Glafira Rosales, a Long Island art dealer at the center of a scandal involving sales of purported fake paintings by Abstract Expressionist masters, was arrested in Long Island today and charged with filing false tax returns and failing to disclose a foreign bank account to the Internal Revenue Service. The charges were announced by U.S. attorney Preet Bharara, Toni Weinrauch, special agent in charge of the New York field office of the IRS criminal investigation division, and George Venizelos, the assistant director of the FBI’s New York office.
According to a statement, Rosales allegedly failed to report the receipt of at least $12.5 million in income from the sale of works said to be by celebrated Abstract Expressionists. Most of the income was received in a bank account in Spain that Rosales allegedly hid from the IRS. She was scheduled to appear in federal court in Manhattan this afternoon.
In recent years, Rosales’s name was at the heart of at least three high-profile lawsuits that collectors brought against the now-shuttered Knoedler gallery and its former employees. In numerous cases involving the sale of multimillion-dollar paintings by Robert Motherwell, Jackson Pollock, and Mark Rothko the buyers in question were told that their works originated from a Swiss mystery buyer who purchased the work directly from the artist or someone close to him. After the buyer died, his son and heir enlisted Knoedler to sell the works.
In the case of the supposed Rothko, “Untitled” (1956), was originally purchased for $8.3 million in 2004 by former Gucci executive Domenico de Sole, his wife, Eleanor, and their daughter, Laura. In their $25-million lawsuit filed in 2012, the plaintiffs said they now believe that the “compelling story” they were told about the source of the paintings was actually “a scam.” According to their complaint, Knoedler and its former president, Ann Freedman “had no idea, and still don’t know, where the work came from, other than that it was obtained from Rosales, the source of a supposed treasure trove of about 20 previously undiscovered works,” that renowned dealer David Herbert had helped the Swiss buyer amass. According to their claim “not one work…has a single piece of paper establishing its provenance before arriving at Knoedler.” The case is currently in discovery.
Yet another suit, settled on confidential terms late last year, had been brought against Freedman and Knoedler by London-based hedge fund manager Pierre LaGrange, who in 2007 had purchased a purported Pollock painting for $17 million after also hearing the same story about Herbert and the Swiss collector. Both the Pollock and the Rothko were submitted to a scientific paint analysis. Knoedler abruptly closed its doors one day after it received a negative scientific report on the Pollock.
In the lawsuit involving a Motherwell “Spanish Elegy” painting, Rosales paid more than $500,000 in late 2011, towards settlement of the dispute when the painting was deemed a forgery after forensic testing.
The federal charges against Rosales reference these disputes and the subsequent federal investigation it sparked. “In contrast to the claims made by Rosales,” the statement reads, the investigation has revealed that “the purported Swiss client on whose behalf she claimed to sell most of the paintings to the Manhattan galleries never existed; experts in the fields of art, art history, and materials science have concluded that at least several of the paintings sold by her are counterfeit, and instead of passing along a substantial portion of the proceeds of the sale of the various paintings, she kept all or most of the proceeds and transferred substantial portions to an account maintained by her boyfriend.”
On each of three false tax return charges, Rosales faces three years in jail and a fine of up to $100,0000. On each of five charges related to concealing the foreign bank account, she faces up to five years in prison and fines of up to $250,000.
— Eileen Kinsella