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Report: “New Allegations Against Knoedler Gallery Claim It Sold Yet Another Fake Rothko” – UPDATED

January 31, 2013
Knoedler Gallery,New York. Courtesy Mihail Lari via Artlinked

Knoedler Gallery, New York. Courtesy Mihail Lari via Artlinked

UPDATE: Glafira Rosales, the Long Island dealer and source of the paintings at the heart of this scandal is going to jail. According to Artinfo:

Glafira Rosales, the Long Island dealer who is at the center of an $80-million art fraud scandal, pleaded guilty in federal court in downtown Manhattan this morning to nine counts including wire fraud, tax evasion, and knowingly selling fake art. Rosales, who remains free on bail, is scheduled to be sentenced six months from now, in March 2014. She faces a maximum of 99 years in jail on the combined counts. According to a press release from the U.S. attorney’s office, she also agreed to forfeit $33.2 million, including her home in Sands Point, New York, and to pay restitution in an amount not to exceed $81 million.

Here’s the complete plea agreement.

ORIGINAL POST: Julia Halperin at Artinfo.com reports a new lawsuit has been filed against the now shuttered Knoedler Gallery for allegedly knowingly selling a fake Rothko painting.  The work, Untitled (1956), was sold to the Lichtenstein-based Martin Hilti Family Trust in November 2002 for $5.5 million.

According to the article:

This is the fourth lawsuit collectors have filed against Knoedler Gallery in 13 months over questionable modernist paintings that passed through its doors. One suit, brought by London-based hedge fund manager Pierre Legrange, was settled in October for an undisclosed sum. Legrange bought a Jackson Pollock drip painting from the gallery in 2007 for $17 million and later claimed that forensic analysis proved it was a fake.

Supposedly, Michael Hilti purchased the Rothko painting on behalf of his Lichtenstein-based family trust in November 2002 for $5.5 million. According to court papers, the painting is part of a trove of works Knoedler sourced from Long Island dealer Glafira Rosales, who is currently under FBI investigation for trafficking forged paintings.

Knoedler allegedly purchased the questionable Rothko from Rosales in January 2002 for $750,000. (The suit somewhat cheekily claims that is “a suspiciously low price for a ‘Rothko.’”) When Freedman offered it to Hilti that fall, she concealed the fact that the gallery owned the work “to avoid questions they knew they could not credibly answer, such as when Knoedler bought the work, from whom, for how much, and under what circumstances,” according to the claim.

Instead, the gallery told Hilti that the painting came from the immediate heirs of a private collection in Switzerland, according to the suit. Rosales told Freedman there were few records of the original purchase because that the collectors usually paid for their paintings in cash.

What a mess!

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