A Federal judge has given Art Deco art dealer Arthur Kassel a 15-year sentence for committing wire fraud in his dealings with collectors in an illegal scheme to sell unauthorized art and turn a profit.
Prosecutors said Kassel, the son of Oscar Kassel, who sold the Liberty Bell to the Smithsonian, bilked collectors with bogus paintings and coins in sales that began in the early 2000s.
One of his victims was real estate developer Ira Pessin, whose company paid $1.4 million to buy 118 Monet paintings from Kassel, then assigned them to a company controlled by Kassel. But the paintings soon became worthless, prosecutors said.
In the end, Kassel pleaded guilty to the charges against him and agreed to forfeit up to $86 million.
They said Kassel kept the buyers in the dark about the extent of his deals and evaded tax authorities in Hong Kong by keeping most of the proceeds of his criminal activity in a bank account there.
Prosecutors said Kassel was only guilty of wire fraud because he used wire traffic to make his sales, not bribery or falsifying documents. Kassel is appealing his conviction.
The art dealer had already agreed to forfeit much of his collection to the United States, the Los Angeles Times reported.
And, as part of his plea deal, Kassel avoided jail time in a related charge of using forged documents to avoid paying taxes. He admitted he participated in a scheme to falsely pass off forged documents as authentic. He agreed to pay about $5 million in criminal penalties and forfeit about $24 million in restitution.
“His conduct was grossly insincere and unreasonable; both actions caused individuals to lose millions of dollars,” Joon Kim, the U.S. attorney for the Central District of California, said in a statement last week.
Federal investigators searched Kassel’s offices in February 2016 after the FBI’s San Francisco office received reports of fraudulent investment transactions involving collectors in the San Francisco Bay Area.
Kassel’s house was raided by agents of the IRS and California’s tax department in May 2016, according to court records.
Prosecutors said Kassel was involved in a scheme from 2012 to 2015 to defraud collectors around the world, claiming among other things that he would auction fake Monet paintings valued at $158 million.
A collector who bought 120 fake paintings from Kassel’s forgeries was described as very wealthy.
Most of the people who invested in Kassel’s fraud scheme did not learn of their losses until after they had paid him, prosecutors said.
Much of the money went to Kassel’s family and friends, including his brother, the founders of Kassel Fine Art and Special Assets, who raked in tens of millions of dollars.
Much of Kassel’s fraud began as a reaction to his brother’s death in the early 2000s. He began investigating the original owner of a collection, but found no evidence of fraud and continued to pitch his idea.
Robert Danford, a special agent with the IRS and a member of the art and antiques theft task force, called it a “ridiculous scheme.”