—American painter Nick Lawrence—by more than 2 to 1.
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Picasso’s link to art crime is not only as victim. In 1911, when arguably the most famous painting in the world, Leonardo Da Vinci’s
Mona Lisa,
was stolen from the Louvre, a young Pablo Picasso was considered a prime suspect, along with his associate, the poet Guillaume Apollinaire. As it turned out, Picasso’s connection to a roguish character named Honoré Joseph Géry Pieret—who himself had pilfered some objects from the Louvre—was the cause for the suspicion cast upon him and he was, of course, eventually removed from the list of suspects.
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Stolen paintings were on the mind of Canadian journalist Joshua Knelman when he was tagging along with legendary LAPD art crime detective Don Hrycyk and his partner as Knelman did research for his book
Hot Art: Chasing Thieves and Detectives through the Secret World of Stolen Art.
Coincidentally, the author and Hrycyk encountered Tatiana Khan in her home in Los Angeles. Knelman described the scene:

The detectives walked around to the rear of the house. They found a door in the fence and slipped into the back garden, which was full of statues and plants packed tightly together. A narrow path led to a back door. They knocked. A Hispanic caregiver answered and invited them inside. The back hallway opened into a yawning room, two floors high. The room was packed full of antiques and paintings. It was chaotic; it looked like the piled-up remains of what once was a thriving antiques business. An old woman sat in a chair near a row of television screens filled with images from cameras. . . . Before they left, both Hrycyk and [his partner] had noticed what looked like a Picasso perched carelessly on a cluttered sofa. They inquired about it, and the woman told them it was a genuine Picasso worth a huge sum of
money. Hrycyk surreptitiously took a photo of the painting with his cell.
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That Hrycyk would have a sixth sense about the work is not unusual. For more than 20 years, he has investigated art theft and forgeries for the Los Angeles police and is arguably the best investigator ever to work art crime cases. While most cops would probably have believed they had stumbled upon some sort of eccentric—or deluded—Miss Havisham character, Hrycyk knew something was amiss with the work. But it wasn’t until another law enforcement officer with a strong background in investigating fraud was on the case that Khan’s scheme would fall apart.

Because of Dr. Mallen’s findings declaring the Picasso pastel
La Femme au Chapeau Bleu
sold by Tatiana Khan a fake, the matter was referred to the Federal Bureau of Investigation and placed in the able hands of Special Agent Linda English. English had spent nearly 20 years with the FBI when she was assigned the case. With an expertise in fraud and financial crimes investigations, she was well equipped to look into a forgery scam involving millions of dollars in investments. Earlier, she had been the lead agent whose dogged investigative work cracked a major financial fraud scam involving a real estate investor who concocted an elaborate Ponzi scheme through which she convinced 600 people to invest $18 million in foreclosed properties. She also brought down an even larger Ponzi scheme—second only to that of Bernie Madoff—when her work led to the arrest of Reed Slatkin, one of the cofounders of EarthLink. Slatkin had left his ministry in the Church of Scientology to prey upon investors, including some members of his former flock and Hollywood celebrities, ultimately bringing in nearly $600 million from his dupes. English’s work on
these cases was noteworthy enough to warrant two segments on the CNBC television show
American Greed.

English went to work scouring Khan’s financial records, and she contacted former customers who told of their experiences buying from Chateau Allegré under the impression that they were buying items from the Forbes Collection. She examined wire transfers to confirm payments from Vic and Jack for the pastel, and then twice met with Tatiana Khan herself at her home and gallery in Los Angeles.

The investigator found Khan to be “sickly,” with an oxygen machine and severe scoliosis, and her gallery “packed full with antiques and furniture.” English—who had interviewed countless scam artists in her career—was quickly onto Khan’s scheme, though she did think Khan “was a good liar,” as she recalled, “and used her frailties to her benefit.”
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Also aware that Khan had used the Forbes Collection provenance to establish her bona fides when selling Vic and Jack the fake Picasso, English asked Khan how she came to acquire the piece. The art dealer told the FBI agent an entirely different story than the one she used to make the sale to the pair of investors. This time, Khan stated that she obtained the pastel from a woman named Rusica Sakic Porter around 2005. According to Khan, Porter was an aesthetician she had met when one of her gallery employees visited Porter for a facial across the street from Chateau Allegré. As is the case in many provenance scams, Khan used war to explain the artwork’s dicey history, saying that Porter’s family purchased the work before the Bosnian War. Khan told English that Porter borrowed $40,000 from her and gave her the Picasso as collateral for the loan.

Khan developed the story even further, telling the FBI agent that she had a document she obtained from Porter. She retrieved it and handed it to the investigator, and explained that she had cut
the top of the page off because it had the price paid by Porter’s family—$300,000—on it. In order to get a current market value for the work, Khan claimed she contacted Christie’s and Sotheby’s and received values ranging from $2 million to $5 million. Nevertheless, she sold it to Jack and Vic at the low end of that range in order to move it quickly.

Khan’s story became more elaborate still. She told English that after she sold the Picasso, she told Porter that she would determine how much money she owed to her from the sale. Because she was soon departing for a trip to Bosnia, Porter told Khan to pay her bills for her while she was away and upon her return they would make arrangements to settle their finances. However, about a year after her return from Bosnia, Porter died, according to Khan.

English discussed with Khan her claims about selling items from the Forbes Collection. Khan admitted that she was being sued by two former clients about falsely representing that the items she had sold them came from the Forbes Collection. In a departure from what she had told others, Khan told English that she had merely sold a cabinet and some books with Forbes’s stamp in them.

Now Khan had provided two completely disparate provenances for the pastel, neither of which was based in the truth. But the truth was known by English, who described the dealer as “the consummate con.”
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On October 8, 2009, English interviewed Frederick Hudson, the art broker who had originally supplied the photo of the available—and authentic—Picasso
La Femme au Chapeau Bleu.
During his meeting with the FBI agent, Hudson was forthcoming about his interactions with Khan related to the Picasso, from the moment he sent her the images of available art to her seemingly serendipitous stumble upon the pastel at the home of a woman in Palm Springs. While meeting with Hudson, English reviewed provenance information held by Hudson for the works he was dealing. She noticed that
the record Khan produced, which had allegedly belonged to the Porter family from prewar Bosnia, matched Hudson’s records perfectly but for Hudson’s letterhead graphic at the top—the portion that was ostensibly cut off by Khan to remove the original price. English clearly had damning evidence in the case: an apparently forged record of ownership and the third provenance story that Khan had used. This, combined with the findings made by Mallen of the On-line Picasso Project, made it clear that Khan knowingly was shopping a fraudulent piece of art. English now had all she needed to make her case against Khan. But one question remained: Where did it come from?

Special Agent English didn’t have to wait long to find the answer to that question. The very next day after she interviewed him in person, Frederick Hudson telephoned her with a piece of information that he recalled in the hours since their meeting. Once, he recounted, when he was at Chateau Allegré, he was introduced to an art restorer named “Maria,” a trompe l’oeil artist who had regularly worked with Khan. Hudson told the investigator he was shown a book of her work and that he found Maria’s work was “remarkable.”
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English tracked down Maria Apelo Cruz based on Hudson’s information, and because her years of investigating complex fraud schemes had taught her the value of meticulously examining all of the data before her. After she had gone through the larger entries in Khan’s financial records and ledgers, she moved to the smaller expenditures and followed up with the individuals with whom Khan had dealt. She came across a $1,000 payment to Cruz and paid her a visit. After discussing some furniture that Cruz had restored for Khan, English had a question for the artist: “Have you ever seen the painting
The Woman in the Blue Hat?
” Cruz’s response took the seasoned agent aback: “I painted that.”
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English said she was in “complete shock” when she learned that Cruz had been the artist of the phony Picasso, especially because of
the paltry sum she had been paid for creating a work that sold for well over a million dollars. While the FBI agent had been involved in cases involving many millions of dollars, this was her first art case, and the nuances of the art world—both legitimate and illicit—were new to her. Now she was studying up on details like provenance and the authentication of paintings. So while an agent from the bureau’s Art Crime Team might not be surprised to hear that an unwitting forger was paid only $1,000 for a painting, it was news to English. And that’s not to say that the fake wasn’t well done: English would later recall that the prosecutor on the case, an art aficionado herself, considered Cruz’s copy to be “beautiful.”
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The artist, who English found to be “very credible,”
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went on to tell of Khan’s visit and commission to reproduce the pastel in order to help the police trick a thief. And then Cruz described a later visit from Khan in which the dealer predicted the FBI agent’s visit on the topic of the pastel. Cruz informed English that Khan instructed her to lie to the FBI—a federal crime—by stating that she hadn’t copied any art for her. Instead, Khan said, Cruz should simply say that she had restored art for her. She then went a step further and told Cruz to falsify her invoice for the work by indicating that the $1,000 fee was for retouching work on a primitive painting. Cruz told Khan that the request made her feel uncomfortable and refused to take the invoice back in order to make changes. Concerned about what she was hearing, and unwilling to run afoul of the law, Cruz asked where her copy was and Khan was cryptic, saying that she had given it to a friend.

In order to cover all of her bases, English continued to hunt down possible leads she found in Khan’s financial records. Though the majority of the items Khan sold were antiques and furniture, she had bought and sold enough paintings to lead the investigator to create a spreadsheet listing them and their provenance in order to ensure that this affair was not part of a larger scheme.
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After English
had tracked each of them down and completed her work examining Khan’s finances, it was time for the bureau to move on Tatiana Khan.

Khan’s attempt to get Cruz to falsify the invoice and mislead the FBI constituted witness tampering, and the false provenance story she gave to English during the interview constituted providing false statements to the FBI. Further, the electronic financial transactions she conducted with Vic and Jack constituted wire fraud. So, on the morning of January 8, 2010, federal agents visited the home of Tatiana Khan and presented her with a summons directing her to appear in federal court for an initial appearance nearly three weeks later. During a search of her home, investigators came upon a de Kooning painting that she purchased with the ill-gotten gains from the counterfeit Picasso. As a result, the feds seized the $720,000 painting from the home.
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The charges against Khan brought with them a maximum sentence of 45 years in federal prison. Now approaching 70 and in ill health, Khan and her attorneys decided to accept responsibility for her crime in what would have been a slam-dunk case for prosecutors. It was a wise move: federal probation officers responsible for compiling a pre-sentence recommendation to the judge cited her extremely poor health as a reason for a downward departure in the sentencing guidelines for her crimes. Sparing the government a trial would also spare Khan a long sentence.

Khan’s attorneys, James Spertus and Amanda Touchton, described her extensive cardiac and respiratory problems as not only cause for a sentence of probation, but as the reason for her crime. “Ms. Khan will not survive any sentence of imprisonment. Ms. Khan committed the crimes of conviction while suffering from extreme financial pressures that resulted from overwhelmingly large medical bills. Ms. Khan has no medical insurance, she turned 70 this year,
and she [is] under a crushing debt from staggeringly high medical bills.”
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Federal prosecutors did not put up much of a fight to put Khan away for a substantial amount of time, and she was sentenced to five years’ probation. There was, however, an additional component of the sentence: $2 million in restitution. Toward that end, Khan agreed that the de Kooning painting, which had been seized by federal agents under asset forfeiture rules, should be turned over to Vic, who would inform the court of her cooperation with regard to restitution.
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