But where does the law draw the line between effective if a little sharp business practices and criminal activity? When does a replica become a forgery? And what are the consequences for someone who finds themselves in the firing line of a criminal investigation?
At Mary Monson Solicitors, we have a dedicated Art Fraud Team including experienced forgery lawyers who are specialists in the criminal defence of people accused in offences involving items of high value. Our team includes forgery lawyers with industry knowledge, one of our number even holding a History of Art Master's Degree alongside her legal qualifications. Our business law team also can act for clients who have been sold high value forgeries by dealers, where the item has been described as authentic.
Our recent experience with offences related to Art, Antiques and High Value Items includes:
Defending a former assistant to Turner Prize nominee Tracey Emin, accused of making and selling copies of her works
Advising a Russian art dealer in relation to claims of theft of ultra-rare antiquities and items of historical importance worth an estimated ‚¬20,000,000
Representing the manager of the flagship London branch of one of the world's largest diamond retailers in an investigation into the alleged theft of high value pieces of jewellery
Defending a man accused of running a business selling genuine first editions of novels by C.S. Lewis with forged signatures of the author
Advising a Hollywood contemporary art gallery regarding its legal obligations to report cash payments received in the UK
We have included a basic guide below to some of the common illegal practices involving high value items, and how the law works in these areas.
Art Forgery and Fake Antiques
Antiques and Art Fraud is really a collection of different illegal practices, some which are usually committed by people in the industry, and others by general criminals, who may not know the possible value of items they are dealing with.
Fakes, Forgeries and Misrepresentation
One of the simplest frauds involving high value items happens when sellers describe them as something more valuable than they are. An example might be an aged Japanese made Fender Stratocaster sold as an all original ‘58 USA made edition. The guitar is a genuine Fender, but rather than being worth £50,000, it may be worth no more than a thousand at best, and probably significantly less.
Other items may be outright forgeries. This is particularly prevalent with works of art by established artists and high end antiques from noted periods or particular design houses or workshops. A regency table circa 1820 may be in fact little more than firewood circa 1987, but still be offered as the real thing at £20,000.
Where an item is presented as something it is not and this is investigated by Trading Standards or the police, the defendant may be prosecuted for Fraud by False Representation (if it is a business transaction, or a transaction between two individuals), or under the Consumer Protection from Unfair Trading Regulations (otherwise known as the CPRs), if it is a transaction between a consumer and a business.
The CPRs have replaced the Trade Descriptions Act, and place a duty on someone dealing in business to behave fairly to consumers. This means that they cannot deceive the customer. This can include an omission to mention something that may influence the customer's decision. This means that not mentioning something about authenticity or condition which in the circumstances is relevant may be an offence, which could cover fake antiques irrespective of what was said.
The regulations are widely drafted so that a jury can use their judgment in deciding whether a person is guilty of breaching them. Where an item is a reproduction, and this is not stated, but displayed together with originals, and it is priced as if it were original, a jury might well decide that the defendant has deceived the customer in the circumstances by not pointing out that the item is not the real thing. Similarly, if a dealer was unaware that an item was not as described, he or she might be acquitted by a jury.
The maximum sentence for a Consumer Protection from Unfair Trading Regulations offence is 2 years in the Crown Court, although sentences of this length are rare.
Where the transaction is in a business context, Fraud by False Representation is the usual relevant offence the prosecution will use. Consumer offences can also technically be charged under this act. This has much higher sentencing powers (10 years imprisonment in the Crown Court), but is harder to prove.
Offences in a business context can also technically be charged under the Business Protection from Misleading Marketing Regulations, but only where the item has actually been advertised misleadingly. There is no emphasis on ‘unfairness' such as in the Consumer Regulations, making it harder to prove than for a consumer transaction. As a result, Fraud by False Representation is a more common offence in allegation of the sale of fake antiques or the passing off of an art forgery.
The elements of the fraud offence are:
A representation or statement must be made (usually but not always said or written)
It must be known to be false
It must be made dishonestly
It must be made to gain something, or cause someone else to suffer a loss
This of course means that the prosecution have to prove dishonesty in the deal, and there is no emphasis on ‘fairness'. This means that ‘buyer beware' may very well apply, and a dealer overcharges for a fake item (provided that item is not explicitly indicated to be original) may not face prosecution. Where a fake is of particularly good quality, dishonesty on the part of the seller may be difficult to prove, and a good forgery lawyer may focus on the absence of dishonesty as the central part of the case.
Where a group of people are involved in a plan to produce or sell forgeries or to misrepresent items as something more valuable, the charge may be ‘conspiracy to defraud'. This essentially means a plan to commit a fraud. For more information on this click the Conspiracy to Defraud section on the left hand toolbar.
Making Fake Antiques etc. Inc Possession of Articles for use in a fraud
The makers of forgeries of antiques, works of art, or archaeological antiquities are often charged along with the sellers (if the seller is a different person) for Conspiracy to Defraud, or as a party to a conspiracy (a plan) to commit fraud by false representation contrary to the Fraud Act. The prosecution may have a difficulty evidentially if the police have found copied items, but have no evidence that they were sold as originals. Making a replica or reproduction for one's own purposes is no crime, and the prosecution will usually want strong evidence of the con before pursuing the forger.
Theft and Handling Stolen Goods
Probably the simplest crime that can take place in respect of property is its theft. Of course, this can take place in many ways. The key components of theft, however, remain the same. The property must be dishonestly obtained, it must belong to someone else, and the thief's intention must be to ‘permanently deprive' the owner of it.
In cases of alleged theft, the state of mind of the defendant at the time may be very important. If the defendant genuinely believed that he or she had a right to the item, and that other people would agree if asked, then theft cannot be proved. If the defendant intended to give the item back later, that also is a defence to the charge.
A good forgery lawyer should also be able to look at the prosecution evidence critically in assessing whether theft took place. Where the theft is part of a sophisticated burglary operation, forensic evidence is often significant. The defence should take advice from its own forensic experts where the prosecution evidence is damaging. The circumstances of the theft should be looked at in detail. Where the defendant was an employee or otherwise known to the original owner, the circumstances of the relationship, including mutual expectations or responsibilities, and what was said around the time of the allegations should be looked at in detail. When a case is presented by the prosecution as black and white, showing the grey areas in the story to the jury can be a devastating defence tactic.
Handling Stolen Goods ‘Fencing'
The most common element that is effectively challenged in a charge for handling stolen goods is whether the defendant knew the goods were stolen. If the prosecution cannot prove that he or she did, then the jury have to return a ‘not guilty' verdict.
Factors which may affect whether the defendant is given the benefit of the doubt could include:
The circumstances of the purchase or transfer of the items (high value items sold for a small amount in the back of a pub may be viewed with suspicion when the jury consider the defendant's knowledge)
Whether the defendant can be closely linked to the thief or thieves
Whether the items are so rare as to be known by any expert in the market as stolen, and whether the defendant is such an expert
Whether the item was on the London Stolen Arts Database (LSAD), and whether a check was made by the defendant
Whether the defendant has previous convictions for theft related offences (or other dishonesty offences such as fraud)
Whether the defendant had hidden or disguised the item(s) in any way
Whether evidence of other stolen items is found by police (the coincidence adding to suspicion)
Auctions Shill Bidding
Auction related frauds are nearly as old as the idea of the auction itself, and one of the simplest forms of fraud is use of a ‘shill' or ‘plant'. These words describe a person who is working together with the seller and who bids in the auction's earlier stages to artificially inflate the price, or wins the auction on purpose to stop the sale going through at too cheap a price. These offences are targeted increasingly by the authorities and nationally reported cases in recent years have resulted in prison sentences. The need to instruct a specialist in the field is clear.
The prosecution will not only have to show a link between the seller and the alleged ‘plant'. The jury has to be sure that there was an arrangement between them.
In online auctions, sometimes the shill and the seller are one and the same person. eBay has been known to use software to detect matching IP addresses, and check registered bank details for different accounts. Most computer related transactions and computer traffic are easily traceable once the police are involved. If the shill bidding is better planned and less easy to associate with the seller's accounts and computer hardware, telephone traffic between the seller and the shill may be useful to the prosecution. Analysing telephone related evidence, however, can be expensive for police, and unless the auctioned items are of substantial value, this may not be done.
Generally, if the prosecution can show that there is a link between an online seller and alleged shill bidder, unless a very good explanation can be given, a conviction is likely. If that is the case, the sentence will depend on a number of factors, including how sophisticated the operation is, the amount of loss incurred to other people.
Shill bidding offences can be charged either under the Business Protection from Misleading Marketing Regulations (where the genuine purchaser is a business) or the Consumer Protections from Unfair Trading Regulations (the CPRs where the genuine purchaser is a consumer). The maximum sentence for these offences is 2 years imprisonment. Where the allegations appear to be part of a larger or more serious planned operation with a number of people involved, the offences may be charged as ‘conspiracy to defraud'. For more information on this click Conspiracy to Defraud on the left hand toolbar.
Auctions Bidding Rings
This is an illegal industry practice which occurs mainly in conventional auctions, rather than on eBay. Dealers agree not to bid on a particular item or items at an auction, but send one of their number to attend and win the item. The dealers do not bid against each other in the real auction, therefore colectively paying a lower sale price. They may hold another, private auction in order to decide who gets the item, although in some cases the ring allows each member in rotation to have the item at the sale price (this is also called bid rotation).
Bidding rings are especially prevalent in specialist markets where the dealer community is small, making the possibility of effectively distorting the price is higher.
There are several laws under which bidding rings are illegal. Most often, prosecutions are brought under the Auction (Bidding Agreements) Acts. The offence involves giving or accepting an inducement for not attending an auction. Genuine joint acquisition agreements are exempt, although the usual rules on having to disclose the arrangement apply. Bidding rings can also be charged under Conspiracy to Defraud (for more information on this click on the button on the left hand toolbar.
Evidence which may be relevant in auction related investigations may include: witness testimony (including that of auction house staff), conspicuous absence of key dealers in a field, and evidence of unexplained telephone and financial links between suspects.
Money Laundering in the Sale of Art Forgery and Fake Antiques
Money laundering allegations often accompany art theft and handling cases. The purchase of art and high value objects can also be a very effective way of converting illegal assets, which of course can still be money laundering, albeit in a different form. For more detailed information on money laundering, click Money Laundering on the left hand toolbar.
Investigations and prosecutions for frauds related to the sale or handling of an art forgery, or of fake antiques and archaeological artefacts can last a long time. Specialist industry knowledge is often required to fight these cases effectively. We always recommend getting in touch with an expert forgery lawyer in this area.