Fake it When You Make, the Big Ab-Ex Scam

Earlier this week the art world got yet another pie in the face, when Federal agents indicted an

Earlier this week the art world got yet another pie in the face, when Federal agents indicted an art dealer who had made $20 million selling forgeries of famed ab-ex painters; Jackson Pollock, Robert Motherwell, Mark Rothko, Franz Kelin and others.

The scam had been going on for fifteen years and involved reputed gallerists, museums, and private collectors. In total it is believed that $80 million dollars had exchanged hands as these works circulated through the secondary market.

A Jackson Pollock fake, giving new meaning to “anyone can do that.”

We had a chance to talk to Hong Kong art dealer Dominique Perregaux, to ask him how these kinds scams can happen in a world of connoisseurship and the availability of high-tech art forensics. Perregaux also recently published a work of fiction, “A Taste for Intensity,” based on events in his life.

Moon: What would cause an art dealer, who I would assume is a highly skilled connoisseur, to accept lock stock and barrel not just one fraudulent work but a whole catalog of fakes?
Perregaux: Assuming that such a dealer is not part of the scam, I think two factors may cause such a person to unknowingly recommend to their clients so many fake masterpieces through a long period of time: trust and greed. It is important for a dealer to have access to art works that are directly coming from collectors, without going through numerous intermediaries.

This gives the dealer a strong competitive advantage, increases the chances of selling works and maximize the potential gains from such sales as commissions would not be shared with many intermediaries. So if someone the dealer knows well and trust has exclusive access to a large collection of art works his guard will be somehow off. Furthermore, the sale potential of such a large collection (greed) would be a further factor for trusting that person “too much.” Also, selling such masterpieces requires proofs of authenticity. Yet, forging documents is easier than making a copy of a painting!

Robert Motherwell, forgery by Pei-Shen Qian a 73 year-old artist living in Queens.

I understand that one of the ways in which these paintings were uncovered to be fakes was that pigment/chemical analysis on two paintings by Robert Motherwell. However, these paintings were being released onto the market for 10 years before anyone checked. Why did it take so long for anyone to do forensic tests before they were even brought to market?
In art, forensic analysis is usually made for century old masters to date particular works that lack proper documentation or living witnesses (obviously). For 50-60 year old paintings (Motherwell, Rothko, Pollock, de Kooning, Kline…) you usually won’t do any forensic tests as there would be a lot of documentation available on the art works and their provenances and you could actually still paint a fake with 50-60 years old pigments, stretchers and canvas. You would also likely have access to living experts who knew the artist and may have published catalogue raisonnés or to foundations taking care of the estate of an artist and that may authenticate works.

If a collector buys a painting from a reputable dealer and that documents look legitimate, then he may not question the authenticity of such painting. What may have happen in the particular case you are referring to is that an expert or a foundation decided to published a catalogue raisonnés few years ago and, thus, asked collectors to come forward with works they own to be included in the publication. Or one of the works was to be sold in auction and doubts were cast then. Forensic analysis as a last resort if experts could not agree may have then been ordered, explaining the time lag between the purchase and further investigation.
What kind of due diligence should dealers undertake before releasing a work or a catalog of works into the market?
A dealer should have, first, as many documents about an artwork as possible (provenance history, certificate of authenticity if there is one, condition report, art loss register proof, reference numbers if any, catalogue raisonné reference if any, etc.). The painting should also, usually on the chassis, bear traces of its history. As I mentioned before, the provenance is very important. If there is no doubt on the provenance and that documents seem legitimate, the dealer may propose the art work to his clients. If a client is interested, he/she may bring over an expert of his choice to inspect the painting further before purchasing it.

How did you move from the investment world into the art world? Are there similarities in the business model, in way one chooses a good investment, etc.?

I come from a family who loves and collects art. In Switzerland we have more than 1,000 public and private foundations for art. Since I was a child, I have visited, on a regular basis, museums, foundations, galleries or artist studios with my parents. I became a collector myself in my late teens and continued and grew my collection during my banking years. So it was quite easy for me to decide on opening a gallery when I quit finance.

The main difference between stocks, bonds or commodities trading and art is that there is no “stock market” for art. Art is actually one of the least liquid asset classes. There are many places where someone can buy and sell art (galleries, dealers, auctions, some online sites, etc.) but there is never a guarantee that a work could sell at the first attempt, whatever the fame of the artist or the rarity of the art work.

Another big difference is the profile of the people working in the art world. In finance, most bankers would have similar education and would work with firms licensed to trade on certain markets, or would have to be licensed themselves. In art anybody can decide to open a gallery or become a dealer. So the profile of people working in the art world is much more varied, which makes it, with the absence of a regulated “art stock market” and given the large amount of money exchanged, a tougher field than finance, surprisingly. Usually people who have studied art would end up working for a gallery, a museum or an auction house. But gallery owners or dealers are entrepreneurs, and that requires other skills and drive than only the love of art.

What compels you to sell art versus any other commodity? How do you separate potential market value of art from just “loving” a work for its aesthetic sake alone? Is it possible to even separate the two as a dealer?
I am selling art because I love art and culture. It is basically a passion. I would definitely not have the same excitement in trading frozen orange juice or pork bellies! I also lost trust and interest in stock markets after the corporate governance crisis of 2001.

As a gallery owner, I usually represent artists that I, first of all, admire and whose works I like but who are also part of a certain “league.” This means that they are represented by other established galleries overseas and that they have regular important exhibitions in reputable institutions. So if artists already well established or upcoming who are part of this “league interest a collector or an investor” they do not need to worry about the investment value -it is there- and can therefore fully appreciate the art for their conceptual or aesthetic value. So when you have certain knowledge about art, you can indeed separate the investment from the art appreciation as at the end, good art will always appreciate in value.

What do you look for in a work of art or artist that you want represent?

I want to have the feeling that I have not already seen similar style when I experience the work of an artist for the first time. Then the depth of the work (ie. the concept), its originality and the maturity with which the artist created the piece are important. If these criteria match, I may then consider representing such artist.

Can you tell us about how the Asian art market has changed in the last decade and its impact on the Western Art World?
The biggest change that took place in Asia, in early 2004, was the Chinese contemporary art boom, initiated by Christie’s and Sotherby’s in Hong Kong. Mainland Chinese buyers but also Taiwanese, Singaporian or Korean entered the market and were doubling their money in few months mainly on artists from the Cynical Realist trend such as Xiang Xiaogang, Fang Lihun, Yue Minjun, Wang Guangyi or Zeng Fanzhi. Many of the works sold were only few month old and may never have been shown anywhere before. I am not sure if this radical change came from the same practices by Christies’ and Sotheby’s in Hong Kong but soon after 2004, these same auction houses started to be more aggressive in selling living artists works in New York or London.  The peak of such practice was the sale in 2008 by Sotheby’s of Damien Hirst own’s 223 work of art.

These days, the Asian market is still being dominated by Chinese art but as the Cynical Realists bubble has burst, more interest is now switching to other countries, notably to Indonesia. Yet in Mainland China, more than 350 auction houses now exist, with the two main ones, Poly and Guardian, being state owned. Amongst the 10 more expensive artists worldwide, 6 are Chinese…..yet only traded in Beijing or Shanghai and often as a mean to convert art into cash…

The book you’ve written is a memoir, a love story… or maybe its a love lost story. I actually read through your manuscript online this afternoon, having experienced a similar romance I was compelled to read to the end to find out how you resolved things. What made you write such a personal work? Were you actually writing to your former lover, as the muse?

A Taste for Intensity is a novel but, indeed, based on actual events. Writing the book was not only cathartic but really an act of resilience. I reversed the energy and used this traumatic story as a strength, instead of something that would break me, as the the inspiration behind writing the book. Boris Cyrulnik wrote: “Writing the tragedy that I underwent, I transform my sufferings into a beautiful thing. In making you smile, I take control over my own suffering and I transform my destiny into a story. Here we are. It happened to me. I have been wounded. But I do not want to continue my life with it; to be subject to my past. Only one event can provoke death, a little is needed. But when we come back to life, when we are born a second time and that the hidden area of memories emerges, the fatal event becomes holy as it personifies the instance of the metamorphosis, the magic wand, that shows us that there was a before and there will be an after.” That’s the core of resilience and one of the most important concepts and messages in my novel.

Having made your own work of art based to the subject of your ex are you finally purged of that siren?

Yes, recovering from traumatic events through resilience allows you to make sense of the suffering. I can now look back, look the trauma in the eye with certain sympathy as if I had not gone through such an ordeal, I would never have written the book. I made sense of the trauma and this is the best way to recover from it.

Dominique Perregaux began his career as a stockbroker and was consistently ranked “best stockbroker” in the Asian Markets in Switzerland. After leaving finance, Perregaux relocated to Hong Kong and opened the first contemporary art gallery there, representing well-known international artists. Six years later, he opened another gallery branch in Tokyo. His recent novel A Taste for Intensity can be found on amazon.com, and barnesandnoble.com as well as other stores in the UK and HK.