Art Forgery - Legal Issues

Legal Issues

In the United States, criminal prosecutions of art forgers are possible under federal, state and/or local laws.

For example, federal prosecutions have been successful using generalized criminal statutes, including the Racketeer Influenced and Corrupt Organizations Act ("RICO"). A successful RICO charge was brought against a family which had sold counterfeit prints purportedly by Chagall, Miro, and Dali. The defendants were also found guilty of other federal crimes including conspiracy to defraud, money laundering, and postal fraud. Federal prosecutors are also able to prosecute forgers using the federal wire fraud or mail fraud statutes where the defendants used such communications.

However, federal criminal prosecutions against art forgers are seldom brought due in part to high evidentiary burdens and competing law enforcement priorities. For example internet art frauds now appear in the federal courts' rulings that one may study in the PACER court records. Some frauds are done on the internet on a popular auction websites. Traces are readily available to see the full extent of the frauds from a forensic standpoint or even basic due diligence of professionals who may research matters including sources of PACER / enforcing authority records and on the internet.

Prosecution is also possible under state criminal laws, such as prohibitions against criminal fraud, or against the simulation of personal signatures. However, in order to trigger criminal liability under states’ laws, the government must prove that the defendant had intent to defraud. The evidentiary burden, as in all criminal prosecutions, is high.

Art forgery may also be subject to civil sanctions. The Federal Trade Commission, for example, has used the FTC Act to combat an array of unfair trade practices in the art market. An FTC Act case was successfully brought against a purveyor of fake Dali prints in FTC v. Magui Publishers, Inc., who was permanently enjoined from fraudulent activity and ordered to restore their illegal profits. In that case, the defendant had collected millions of dollars from his sale of forged prints.

At the state level, art forgery may constitute a species of fraud, material misrepresentation, or breach of contract. The Uniform Commercial Code provides contractually-based relief to duped buyers based on warranties of authenticity. The predominant civil theory to address art forgery remains civil fraud. When substantiating a civil fraud claim, the plaintiff is generally required to prove that the defendant falsely represented a material fact, that this representation was made with intent to deceive, that the plaintiff reasonably relied on the representation, and the representation resulted in damages to the plaintiff.

Some legal experts have recommended strengthening existing intellectual property laws to address the growing problem of art forgeries proliferating in the mass market. They argue that the existing legal regime is ineffective in combating this growing trend.