[MSN] Calif. couple left trail of lies, disappointments in art world

[Museum Security Network Mailinglist]

Calif. couple left trail of lies, disappointments in art world
KIM CURTIS
Associated Press
SAN FRANCISCO - Kevin Anderson had two pricey French paintings to sell and
it was July, a slow time in the art world. So when San Francisco art dealers
Thomas and Nancy Wandlass said they had a buyer in mind, Anderson sent them
the artwork on consignment with the understanding they would pay him
$300,000 or return the paintings.

Neither happened - until Anderson got the police involved.

A full year after the Beverly Hills gallery owner entrusted the works by
Gustave Loiseau and Louis Valtat to the couple and his efforts to get them
back went unheeded, police seized the captive canvases and investigated the
Wandlasses pasts as fine art brokers. It turned out they had been accused of
hanging onto paintings that didn't belong to them several times in the past.

"It could be they were intending ultimately to sell these paintings and
either shortchange the true owner or take the commission," said Bob Ring, a
San Francisco prosecutor who's charged the couple with felony grand theft,
fraud and conspiracy. "They are taking people's property as a trustee on
consignment and refusing to return them. It's tantamount to theft."

While the Wandlasses pleaded not guilty to the charges on Friday, the case
offers a window into a rarefied world where business deals worth hundreds of
thousands of dollars are built on appearances, word of mouth and who knows
whom. It's a society astonishingly short on paperwork and long on the power
of a handshake.

"Art transactions have a tendency to be very secret, and people who have
been defrauded don't want anyone to know," said Los Angeles Police Detective
Don Hrycyk, who has investigated art heists for a dozen years. "They pride
themselves on being excellent judges of character and when they're proved
wrong, they have egg on their face."

Like Kevin Anderson, San Francisco gallery owner Pasquale Iannetti says he
learned the hard way he misplaced his trust when he asked the Wandlasses to
sell a $300,000 Franz Kline painting for him on consignment in 2002. When
the painting hadn't sold after several months, Iannetti says his client
asked for it back and "that's when the excuses started to happen." He said
they would ask for another week, then two, each time saying they were
nearing a deal.

More time had passed when a colleague noticed the painting being offered at
auction, according to Iannetti. Nancy Wandlass, who later pleaded guilty to
misdemeanor charges including unlawful delivery of goods, had accepted a
$40,000 advance from the auctioneer, according to court documents and her
lawyer. She eventually reimbursed Iannetti $35,000 for his legal fees.

But Iannetti said he had lost something more valuable - the trust of his
best client, which could never be replaced.

"We still talk, but they're not buying art," he said. "At least not from
me."

Selling art on consignment is common throughout the world. Because the
market requires both knowledge and the finesse to work with a small pool of
potential buyers, dealers rely heavily on each other to get pieces out of
their galleries and into people's homes or offices.

While the price tags on the merchandise may be higher, the process works
similarly as for other types of goods sold on consignment.

When dealers, acting as middlemen or brokers, find a potential buyer, they
contact the owner or a fellow dealer and ask to examine the piece. A
consignment agreement is often drawn up, noting the selling price, the
consignment period and other details. Brokers receive no set percentage -
their proceeds vary according to the selling price of the work - and the
agreements usually specify a time in which the piece must be sold or
returned.

Anderson and Nancy Wandlass signed a seven-day consignment agreement on July
19, 2005. She refused an interview, but her lawyer, Joe Morehead, said
Anderson repeatedly extended the consignment period and there was no reason
for police to get involved.

But Anderson alleges he repeatedly demanded to have them returned as it
became clear the Wandlasses did not have a buyer. Eight months later after
receiving the paintings, Thomas Wandlass sent Anderson a receipt showing he
shipped two crates, presumably his paintings, to a storage facility in South
San Francisco.

In response, Anderson called the receipt meaningless and threatened: "If I
do not have a cashier's check for $300,000 by Friday, March 31, I am
reporting the paintings stolen to the proper authorities. Good luck in
prison."

In July, Anderson flew up to San Francisco to report the theft in person.
Within days, police Inspector Gregory Ovanessian found the paintings in a
warehouse, retrieved them with a search warrant and returned them to
Anderson's gallery in Beverly Hills.

"Everyone knew they were crooks, but, somehow, it never got out to the right
people," Anderson said.

The accusations against the Wandlasses aren't new in the art world.

In 1998, New York City art dealer James J. Holmes was accused of keeping the
proceeds from the sale of others' artwork. He pleaded guilty the following
year and was sentenced to nearly four years in prison and ordered to pay
$400,000 in restitution.

San Francisco art broker Nancy Chaffin was charged in 1997 with swindling
investors out of hundreds of thousands of dollars in phony art deals where
buyers would pay for art or antiques Chaffin was supposedly buying for them,
but never did. She pleaded guilty in 2000 to grand theft and was sentenced
to a year in prison and 10 years probation.

Allegations of wrongdoing by the Wandlasses, who have since declared
bankruptcy, go back to the late 1980s, according to Ovanessian. Nonetheless,
they were an attractive couple - well-spoken and well-heeled - who somehow
managed to inspire confidence among their colleagues.

Stuart Denenberg is another art dealer who alleges the Wandlasses cost him a
good client and sullied his reputation. Denenberg said he gave them a
$100,000 bronze sculpture by Rodin to sell in April 2004, extended the
consignment agreement twice and then got stalled for another six months by
"one fancy story after another.

"It was just spectacular how they would lead you on," Denenberg said.

Last week, Nancy Wandlass' lawyer said she couldn't sell the Rodin sculpture
because it had been taken illegally from a grave; Denenberg disagreed,
saying the sculpture's authenticity was repeatedly verified.

Denenberg eventually got the piece back, but says the art world needs not
only a better system of tracking ownership, but law enforcement officials
who can recognize when a crime occurs.

"It is a very unregulated industry where charm and good looks and the
appearance of money amasses a great deal of fraud," he said. "You have to
have people interested at the level of enforcement. Otherwise, they think
these are just fancy people with nice things."

Hrycyk, the Los Angeles art crimes detective, agreed. Cultural crime is
rampant, he said. It's the world's third-largest crime problem behind drugs
and weapons dealing, according to the FBI and Interpol.

"These people can operate for years and cause an immense amount of damage
because it's like a pyramid scheme," he said. "They'll defraud people and
they will only cough up the money or the property if someone really puts
pressure on them."

http://www.montereyherald.com/