Ever since humanity has created and sold artistic works or items of aesthetic beauty, there have been art forgers looking to relieve unsuspecting individuals of their hard-earned money. Over the centuries, purveyors of art have maintained a continuous struggle against art forgery, developing ever more sophisticated forensic tools to spot forgeries while, at the same time, the forgers find new ways to circumvent them. Finally, after years of research and development, the Global Center for Innovation (GCI) at the State University of New York at Albany in conjunction with the ARIS Title Insurance Company are bringing to market the i2M system, which authenticates works using synthetic DNA that forgers cannot fool.
Why Has Art Forgery become so endemic to the Fine Art Market?
To appreciate the value of i2M, we first need to understand the methods art forgers employ and why are dealers and those tasked with authenticating art are losing the battle. On the one hand, art forgery can be viewed purely through an economic lens. The value of fine art makes forgeries incredibly lucrative. The current market is great for forgers given the high value being placed on art. Both prices and demand for fine art have increased dramatically in recent years because art, like Real Estate, is seen as an investment opportunity that generates higher returns than traditional financial investment and also acts as a hedge against the volatile financial markets. Plus, after the 2007 market meltdown, many investors have lost faith in the traditional markets as well as real estate that was the darling of the investment world before the crash. The global art market last year broke all records generating over $57 billion in fine art purchases including a significant increase in the most expensive fine art, according to the European Fine Art Foundation. This past week, Christie’s sold 19 Modern and Impressionist world for $342 million. The week prior, Sotheby’s sold $576m in Impressionist and Modern art adding to a stellar year for the auction house, which has sold over 1.7 billion worth of art, so far this year. With those kinds of numbers, it is easy to see why art forgers see opportunity.
Art forgery economics is no different than any economic product analysis. When a company looks to develop a new product or service, it must analyze the potential sales against the resources and costs required to bring the product to market. The same hold true for art forgeries. Costs can be viewed in terms of time required to create and distribute forgeries, bringing on the talent and expertise required to fool authenticators, and the likelihood of being caught. Time and talent are highly commensurate with the types for works being created. The more complex the work, the great the talent required to fool the authenticators. It is a lot more difficult to fake a Singer Sargent than it is to put a Chagall pen and ink on eBay. Also, the risk of being caught and prosecuted is fairly low. The infrastructure and resources necessary for law enforcement to tackle forgeries is far below what is needed, resulting in a fairly low risk of incarceration. Plus, the vast majority of artworks sold around the world are not vetted as the costs of authentication outweigh the costs of the work. For example, Christie’s is auctioning a 12” x 16” signed Dali Lithograph for an estimated $3,241 – $5,401, hardly a value that is worth paying to authenticate. Although an organization like Christie’s has likely vetted the work, even if the work is a forgery, being sold at such a prestigious auction house legitimizes the work making it real. Nobody will dispute the authenticity for a $3-$5,000 work.
The other side of the equation is the potential revenue. The Dali has little risk and perhaps little investment in time and expertise as well, but the return is small. However, for the larger more prominent works, such as a large Warhol or Kandinsky, creating a forgery that can fool authenticators could be costly. Of course, the return on investment is extremely high. If the potential return is worth the risk, then someone will invest in the art forgery and bring the product to market.
However, with the higher priced works come greater risks, and they are more likely to be put under scrutiny. Still, many works, especially those being sold through private channels, are never investigated. Even finding an outside expert can be difficult since specialists often own works by a particular artist and worry that authenticating works by the same artist could decrease the value of their holdings. Plus, there has been a move away from providing authentication services due to the potential legal issues that come along with authenticating work. Institutions that mistakenly authenticate forgeries may find themselves embroiled in a bitter lawsuit because once they take on the responsibility of authentication, then they also become legally responsible for the quality of their outcome.
The Andy Warhol Art Authentication Board was sued around ten times during its 15 years in operation. In each instance, the Authentication Board ruled works as not being genuine, which fostered lawsuits by the disgruntled owners. According to Joel Wachs, the president of the Andy Warhol Foundation speaking to the Observer, “We won every single one of those lawsuits, but the process was extraordinarily expensive, costing us at least $10 million defending ourselves,” he said. “Eventually, we decided that we wanted our money to go to artists and not to lawyers,” which led the foundation to disband the authentication board in 2012. (See Appraising The Old Masters – The $15 Million Caravaggio Disagreement for more on the authentication controversies).
The flurry of lawsuits over authentication practices must have an effect on the forgery market. When hundreds of thousands or millions of dollars are involved, lawsuits are likely. Unless authenticators have a clear defensible position, many are likely to let works that they are unsure about through. Some may not have the resources to defend themselves and others may not have the ethical standards one might expect.
Despite the seemingly favorable market, the high ROI and low risk, selling forgeries still need to set out with the intention of fooling authenticators as they don’t necessarily know where their works will end up. Authentication usually involves detailed searches for physical evidence through signature analysis, scientific testing, X-rays and infrared scanning. These forensic methods establish the age of the items being appraised and what materials and tools were used to make it. Forgers often have the same expertise as authenticators or art appraisers and use that knowledge to fool them. For example, authentication sometimes includes a chemical analysis of the materials used, such as paint or the canvas. Forgers will buy worthless paintings from the period and the geographic area of their forged work. They will scrape the oil from the canvas so that they can reuse it for their new work. Any analysis of the canvas will show the right date and type of canvas that the artist would have used. Old frames will be used to provide authenticity. None for the test are foolproof, each having their unique limitations so provenance and scholarly opinion become the most valuable resources, although they can also be fooled.
Provenance is the chronology of the ownership, custody or location of a historical object. Receipts help appraisers follow the collectible’s “paper trail,” hopefully leading to the original owner or creator. If the work can be traced back through a line of ownership and custody from the current owner back to the artist, then it is almost a guarantee of authenticity. Unfortunately, the art industry is rarely so transparent. Many private sales are done in secret, with buyers wishing to remain anonymous. With galleries as middlemen, even the seller’s name often isn’t disclosed to the buyer as sellers have the right to remain anonymous. Gregory Day, author of “Explaining the Art Market’s Thefts, Frauds and Forgeries (and Why the Art Market Does Not Seem to Care),” opines that “the norms of the art world instruct dealers and buyers to refrain from questioning a work’s origin and transactional history.” That practice can only help forgers.
In 2011, the art industry’s lack of transparency became a topic of conversation throughout the art world when it was discovered that Knoedler & Company, one of New York’s oldest and most prestigious galleries, sold $60 million worth of fake Abstract Expressionist paintings. Knoedler acted as the middleman between several buyers and a seller. The buyers handed over millions of dollars without any information about the seller, assuming that a prestigious gallery like Knoedler would have done its due diligence. In fact, the gallery didn’t even have any information about the seller, knowing him only as Mr. X, who turned out to be a Long Island art dealer, Glafira Rosales. She pleaded guilty to tax evasion, wire fraud, and money laundering in 2013. Last August, Knoedler & Company “quietly” settled three outstanding lawsuits surrounding the incident, according to a report in The Art Newspaper.
About half of all major art, sales take place in private deals like this one, where dealers are allowed to represent both the sellers and buyers without disclosing this conflicting interest to either party. Each side believes the dealer is working in their best interest to get the best price and ensure the work is authentic when in reality, the only side the dealer is on is his or her own. In such a situation, the dealer would have little interest in authenticity or looking into whether it had been stolen in the past.
Despite the Knoedler case, working with a reputable gallery tends to be the best approach to ensure a work is authentic. Most galleries won’t sully their reputation as it has too much value in an industry fraught with fake art. Top galleries will generally do their homework since it only takes one bad situation to ruin their reputation. Without a knowledgeable person who knows the tricks forgers use, buyers are at risk.
A series of private buyers in 2010 were scammed out of millions, having been fooled by expert forger Wolfgang Beltracchi whose exploits became the subject of the 2014 film, The Art of Forgery. Beltracchi admitted to forging hundreds of works by at least fifty of the greatest 20th-century masters like Max Ernst and Fernand Léger. As part of his scam, Beltracchi told buyers that the artwork for sale had been part of his wife’s grandparents art collection. To trick potential buyers into accepting his provenance, Beltracchi photographed scenes of his wife posing in front of the various paintings, dressed in period clothing, pretending to be her grandmother. In 2011, Beltracchi was convicted of corruption and forgery related to 14 of the works, which he had sold for a combined $45m. The majority of his forgeries remain in the art market, with many owners still believing them to be genuine.
While the Kneeler and Beltracci cases might seem like big wins, the vast majority of forgeries are never discovered. The current industry norms as wells as the legal regime don’t favor monitoring the art market. Adequate information doesn’t exist on many of these old works. Forgeries are sold over and over again without anyone being the wiser. Undisclosed ownership and poor record-keeping, along with the fact that nearly half of Europe’s art was stolen during WWII, makes the lack of provenance acceptable. As a result, many in the art industry have been clamoring for an international, cross-industry approach that could help fight the forgers. So when the GCI announced the development and funding of the i2M initiative, the art industry collectively perked up in skeptical anticipation.
I2M Synthetic DNA Markers
The i2M initiative is being touted as “the first of its kind to establish industry standards by which all art will be invisibly and permanently marked.” Marking can be implemented at the time the art is created, allowing it to be recognized as indisputably authentic. For secondary art not previously marked, those works can still be be tagged but first requires authentication by a consensus of experts. Think of it like a car’s vehicle identification number (VIN), but for artists.
The i2M approach would implant a small, high security label containing synthetic DNA that introduces molecular markers directly into an artwork. Then DNA would penetrate the work at the molecular level, so the DNA would remain fixed into the artwork even if the DNA label is removed. The bioengineered DNA would be “unique to each item and provide an encrypted link between to the DNA database, which holds the consensus of authoritative information about the work.” The synthetic DNA would not be the personal DNA of the artists, because of privacy issues and because a person’s DNA could conceivably be stolen and embedded, thus undermining the authority of such a marking protocol.
Artists and owners would need to purchase a “tag” (estimated to cost around $150) that could be used in applying the DNA. The tags will have no impact on the artwork, an important criterion to ensure artists will adopt the approach. The marker will be very hard to locate and not be prone to environmental issues or tampering. Deciphering and replicating the DNA would be all but impossible as even sophisticated counterfeiters would leave behind microscopic forensic evidence if they attempted to remove or replace the DNA.
To check whether a work is authentic, an iPhone or Android app would scan the label and show the user the verified data. If the label is missing, a scientific team will swab the work to find the DNA traces left by the label. If works are stolen, they could be reported to GCI which would then make the required entry into the database. Anyone scanning the painting, as well as the owner, would be notified that the stolen work had been found. Any work marked as stolen could be blocked from resale by galleries and auctioneers, as well as helping return th work to its rightful owner.
The initiative’s development is collaborative with multiple organizations providing legal and scientific experts in many technical disciplines, along with creators and other members of the art industry. I2M is not just an app but designed to be an ecosystem; one that increases its effectiveness along with the size of its user base. The more artwork that is marked at its creation, the more people will expect find works being tagged, and the more potential buyers will look for the DNA label before buying art.
I2m has three components to its ecosystem. Component 1 is an international standard defining the technical and legal requirements that make a solution “unbreakable.” Component 2 is the DNA marking technology that follows the standards set out in Component 1. Component 3 is information technology (provided by ARIS) that enables continuous verification and protection of information associated with identified art while complying with the strictest data privacy, protection and security laws around the globe.
If i2M gains adoptions, it could be a serious tool in the fight against forgeries. According to the Art Newspaper, two dozen artists, archives and museums have already signed up to the initiative, including the US-based Philip Halsam archives and the Brüke Museum in Berlin. The first round of works are due to be treated in the next few weeks. For more on i2m, go to their website, or watch the video at the top of the page
What do you think of the i2M initiative. Let us know in the comments section below.
As a photographer and Patent Attorney with a background in marketing, Steve has a unique perspective on art, law, and business. He is currently serving as the Chief Product Officer at Artrepreneur. You can find his photography at artrepreneur.com or through Fremin Gallery in NYC.