“Prosecutors Expect More Arrests in Art-Fraud Scheme”

The New York Times on August 19, 2013 released the following:


“Federal prosecutors handling the case against an obscure art dealer charged in one of the most audacious art frauds in recent memory told a judge on Monday that they expected more arrests in the continuing investigation. They also said they expected the case against the art dealer to be resolved soon.

The disclosures came at the arraignment of the dealer, Glafira Rosales, in United States District Court in Manhattan.

Ms. Rosales was arrested on money laundering and tax charges in connection with the scheme in May. She was arraigned Monday before Judge Katherine P. Failla on new charges contained in a superseding indictment that was handed up last week by a grand jury. She pleaded not guilty during the five-minute proceeding.

During the arraignment, Judge Failla asked one of the prosecutors, Jason P. Hernandez, an assistant United States attorney, if more arrests were expected.

“Yes,” he said.

Mr. Hernandez also said that the case against Ms. Rosales, which was the result of a lengthy F.B.I. investigation, was to be resolved in the coming weeks. He did not elaborate.

A lawyer for Ms. Rosales, Steven R. Kartagener, declined to comment on the new charges.

The charges issued last week revealed for the first time that all of the 63 phony art works at the heart of what prosecutors have described as a sweeping fraud scheme stretching over more than a decade were created by a single painter. The indictment identified him only as a painter who lives in Queens and said he had produced the canvases — purported to be by the hands of Modernist masters like Willem de Koonig, Jackson Pollock, Mark Rothko, Robert Motherwell and others — in his house and garage.

People briefed on the matter said he was Pei-Shen Qian, a struggling 73-year-old Chinese artist who came to the United States in 1981.

While he was paid a few thousand dollars for the canvases, they were later sold as works by Modernist masters for more than $80 million.

The indictment and other court papers said the painter who created the fake canvases was discovered selling his own art on the streets of Lower Manhattan in the early 1990s by Ms. Rosales’s boyfriend and business partner, an art dealer named Jose Carlos Bergantiños Diaz, who recruited him to make paintings in the style of celebrated Abstract Expressionists. The indictment does not name Mr. Bergantiños Diaz, but his identity is confirmed by other court records.

It is unclear whether Ms. Rosales has begun cooperating with the federal authorities since her arrest in May. But while the prosecutors handling her case initially argued then that she posed “a substantial flight risk” and that no bail conditions could assure her return to court, convincing a judge to detain her without bail, last week, after the new indictment was handed up, the prosecutors did not oppose her release on a $2.5 million bond.

Julie Bolcer, a spokeswoman for the office of Preet Bharara, the United States attorney in Manhattan, and an F.B.I. spokesman, James M. Margolin, declined to comment. Mr. Kartagener has refused to characterize his discussions with the prosecutors on the case, Mr. Hernandez and Daniel W. Levy.”


Douglas McNabb – McNabb Associates, P.C.’s
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