Art Dealer Who Conned Galleries Out of $80 Million Busted

An art dealer who reportedly conned New York galleries out of millions of dollars was arrested this weekend.

Spanish businessman José Carlos Bergantinos Diaz is accused of defrauding galleries out of millions of dollars in fake art sales. According to prosecutors in the case, several galleries sold the forgeries (reportedly created by an artist in Queens) for upwards of $80 million. Via the New York Post:

Diaz was arrested Friday at a hotel in Seville after allegedly peddling phony art for 15 years — claiming the pieces were undiscovered works by modern masters such as Jackson Pollock and Willem de Kooning. Glafira Rosales, Diaz’s partner, was arrested in New York in August 2013 and accused of hocking the fake art. The federal indictment charged her with several offenses, saying she had charged two Manhattan art galleries more than $30 million for 63 pieces of fake art.

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Around 50 of the pieces the duo peddled were claimed to have been the property of a person of Eastern European ancestry who wished to remain anonymous, the indictment said.

According to The New York Times, Diaz and his associates defrauded one of New York’s most well known galleries.

The swindle, officials have said, was carried out with Mr. Bergantiños’s girlfriend, Glafira Rosales, who was charged last May and pleaded guilty in September in the scheme. She has been cooperating with the federal authorities. The marketing of the fake paintings, many of which were sold through the offices of what was once New York’s oldest gallery, Knoedler & Company, has been among the most stunning art market scandals of the last decade.

In addition to the criminal case, the swindle has led to a dozen civil lawsuits, in which some of those who bought the paintings have sought to recoup losses.One element of the scheme that has riveted the art world is the source of thefraud: a single immigrant from China who painted out of his home and garage in Woodhaven, Queens, and produced the scores of paintings and drawings that were successfully presented as newly discovered works by some of the 20th century’s greatest artists.

The painter, Pei-Shen Qian, received formal training at an art school in New York. Federal authorities, who identified Mr. Bergantiños as Co-Conspirator No. 1 in the indictment charging Ms. Rosales, said he met and befriended Mr. Qian in the 1980s, while the artist was painting on the street in Manhattan. The F.B.I. has been seeking Mr. Qian, who federal officials have said created the fake masterworks at his house in Queens, since last year, when he was believed to have fled to China. He is also expected to be charged.

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Diaz, who is wanted in the U.S. for fraud, will face a judge next week who will determine the next steps in his extradition case.

It was not immediately clear whether the United States will seek his extradition as well, but some $33 million netted from the scheme was transferred to bank accounts in his name in Spain.

The Spanish Interior Ministry official said that [Diaz], who had an anxiety attack after his arrest and was briefly hospitalized, was being held by the police in Seville. But he is likely to be transferred to Madrid in the coming days, the official said.