Pablo Picasso once proclaimed, "we all know that art is not truth." When it comes to the world of fine art these days, truer words may have never be spoken.
Thanks to advances in global communication and technology, fine art forgeries have become big business. Currently, the FBI estimates that art theft, fraud, looting, and trafficking across state and international lines is a "looming criminal enterprise with estimated losses running as high as $6 billion annually." Indeed, crimes against art have become so popular that the FBI has a dedicated "Art Crime Team" comprised of 13 Special Agents responsible for investigating art crime and bringing criminals to justice.
Art counterfeiting scams can be sophisticated and global in nature. For example, in March 2008, federal criminal charges were filed against seven individuals who, between July 1999 and October 2007, caused counterfeit prints of works by Pablo Picasso, Marc Chagall, Andy Warhol and others, to be manufactured in Spain and Italy – complete with forged signatures and fabricated certificates of authenticity. The bogus works were then distributed to various art dealers in the U.S. who knew they were counterfeit yet sold them as "limited edition" prints to wholesale and retail customers. Many of the prints were sold through eBay. Together, the seven defendants allegedly reaped more than $5 million dollars in illegal proceeds.
The U.S. legal system provides several options for dealing with art forgeries. Defendants are susceptible to criminal prosecution under federal laws, including the Racketeer Influenced and Corrupt Organizations Act ("RICO") and federal wire fraud or mail fraud statutes, where applicable. Defendants may also be prosecuted under state criminal laws that prohibit fraud and forgeries. Art forgery may also be subject to civil sanctions, including liability under the Federal Trade Commission Act and state statutes concerning fraud, material misrepresentation, etc.
The impact of art forgery is not limited to artists and collectors, but rather may have a significant influence on the U.S. economy and security. According to the International AntiCounterfeiting Coalition (IACC), counterfeiting costs U.S. businesses $200 billion to $250 billion annually. In addition, counterfeit products are directly responsible for the loss of more than 750,000 American jobs and, since 1982, the global trade in illegitimate goods has increased from $5.5 billion to approximately $600 billion annually. Moreover, terrorist operations, including the 1993 attack on the World Trade Center and the 2004 Madrid train bombings, are funded through the sale of counterfeit goods.
So, it behooves as all to act with caution and skepticism when a deal looks too good to be true, because it probably is.