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Shades of Grey

How one art consultant finds clarity in the murky world of art claims.

July 28, 2009 Photo
A first glance at an Henri Rousseau or a Pablo Picasso painting and one might exclaim, “What? That’s worth money?” Of course, that’s to an untrained eye. An art aficionado would surely see the value, but would it be the same monetary value as the insurer sees? Art loss claims are as clear-cut as Claude Monet’s Impression of Sunrise. Values, authenticity, and cause of loss all have to be established, and often it takes some digging and some doubting.

In 1998, we found ourselves engaged in a case straight out of a “Columbo” episode. Our firm’s services were retained by an insurance company to evaluate a claim involving approximately 20 oil paintings that were reported stolen from a restaurant. The owner of the restaurant was a doctor by profession; we’ll call him Dr. X. Throughout the course of the investigation, we never had an occasion to meet Dr. X face-to-face. The most significant thing that we knew about him was that he was asking for $180,000.

Our examination of the stolen artwork generated a far different figure. Our tools were straightforward: an inventory list and a series of photographs. Based on our informational and visual assessment of the works, we arrived at a solid, approximate value of $40,000. Indeed, there was a discrepancy between the doctor’s number and our number, but words such as “fraud” didn’t exactly cross our minds.

No, fraud didn’t cross our minds until two years later in 2000 when another claim came in from a different insurance carrier. Evidently, a set of water-damaged paintings was in need of our evaluation, and we were to meet the insured at his home. Nice home, standard meeting. We had no reason whatsoever to question the motives of the insured. That is, until he submitted the same exact inventory list from the 1998 claim. We were once again in the presence of Dr. X, only this time it was clear that he was more than a doctor—he was in the art fraud business.

Instantly, our company contacted the initial carrier from 1998 and reported the incident to their special investigation unit. Dr. X was thoughtful in his efforts, switching carriers from one claim to the next, but he didn’t foresee the coincidence of our services being utilized by both insurance companies.

Powers of Deduction
If we were Detective Columbo when it came to Dr. X, then we were Sherlock Holmes when it came to the Lady Arizona incident. We had to do a little sleuthing and employ the process of elimination to assess the loss in this case.

A theft occurred at a lady’s home in Arizona. The stolen item was a painting, which the victim claimed was done by Rembrandt. She was looking for a $3 million insurance payment. Enter our company with the mission of determining whether or not she was entitled to it.

According to the woman’s account, the stolen Rembrandt had been rolled up in a tube beneath her bed. The depiction in the painting was a landscape. Fair enough. At the outset, we spoke to her two sons. One son was a lawyer; the other was a doctor. We had reason, therefore, to believe that they were both credible (Dr. X’s conduct notwithstanding). The sons surprised me by contradicting their mother’s claim. At the outer limits of their knowledge, they just had no way of verifying that the painting was by Rembrandt. They didn’t volunteer the opinion that it wasn’t, but they were certain that they couldn’t be sure.

As for the woman? She was certain.

Now we had a predicament. Here we had not only a claim involving a legendary artist, but a familial counter to that claim—from the claimant’s own children! Yet the woman was undaunted in her persistence. She knew it was a Rembrandt, and she wanted that $3 million.

Unlike Dr. X, Lady Arizona offered no documentation whatsoever about the painting. We were coasting on air and talk. No photographs. No post-loss appraisals. No proper provenance. So what did that leave us with? Well, dear Watson, the process of elimination.

A good detective should be able to assess what is absent as well as what is present. So we began to research all the landscapes Rembrandt had ever done. One might stop here and imagine that there were 1,000 such landscapes scattered all about the globe, but we were fortunate on this point. In his lifetime, Rembrandt had painted only seven landscapes.

Five of the seven were located in prominent museums. We communicated with the museums to ensure that those five had never been lost, stolen, or meddled with. They were fine, so that left only two. Common sense led me to believe that there was no way on earth that this woman could have attained one of Rembrandt’s seven existing landscapes, let alone one of the two which were not in museums. However, common sense is not the tool of the investigator.

All roads must stop at the facts. And in this case, as it turned out, the facts were as follows: The two remaining landscapes, wherever they were, were painted on panel, which means that they could not be rolled up in a tube. The facts had effectively dismantled this claimant’s story. Was Lady Arizona a fraudster? That we can never know. Maybe she believed she’d had a Rembrandt. Maybe the seller was the fraud. As Gene Charles, a Paris art dealer of renown, once said, “You can sell anything to the public at large. They know nothing about art. All you have to do is ask a fabulous price.”

Despite the overwhelming factual evidence, Lady Arizona did manage to ensure some modest compensation because even non-Rembrandt pieces from the lost work’s century are deemed to be of some value.

Missing the Mark
Less fortunate was another case subject, the antique merchant. He, you see, had lost an item called a silver cash pot. According to him, the cash pot was valued at $11,000. Why so much? “It was made by Tiffany,” said the merchant.

He was referring to Louis Comfort Tiffany, the merchandise of whom could indeed command a pretty penny. What gave us pause was that the merchant said that the item bore the initials “CLT.” CLT, of course, does not stand for Louis Comfort Tiffany. Sympathetic readers may posit that the antique dealer had made an honest mistake. Perhaps, or maybe whoever sold the pot to the dealer had been a fraudster.

All reasonable possibilities. However, we are compelled to counter that Tiffany is a giant in the dealer’s world. So had the dealer been good at his job, he would not have been duped so easily. Therefore, we were either dealing with a poor antique dealer or a sloppy fraudster. In either case, the claim could not be authenticated, and payment was not made.

In every art claim, there’s a need for investigative diligence. The high-value art world, as well as its fraudulent counterpart, is one of rapid transfer of property and often loosely documented authenticity. Accordingly, the art claims investigator is required to be a creature of minutiae—to look in the smallest cracks and corners, the places where others might never think to glance.
PJ Zadok is the director of Fine Arts Claims Consultants, Inc. and can reached at info@finearts.bz

About The Authors
PJ Zadok

PJ Zadok is the director of Fine Arts Claims Consultants, Inc.  info@finearts.bz

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CLM’s Insurance Fraud Committee identifies, analyzes, and offers education on emerging fraud schemes and tactics; monitors and reports on developments in case law, state fraud statutes and applicable regulations; collaborates with other anti-fraud industry organizations and associations; and seeks to provide amicus support in matters of importance in the fight against insurance fraud.

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