De Sole et al v. Knoedler Gallery, LLC

Most former customers of the now shuttered gallery just wanted to recoup their losses. Investigators concluded that no fewer than sixty fake paintings had been created at the direction of Fara Rosales. At trial, an accounting expert would testify that Freedman and dealer Julian Weissman had sold their clients seventy million dollars in fakes, yielding a net income of thirty three point seven million dollars for Knodler and generating more

than ten million dollars in commissions for Anne. This was in addition to her salary estimated to be four hundred thousand dollars annually. Michael Hammer took his own four hundred thousand dollars salary plus of both galleries, a near limitless fund, spewing cash to eight thirty one his private holding company. As for Rosales, no taxes had been paid from her

sales to Knodler, so profit estimates varied. The New York Times would later declare that Rosa Alice had taken in about twenty six million dollars from her sale of paintings to the two dealers. That was all money that would have to be disgorged, along with some twelve point five million dollars due to the i R s. Surprisingly, one of the first to settle was Pierre Lagrange himself in

October two thou twelve. Shouting from the rooftops had earned Lagrange some admiration, but also his share of ridicule among collectors for buying a painting without doing due diligence. He had vowed to get his seventeen million dollars back, but Artsy, the online art magazine, published a rumor It's settled for six point four million dollars, being first in line for a refund, had its advantages. There was likely more money in the galleries till to be had. The Desoles, by contrast,

felt bound by a sense of mission. Their lawsuit was aimed at making the true public in a civil trial. Having a judge and jury declare FIRA's forgery ring to be nothing less than a racketeering conspiracy was the real prize for them. Assistant District Attorney Jason Hernandez was taking a very different approach. He was trying to make a criminal case of the notetor's dealings. Surprisingly, it was far from a slam dunk. What we were doing previously is

sort of your art fraud one on one playbook. You've got to prove that the paintings are fake, and you've got to prove that someone who sold them knew that they were fake. But it was very clear that this was going to be especially difficult following our usual kind of playbook in this case, because well, there were an unusually large number of prominent people who seemingly We're going to stand by the paintings and say that they were real. That is uncommon, and I could see right away, well,

you know, how do you get over that? Because if the person selling them is showing them to all of these esteemed people, and they're saying, yep, looks right to me, looks good to me. That's not a criminal case anymore. You're not going to be able to prove fraud that someone intended to deceive, because they'll say, well, you know, this museum director said it was good, and I mean you know, and Freeman bought one of the paintings. It

was well thought out. The truth is all of the experts declined to authenticate the paintings in any official capacity. They've seen them in passing on the notors walls at cocktail parties, but none of the experts had any interest and testifying. You gotta remember it's it's a criminal case, so you have to prove your case to twelve people beyond a reasonable doubt. We weren't really getting anywhere with the conventional investigative methods, and the provenance was very difficult

to di proved. Glafira was alas we know very virtually nothing about. She told nod Lern and Freedom that she was a brokera representing a family that she wouldn't disclose and I can't get hurt to disclose it, so I can't issue her a grand jury subpoena and say tell me the name. She would just assert her fit in

them and right and refuse to tell me. My thought was, I can kind of through the back door figure out whether or not Glafira was Alas represents a family that owns these paintings, because if she's lying about that, that is going to be a crime that I can charge, Okay, because that's in a very important part of the provenance. Imagine if she's lying about this actually being a European family that bought these and stored them over all these decades, well,

that is something I can charge her with. So she says she's a brokera she says the paintings are not hers. I could see that all the money would go from the Nobler Gallery once they would purchase them to a couple bank accounts, I think two or three in Spain. So my thought was, I'm gonna ask Spain that we have a treaty with Spain to for their bank records.

And then if she is a broker, I'm going to see or whatever percentage go to the family in Europe and it's going to go to a bank account in some other country probably and then I lost that country to give me the bank records, and you might prevail there. You might actually get foreign banks to cooperate and give you records that would prove that she had been engaged in financial shenanigans. That's right, let's see where the money flows.

So I took that kind of old approach. Okay, you know, follow the money to the sexier world of art fraud, where you follow the pigments and those sorts of things. And what it showed was that she was lying about who owned the paintings. She owned them, someone else owned them, but she's keeping all the money. So that gave me

a fraud charge against her. Okay, you are falsely representing to the Nobler Gallery that these paintings belonged to you know, then fill in the long story what she told all that that yarn she spun about who it belonged to. I now have leverage against CFIA. I have a criminal charge. It's a lot of money, you know, many millions of dollars of paintings, so it's a significant fraud. And then on top of that, she is not reporting any of this money as income, so there is a tax charge there.

Nor is she reporting the fact that she has formed bank accounts in excess of ten thousand dollars, which is another federal crime. So now the deck is stacked way high against the FIA Rosol. She's kind of got nowhere to run. I have very simple, provable, direct, strong criminal charges against her, and now I can kind of use that as pressure um to get her to talk unless she's willing to spend, you know, a lot of time

in prison. One night, early in the summer of two thout, some eighteen years after his first faithful meeting with Anne at a Soho art gallery, law enforcement agents came crashing through the front doors of Carlos Andrs. Multimillion dollar home. It's very traumatic. They came actually to wake me up. It was very early in the morning, at six in the morning around the time. And then there was the squad.

I was sleeping, My daughter was upstairs sleeping. She was supposed to go to Spain the next day or that day day evening. And they knocked at the door and they told me that they were the police and opened the door. And I saw them, you know, with their weapons, and and I said, can I put something on it? And they say, opened it, opened it. Or else. Of course I opened the door, I saw the I'm drawn in all over my house when they were with the

way pons pointing everywhere. Uh, and then they took me and I wanted to give a hat to my daughter, so they didn't let me. Oh, so it was horrible. We'll be back in a minute. Brian Scarlatto's fear as attorney and family friend took the call while out of

town on a work trip. I recalled because I was in Las Vegas for work, and my wife called to say that Glad had been arrested and that there was a story in the newspaper, which you know, I looked up on the internet, and um, you know, at this point had been a friend of ours for a while, so I felt like I should look into it since you know, it is kind of my area of the law. Glafi had just been arrested and so um, we had

to go into jail to speak to her. But what we found out is is that she had really been arrested for tax evasion, sort of like al capolm and the government couldn't get them, you know, for organized crime. They just followed the money, and in Glafira's case, the government was able to follow the money. By now, after living in Sand's Point for years, had you come to suspect Laphia and Carlos might be art thieves. I did not suspect anything. They did seem to be very successful.

But it was extremely shocking, and you know, and it's shocking whenever you hear about anybody being arrested, but certainly a very nice woman in her you know, later fifties like Fra Brian visited Glafira in prison soon after her arrest. It was a sobering moment for the family attorney who

had come to know Carlos and Fia. Well, you go in and it's very difficult to get in, and Gafa had just been arrested, and in fact, she didn't have enough money for shoes because they take your shoes away and you need a commissary account then to buy shoes, and so she was wearing paper slippers and it was very very distraught, you know, just didn't know what was going to go on Carlo's head, you know, fled and so her daughter, her young daughter is on the outside

with no parents, I mean solely was maybe twenty years old, maybe nineteen years old at this time. It's hard to overstate just how lucky Glafira was to have such a family friend who was an experienced attorney at this moment in her life. After she was arrested, I offered to help, largely on a pro bono basis, because all of her

assets had been seized at that point. Basically, what we were able to do is explained to Glafira how this was going to play out, that the government had, you know, a strong case on the tax evasion charges and that carried very significant penalties. Once behind bars, the first order of business was for a judge to determine whether Glafira

Rosalee was a flight risk. We put together I thought a very persuasive ca ace thatfa you know, had dual citizenship, a boyfriend, with a home into the Dominican Republic, ties I believe to Spain, foreign bank accounts, a lot of liquidity, a lot of assets, you know, at the time, and I'll say it was by no means certain that she would be detained because on the other side of the coin,

I mean, she's never had a criminal case before. She was, you know, maybe fifty something, your old woman with a daughter here in the United States, and so the defense made an argument, a strong argument that hey, you know, she's not going to go anywhere. Why would she go anywhere? She's got all these ties. But thankfully for us, the judge detained her. And although I can't say for certain, I would think that being detained would weigh on someone and make them more likely to want to cooperate and

tell us what really happened. The judge said, no, I'm going to keep you detained because I think you've you you are a flight risk, and so you know, if that was that, she she went back into the m c C or the m d C, one of the two facilities that are used. Well, yeah, you don't want to be there, trust me. She was not in the most difficult spot where like the terrorists and Burne made off go. But no, you don't. You know, you don't want to spend any time there. If you can, if

you can help it. A few months in prison was all Glafa needed. The con was over and there was no one worth protecting. At the cost of sacrificing her freedom, Gafara decided to cooperate, and she provided information about Carlos and about Patience, and after it was clear that Glifer was telling the truth. The government agreed to release her

un bail. Rosales spilled the entire story to investigators. In September two thirteen, she pled guilty to nine counts, including one count of money laundering, one count of wire fraud, and three counts of falsifying income tax returns. She had pocketed twenty six million dollars and paid no Texas. Despite her testimony, Fia was facing as much as nine years

in prison. But this was only the bail hearing. The sentencing would come much later, you know, as we later learned, because of her cooperation, really only because of her cooperation, we've got the two burgan Tinos brothers and Psian you know, involved, and that really broke down the door, okay, to a

wealth of information that only came from her. But as you know most people know, Py Sian as soon as he heard that we were on his tail, took off to China, a country that does not extradite its own nationals. I'm personally much more upset with the Spanish court's decision to non extradite the Bergantino brothers. Amazingly, from a criminal standpoint,

things were looking good for and freedman. If we thought that we could prove beyond a reasonable doubt to twelve people that other people knew the aspects of the scheme, the critical aspects of the scheme, then we would have brought a case. But you know, you've got to have proof. You've got to have proof that's admissible in court that you know someone who was selling the paintings, whether it's Fa as the consigner or and you also have to

prove that she knows that they are fake. So, you know, here you're dealing with a situation where a freedman's first point of contact, Lafia, is lying to her about the provenance. And again the provenance has elements of it that have elements of truth. You know, Sorry, it was a real person. Herbert was a real person. It is actually the case that a lot of art is found, you know, from time to time. What we did in this case was we took it as far as we thought the evidence

that we had would take it. FA had done her part and broken the case wide open for investigators. The bergen Tino's brothers fled the United States for Spain, a country beyond the reach of US extradition. The artist patient Quan hurriedly returned home to China, another country out of reach from u S authorities. That left only Michael Hammer

and Ann Friedman. Neither would be prosecuted on criminal charges or simply wasn't enough proof, but both were still subject to civil suits, where a jury only needed to conclude that a defendant was more than fifty likely to have committed a crime. Monetary settlements from civil suits could inflict their own kind of severe punishment. The fear of such verdicts had led the Knoedler to settle with Pierre Legrange. As for the Souls, their showdown with Ann Eatment and

the Knodler was about to begin. Some three dozen journalists, including our own Michael Schneyerson, who were bent over their notepads that day in the classically high ceiling, oak paneled courtroom. The trial began on a Monday in January two thou sixteen. The list of names who weren't present in court that day was almost as interesting as who was. Lafara Rosalee

wasn't there. Having served three months in jail before admitting her guilt, she was now agonizing over what further sentence she would have to serve and wondering how she would come up with eighty million dollars in compensation for her victims. The Bergen, Tino's brothers were still in Spain, Quan was in China, even Michael Hammer was absent in court. Hammer had not appeared once from behind the Knodler doors since

the gallery closed, nor granted any interviews. But after eighteen years or so of the forgery ring, Michael Hammer looked more and more like a key player, no less so than Ann Friedman, As much was told in a lawsuit filed by one of the victims, casino owner Frank for Tita the Third, who in two thousand eight bought a

fake Rothco for seven point two million dollars. Hammer, the complaint detailed, knew that Knodler bought the paintings from Rosale's for shockingly low prices and quickly resold them for enormous markups for Tita alleged quote. In all, Knoedler resold the Rosealves paintings for a total of sixty three point eight million dollars, realizing gross profits of approximately forty eight point

seven million dollars. Hammer, acting on behalf of Notler and his foundation eight thirty one, saw two of the tens of millions of dollars in profit be distributed largely to himself and Ann Friedman through a Friedman and Hammer had a meeting in the early days of the scandal, and a handwritten memo survived their talk to surface later in Fatita's complaint. It was unclear whether the notes were taken by Freedman or Hammer, but the sentiments were in technicolor

Discreet sources are my stock and trade. When one of the comments, don't kill the goose that's laying the golden egg, went another, and I am not going to change my way of doing business. If you were not comfortable, step away. And Friedman was in the courtroom the day the desolas child began. She sat quietly beside her lawyers, wreathed in her soft white curls, dressed in black, beige and gray,

saying nothing. As the witnesses began to come forward, she too would be forced to testify if the trial went as planned. Luke Nichoas and Freedman's lawyer, had a novel defense. As it turned out. He argued that thess were responsible for checking their paintings authenticity themselves. They were, after all, sophisticated art buyers. By that logic, Nikos suggested the jury shouldn't blame Noldler for selling the their fake art. The customers were the ones to blame for buying it. As

for Anne, she was a salesperson, not an expert. They declared. She was just doing her job, selling paintings and earning profits for the gallery. Here's Luke Nichos with Anne. I certainly wanted to believe, but and I looked at the evidence and where the evidence show and what the evidence showed to me separate and apart from what Anne was telling me was emails from a guy like David ann Fam are the most significant experts and at abstract expressionism.

What did David an Fem say about these works? He wrote an email in May of two thousand eight to Jack Flamm from the Dadalist Foundation, and that email said, I can't think of any reason to deem this newman from the Resolves collection. This newman inauthentic. He went on to say in the same email, I've seen the Krasners, I've seen the Pollux, the roth Codes, the clients and Stills,

and I believe in these works. Now he acknowledged that the story was murky acknowledged that the ownership was unknown. But the reality is I saw an email like that from David and fam and I thought, if David and fem saying that, who am I the lawyer without this expertise? Let me dig further. I think it's important to understand what I concluded about whether they were authentic or not. Wasn't the point. My point is I had no expertise

in whether they were authentic or not. The core question always, always, always was what did Ann Friedman believe and what did she have reason to believe based in the facts. Early in the trial, attorneys for the plaintiffs presented a fascinating exhibit to the court, the Doles eight point three million dollar fake Rothcoe. The thing I remember about it being physically in the courtroom the most is that the defendants immediately wanted a sidebar with the judge because they felt

that the painting smelled new. This is the dissillis attorneys again.

I think the issue was, like all artwork that's transported responsibly, it was in a wooden crate, so the wood was just secured with screws, and the crate got unscrewed, and it creates that kind of wood smell in the air, which made the painting smell like fresh wood, and so they felt it was prejudicial that the painting would smell so obvious we like fresh And the judge had to go over the and smell the painting to assess, and he was, like he said on the record, he was like,

I can't believe I'm going over to smell the painting. Trudge over. He smelled it, and I think they did move it. Yeah, yeah, but they left it out, but I thought. I remember it was very dramatic. We carried the painting over someplace and you know, there was like a hush in the room. Were like a gas because people in the art world are so used to such delicate handling and white glove handling of works like this, and you know it was a fake, so that we just picked it up with our bare hands. We were

not professional. There was the other moment, the funny moment with the painting, when Pulkari said on the stand, like, I think it's supposed to be the other way, you know, like its upside down. Even Stephen Poli was one of the two quote unquote experts who Knowler had hired and paid to look at some of these works, and when he testified about the Rothcoe, he testified that it did it couldn't usually tell with Rothco's which weighs up. A day or two into the trial, the Doles took the

stand to tell the story of their fake Rothco. Eleanor was emotional, Domenico fierce. Both were heartfelt, taking breaks to chat up the press, but they would find themselves subject to the occasional bit of snarkiness for bringing rich people's problems into the courtroom. With the Doles done on cross examination, the trial turned to Ann Friedman's list of eleven experts whose names she had used to authenticate her paintings. None of the eleven had wished to be on that list.

What emerged was what we showed that trial with the witness testimony, that there were no experts who authenticated the paintings. For another, it just didn't happen. You know. The story that the defendants were selling that they believe the works were real and the experts authenticated, that was just absolutely rebutted, totally debunked. With respect to David Ampham, he never was shown a Rothco despite being the world's leading expert in Rothko I don't think it's a coincidence that he was

never shown any the rathcos not one. Not only had I not seen the Disoli painting, I'd never even been in the same moon with it. What I got was a package with a transparencive a painting, a note for man dated July and pretty so this was two thousand and five. I picked it up, looks at the transparencies were about twenty seconds, and put it in the file, filed it away and did not look at it again until then. That's the time of the drial. It sounds as if Anne was doing her best to circulate your

name and your approval of this painting. Is that true? Yes, it's true. I didn't know of the time. I have to say that from the perspective of the present, I felt I was being manipulated, and I don't take commory to that. And when I saw the letter, which had a list of people who had seen the dissol A painting, starting with Christopher off Go, followed by myself, I was

absolutely shocked. I couldn't believe that my name has been put in a letter without my knowing it, without my approval, and effectively so any buyer, it could be constituted as a kind of authentication by Foxing. As the trial entered its second week on February sixteen, as of excitement permeated the courtroom. After all this warm up, An Friedman was due to testify at last. Oddly, however, the judge's chair remained empty as the ten am hour came and went.

At last, the judge reappeared and announced in open court that a settlement had been reached from the dess Grins. Their gambit had paid off. As for Ann Friedman's lawyers, they looked relieved. Whatever they had agreed to pay, it was probably less than the million dollar RICO payment that Theses were demanding. The trial, however, would continue because Michael Hammer and his eight thirty one foundation were not yet

off the hook. Hammer's chief financial officer testified that Hammer, her boss, had awarded himself some twenty luxury cars, including a four hundred two dollar Rose Royce and a five dollar Mercedes. That was all in addition to a four hundred thousand dollars salary he paid himself from his Knodler piggy bank. Anne was scheduled to testify that Wednesday against her former boss about how much the two of them had profited from selling forty plus fake paintings that had

come through the Knodler. Once again, the judge and counselor has disappeared behind closed doors and emerged appearing satisfied a private settlement had been reached between the Desoles and A thirty one. The trial was finally over some weeks later, and agreed to speak to the press. From the start, Friedman said she had regarded the David Herbert collection as a quote puzzle to be solved. She had tried to extract more information from GlyP Era every time Rosalee arrived

with another painting. Only with Rosalee's confession had an realized how thoroughly and classically duped she'd been. Or so she said, when you ask a calm artist a question, they say, aha, I see what you mean. Let me check it out, and miraculously they have the answers and be called. She called herself a perfect mark and added I have never

deliberately done something wrong, which is to say knowingly. But then she added a jarring remark, I am terribly sorry for anybody hurt or damaged, but let me be clear, this is about works of art. I didn't slay anybody's first born. We have to have some perspective on suffering, or, as a sympathetic historian apparently told her, we all need to get over it. More art fraud in a minute.

The Disilers lawyers felt pleased they've gotten their clients the outcome they wanted, but the settlement allowed Freedman to crow and declared she would have gladly had the trial go on, and was sure that jury would have found her innocent, if only on a technicality. The Disols lawyers roll their eyes at that things got resolved before the journey got to reach its verdict. But you know, we did speak to the jurors afterwards. They were completely convinced that she

knew exactly what she was doing. Despite the fact that a jury never actually ruled on the case in court, the Doss and their lawyers saw the outcome as an overwhelming victory. I think that you're looking maybe you're suggesting that you need a verdict through your story. I don't think so. I think you need to tell the story

and put it out there to show what happened. And they did a d of that, and it's not a coincidence that the five cases that were pending you know at the time we settled, also all settled and no one went to trial. You know, I'd say, you know, no other and Freedman and Freedman didn't step up to defend themselves and go to trial on any of those

five cases that followed. The rulings made it crystal clear that, you know, collectors have the right to reasonably rely on reputable galleries, and that it's the reputable galleries obligation to come forward with what they know and what they don't know about works that they're selling. As attorney Luke Nicas felt, the settlement only confirmed the case that he had argued.

Not only was she not prosecuted, but when the superseding indictment came out, in which Glafira Resolis had told her story to the federal government, it was clear from that indictment that Anne was not implicated at all in the underlying crime. He had every reason to throw in under the bus. Her boyfriend had every reason to throw in under the bus. The painter did. Everyone did, and at least from that superseding indictment, it was clear they didn't.

And when you look at all of the information, not just pieces of it, and you put it together and you ask did Anne believe these works were fake at the time, I just don't think you can get there. You can say she made mistakes, but the prosecutor needs to prove beyond that, and I don't think they could. It had now been three years since was arrested, three birthdays, three Christmas, is out on bail, nervously awaiting her sentence

on nine federal charges. During that time, Rosalee had broken no laws and had helped prosecutors to the extent that she could to track down the Bergantino's brothers. They remained at large due to Spain's changing extradition rules. In weighing her sentence, Judge Faiala had listened to Lafas story of physical and emotional abuse at the hands of Carlos and found it credible. As Jason Hernandez suggested, the judge had seen a culprit left holding the bag while the rest

of the ring went free. Enough was enough. In January two thousand seventeen, the judge sentenced her to time already served eighty two days. Lafra was a free woman. She was also broke, but their lives are very difficult because everything that they had could be traceable to, you know, their art business, which was fraudulent or infected with frauds.

So everything was seized. Their home was seized, all of their money was seized, all of the art was seized, and so far in her late fifties, had to build herself back up. So she now works part time as a hostess in a restaurant in her sixties and as a waitress from time to time, and solely is involved in the art business and is building her own business and knows how to do it right, and is supporting

her mother. And so you have the story of a daughter supporting her mother and their father is still very much very antagonistic. Carlos is very antagonistic, but he's he's off in Spain. The government, as you probably tried to extradate him and was unsuccessful in doing so. The fall of the Knodler Gallery would have rippling effects throughout the art world. Gretchen Deep and Corn described the seismic shift and trust between client and gallery. I think it's terrible

for the art market. For example, right after the first revelations in the New York Times story, the dealer. Our current dealer began getting phone calls about, oh dear, it is the work that I bought? Is it real? And it wasn't only our dealer, it was others. And then all of the dealers are under suspicion now because it's never been a field that has seemed entirely squeaky clean anyway,

because things happen, you know, people get better. One person gets a good deal, the next person doesn't, and they're they're mad, and so, I mean, nobody trusts anybody in this kind of world anyway in some way. But this made it a hundred times worse. David and fam didn't hold back in his blistering opinion of the Knoedler scandal. In hindsight, I think the whole Knodler story will go down as one of the worst scandals of its kind, indeed probably the most shameful for law go in the

Annals of Martin. What could prove even more interesting is a verdict of history upon whoever the gods as being of the episode who of the Soldid saga from first to Lost, Having followed the fall of the Knodler Gallery from the first revelations of forgery through the trial and the half dozen settlements, I'd come to realize that this case was far from a once in a lifetime phenomenon.

As we've heard from countless artists, dealers, and collectors, the art market has been and remains a target rich environment for con artists willing to risk prison time for a big score. There's the fascinating case of Intego Philbrick, a young and charming London based dealer who oversold fractional shares of works by hot new artists in a made off

like Ponzi scheme. There's also the case of aging artist Robert Indiana, creator of the iconic love Works, whose Coterie of Assistance on an island off the coast of Maine, would be accused of squeezing windfall profits from him, going

so far as to employ an automatic signature signing machine. Finally, there was my own brush with art fraud, in which a painting I purchased from an artist I adored through his longtime dealer Mary Boone, would end up pitting us against each other in a bitter legal battle I never could have anticipated. We'll talk about all of those cases in our final episode of Art Fraud. Ny Arn't Fraud is brought to you by I Heart Radio and Cavalry Audio.

Our executive producers are Matt del Piano, Keegan Rosenberger, Andy Turner, myself, and Michael Snayerson. We're produced by Brandon Morgan and Zach McNeice. Zach also edited and mixed this episode. Lindsay Hoffman is our managing producer. Our writer is Michael Schneyerson.