Online auctions: art fraud for the masses
March 31, 2006
Internet forgeries and flimflams
By
Marc Carrier
The work by American abstract painter Richard Diebenkorn attracted lots of attention. The bids opened at .30 cents and soon started soaring. The price reached four figures, then six figures, finally selling to a buyer in the Netherlands for $135,805.
The painting was a fake. And so were most of the bids. A U.S. court sentenced a man to almost four years in jail for this crime.
The ring leader and his accomplices posted bogus paintings on a prominent online auction site – the forged works of Alberto Giacometti, Maurice Utrillo, Edward Hopper, and others –, and boosted their profits using a swindle called shill bidding to drive up the prices. It’s an easy trick. One or more people register to an auction site under a variety of anonymous profiles and compete with real buyers by posting phoney bids. There is nothing new about this. It is a ploy that has been around since the earliest days of bricks and mortar auction houses. The Internet just makes it easier.
Too easy.
Auctions now reach far beyond the carpeted salons of Christie’s and Sotheby’s thanks to the Internet, resulting in a widespread democratization of art fraud. Anyone with a computer and a modem is vulnerable to online deceit. And the problem appears to be growing. According to the Internet Fraud Complaint Centre, a partnership between the FBI and the National White Collar Crime Centre, almost half of all reported crimes concern online auction sites. The latest available figures (2002) show 48, 252 total complaints of fraud for the U.S. alone — a three-fold increase on the previous reporting year –, for a median value of nearly $300 per complaint. Internet auction fraud makes up 46% of that figure, for a loss of over $20 million, while statistics on Canada‘s Recol Website (Reporting Economic Crime Online, a collaboration between the RCMP and National White Collar Crime Centre of Canada) show that 19% of all reported crimes concern Internet auction fraud.
NEXT WEEK: How is the online auction industry dealing with this problem?
MEANWHILE, IF YOU OR SOMEONE YOU KNOW HAVE FALLEN VICTIM TO ONLINE OR BRICKS-AND-MORTAR ART FRAUD, I WANT TO HEAR FROM YOU. TELL YOUR STORY IN TOTAL CONFIDENCE BY WRITING TO: carrierartappraisal@yahoo.ca
