The late publisher Malcolm Forbes was one of the great collectors in American history. His was an eclectic taste: he amassed toy soldiers, autographs, and, most famously, Fabergé eggs, for which he had a fascination that began in his youth. He also collected historic documents, purchasing the expense account that Paul Revere submitted after alerting the townspeople of the coming of the “Regulars,” as well as a note handwritten by Abraham Lincoln. While Forbes was also a collector of art and favored military depictions while eschewing abstract art, perhaps the art he loved most was the art of collecting. “If anyone should seek my advice about collecting,” he said, “I’d quickly point out the old truth—buy only what you like. Measure a work by the joy and satisfaction it will bring.”1
After Forbes’s death, most of his collection was sold over time, and little today remains of what he so passionately collected. Even his treasured Fabergé eggs would eventually be auctioned off, along with his paintings. While his art collection was certainly valuable, it did not rival that of other families known for their wealth. “My interest is not that of an academic collector,” Forbes said. “I didn’t grow up exposed to old masters. My father didn’t found the Mellon museum.” Instead, his artistic tastes veered toward trompe l’oeil, or “trick the eye” works—artistry so meticulously detailed that it made the two-dimensional appear three-dimensional.2
Forbes, then, would likely have appreciated the work of the Los Angeles–area artist Maria Apelo Cruz, a trompe l’oeil artist whose ability to create classic reproductions has garnered her elite clients from LA and Beverly Hills who are looking to restore intricate works of art on items ranging from antique furniture to large murals. Elements of Living magazine reported in 2005 that Cruz, classically trained as a painter, kept herself busy by copying the styles of long-dead painters. “I love to recreate what I find most beautiful. Luckily for me enough people have a need for my particular skill.”3
One such person was Tatiana Khan, the owner of the Los Angeles art gallery Chateau Allegré. The then 65-year-old Khan had spent over four decades in the business of buying and selling art and approached the talented artist with a commission. She showed Cruz a photograph of a pastel drawing by Pablo Picasso and offered her $1,000 to make an exact replica of the work. The drawing was needed for a noble cause, explained Khan, whose appearance was that of a much older woman. A client of hers had owned the original, she said, until it was stolen from the client’s home along with some jewelry. In order to catch the thief, the police needed an exact copy to use as a prop, so Khan was willing to provide the artist the exact dimensions of the original. Understanding that she’d be helping the authorities to recover a work by a true master, Cruz accepted the job and went to work duplicating the work.4
As a first step, Cruz took the photo Khan provided her to a copy store in Van Nuys and enlarged the image in the photo to the size prescribed by the art dealer (30.5 × 23 cm). Then, back in her Sherman Oaks studio, she merely traced the image in the photo onto paper and used pastels to add the appropriate color. The original work consisted of varying shades of blue with touches of yellow, gray, and rouge, and it took Cruz only two weeks to copy. When she was done, Cruz had a dilemma: as an ethical artist, her practice upon completion of a copy of such a work would be to sign it with her own name followed by “after” and the artist’s name, in this case “after Picasso.” But since it was her belief that the piece was to be used as a prop in a ruse conducted by the police, she contacted Khan and sought her guidance. Cruz was told to sign Picasso’s name only, and she did as she was instructed.
There was no reason that Cruz should not trust Khan. The two had a preexisting positive relationship, and Khan had her admirers in the community. A professional associate spoke of her practice of putting concern for her clients over any desire for a “quick sale.” Members of her family spoke of her big-hearted nature, calling her “the family angel” who provided an unemployed sister living out of state with large sums of money for her cancer treatment. Even former Nevada attorney general George Chanos attested to her character, describing Khan’s actions as a businesswoman as “evidencing a caring and compassionate soul, someone who cared more about doing the right thing than making a sale.”5
Perhaps it was this reputation that led buyers to Tatiana Khan. One buyer from Beverly Hills had been purchasing “collectibles and other decorative items” from Khan for years. Most of these items were those that Khan told the buyer she was selling from Malcolm Forbes’s collection. This was nothing new, according to Khan, who said that most of the items she had for sale were obtained from a London dealer involved in moving Forbes’s collection. Another customer bought four items from Khan for about $4,000, all of which were let go at a great deal in order to clear space in Chateau Allegré for the entire Forbes collection, which Khan said she had purchased. Clearly, Khan’s connection to the collectibles from Malcolm Forbes’s estate was a key selling point for her business.
It was this sort of cachet that led Jack K. to bring his business associate, Vic S., to Khan’s gallery on La Cienega Boulevard in Los Angeles in July 2006.6 Vic, who had been making investments with Jack for around a decade, was in the market for Impressionist paintings, and since some of his investments with Jack had included art purchases through Chateau Allegré, he met with Khan in person to discuss the sort of items he was seeking. Khan told the investors she might be able to accommodate their needs since she was in possession of artwork from the Forbes estates for sale. Because of a conflict within their family, Khan explained, the Forbeses were desirous of handling the sale of their works privately. As a result, the works from the Forbes Collection were available below market value. As proof of her connection to the Forbes family, Khan opened a book in her shop and showed Vic the signature of Malcolm Forbes inside. It was a strong sales pitch by an experienced dealer.
Aware that there was money to be made selling Impressionist works to the pair, Khan began to seek some high-value pieces and contacted Frederick Hudson of Frederick Hudson Fine Art in New York City. Hudson is a reputable art broker capable of connecting buyers and sellers of art, and Khan was seeking to be connected to people looking to sell Impressionist works that she could then sell to Jack and Vic. Hudson went to work reaching out to his contacts to get photos of art that met the needs of the two investors. He sent what he had to Khan.
Included in the pile of photos that Hudson delivered to Khan was a painting by the esteemed Jewish Modernist Marc Chagall titled Le Bouquet Sur le Toit, an untitled work by the Dutch American master Willem de Kooning, and a drawing by Picasso called La Femme au Chapeau Bleu (The Woman in the Blue Hat). Of the three, Hudson was only able to provide certificates of authenticity for the Chagall and de Kooning. She took special notice of these as good prospects for her client-investors, and asked Hudson to seek the certificate of authenticity for the Picasso.
The asking price from the private European owner of La Femme au Chapeau Bleu was $1.35 million, but the absence of provenance was a sticking point for Khan. Hudson contacted his counterpart who represented the Picasso’s owner but was unable to obtain an authenticating document. Though Khan said she had a buyer lined up for the Picasso, she and Hudson spoke no further about the drawing. Khan came up with a solution of her own: she visited her trompe l’oeil artist, Maria Apelo Cruz, with her story about the theft and the need for the pastel drawing for a police operation.
Weeks later, Khan called Hudson with “something to tell him that he wouldn’t believe.”7 Incredibly, she said that during a visit to a client’s home she saw the exact Picasso pastel about which she had previously inquired, and she intended to get it to show to him. Soon thereafter, Khan again called Hudson, this time inviting him to come to Chateau Allegré to see the Picasso. When he arrived, he saw that Khan had not only miraculously acquired the pastel, but she also was able to get the provenance she needed. She explained that on a trip to Palm Springs she was able to obtain La Femme au Chapeau Bleu, along with its certificate of authenticity, which the former owner had kept in her safe deposit box after inheriting an art collection from her father. In addition, Khan told Hudson that she obtained the work in a trade, giving the Palm Springs woman a large-scale European sculpture that had been in her garden.
Something about the pastel apparently didn’t seem exactly right to Hudson. The experienced art broker, unaware of Khan’s scheme, advised her to contact Sotheby’s to discuss the Picasso because of the similarity between the work she had and the one that the auction house had previously sold for $900,000. Thinking that this could not be one and the same as the image he had sent her in a photograph, Hudson posited to Khan that perhaps Picasso made two versions of the work. If this was the case, her work could draw attention in the art world—and that attention could conceivably increase its value. Curiously, Khan was not only uninterested in pursuing such information, she told Hudson “not to say anything about it and to leave the matter alone.”
While Khan’s Picasso only raised questions in the mind of Frederick Hudson, Jack and Vic were impressed with the pastel, which they believed had been created by the storied artist in 1902. They entered into an agreement to purchase it from Khan in 2006 for $2 million. Just a few days later, Khan provided the investors with an appraisal listing the value of La Femme au Chapeau Bleu at $5 million. Vic saw an opportunity to profit from investments in art through Khan’s access to the Forbes Collection, and he set out to form a collective of investors with whom he could gather up valuable Forbes pieces at bargain prices. As part of this venture, Vic gave Khan deposits on the untitled de Kooning and a Renoir from Chateau Allegré, but those deals later fell through.
In 2007, nearly eight months after buying the phony Picasso, Vic decided that it was time to sell it and realize some profit from his investment. He called Jack and informed him of his decision to sell the piece. Jack brought the pastel to Khan’s gallery, where it sat for 17 months unsold. From time to time, the art dealer would contact the owners to say that she had received offers on the purported Picasso, but these were merely creations of her imagination, devised in order to keep the investors at bay.
Soon the pressure on the owners to sell the pastel intensified. The financial crisis of 2007–08 forced Vic’s hand, and he met with a financial adviser to discuss his investment portfolio. As a first step, the financial adviser told Vic to compile a complete inventory of his assets and their itemized values. Apparently not content with a June 2008 appraisal produced by Khan placing the value of the pastel at $5 million, he brought his version of La Femme au Chapeau Bleu to the Silverman Gallery in Beverly Hills. After examining the piece, the Silvermans were concerned about its authenticity and referred Vic to Dr. Enrique Mallen, a professor of Spanish and art history at Sam Houston State University.8 Mallen is a respected expert on the subject of Pablo Picasso and is the general editor of the On-line Picasso Project. The site boasts more than 24,000 artworks in its digital catalogue raisonné and bills itself as “the most comprehensive, authoritative resource on the life and works of Pablo Picasso.”9 Mallen examined what he described as “substantial photographic and textual evidence”10 to compare the Khan Picasso with the pastel that in 1990 had been sold at auction by Sotheby’s in New York. “I immediately knew where to look for comparison since the original artwork is a known pastel, which some identify as a portrait of Jane Avril,” Mallen recalled. “After comparing the two artworks closely, it did not take long to see the similarities and discrepancies.”11 Connoisseurship was undoing the scheme. Mallen’s conclusions were nothing short of damning: not only wasn’t the Khan pastel the same work auctioned by Sotheby’s, it was “not by the hand of Pablo Picasso.” The professor had also found troubling the fact that the signatures on the two works were “to all intents and purposes, identical,” explaining that Picasso’s signatures during the time the original piece was produced “varied considerably.”12 Thus, the Khan pastel could not even have been a separate version created by the master, since the signatures would not have been identical. Instead, their similarity pointed toward a copy.13 Further, as Mallen later stated, “Picasso has never copied himself. He was even quoted as saying that the worst thing an artist can ever do is copy himself.”14
Picasso himself once said that “it is not enough to know an artist’s works. One must also know when he did them, why, how, in what circumstances . . . I attempt to leave as complete a documentation as possible for posterity.”15 Clearly, in this instance, his signing technique at the turn of the twentieth century left documentation that protected his legacy. He once refused to sign one of his paintings for a woman, telling her, “If I sign it now, I’ll be putting my 1943 signature on a canvas painted in 1922. No, I cannot sign it, madam, I’m sorry.”16
Despite this apparent attention to detailing authenticity, however, Picasso’s works have been the subject of rampant art crimes. According to Claudia Andreiu, the legal counsel for the Picasso Administration—the organization responsible for handling permissions and rights for the artist’s works—“Authenticity is a huge issue and is more and more complex, especially with all the fakes and forgeries and all the undocumented works coming into the market in the last few years.”17 This cache of questionable works can often be difficult for experts to authenticate. One of the complicating factors is the absence of an exhaustive catalogue raisonné, due in part to the fact that the artist was so remarkably prolific. While the On-line Picasso Project’s catalogue size is impressive, it accounts for less than half of his more than 50,000 works.
Moreover, in 2012 the Art Loss Register announced that according to its stolen art database, Picasso’s works have been stolen more than those of any other artist. The ALR reported that there are 1,147 stolen Picassos, outpacing the second-most-stolen artist—American painter Nick Lawrence—by more than 2 to 1.18
Picasso’s link to art crime is not only as victim. In 1911, when arguably the most famous painting in the world, Leonardo Da Vinci’s Mona Lisa, was stolen from the Louvre, a young Pablo Picasso was considered a prime suspect, along with his associate, the poet Guillaume Apollinaire. As it turned out, Picasso’s connection to a roguish character named Honoré Joseph Géry Pieret—who himself had pilfered some objects from the Louvre—was the cause for the suspicion cast upon him and he was, of course, eventually removed from the list of suspects.19
Stolen paintings were on the mind of Canadian journalist Joshua Knelman when he was tagging along with legendary LAPD art crime detective Don Hrycyk and his partner as Knelman did research for his book Hot Art: Chasing Thieves and Detectives through the Secret World of Stolen Art. Coincidentally, the author and Hrycyk encountered Tatiana Khan in her home in Los Angeles. Knelman described the scene:
The detectives walked around to the rear of the house. They found a door in the fence and slipped into the back garden, which was full of statues and plants packed tightly together. A narrow path led to a back door. They knocked. A Hispanic caregiver answered and invited them inside. The back hallway opened into a yawning room, two floors high. The room was packed full of antiques and paintings. It was chaotic; it looked like the piled-up remains of what once was a thriving antiques business. An old woman sat in a chair near a row of television screens filled with images from cameras. . . . Before they left, both Hrycyk and [his partner] had noticed what looked like a Picasso perched carelessly on a cluttered sofa. They inquired about it, and the woman told them it was a genuine Picasso worth a huge sum of money. Hrycyk surreptitiously took a photo of the painting with his cell.20
That Hrycyk would have a sixth sense about the work is not unusual. For more than 20 years, he has investigated art theft and forgeries for the Los Angeles police and is arguably the best investigator ever to work art crime cases. While most cops would probably have believed they had stumbled upon some sort of eccentric—or deluded—Miss Havisham character, Hrycyk knew something was amiss with the work. But it wasn’t until another law enforcement officer with a strong background in investigating fraud was on the case that Khan’s scheme would fall apart.
Because of Dr. Mallen’s findings declaring the Picasso pastel La Femme au Chapeau Bleu sold by Tatiana Khan a fake, the matter was referred to the Federal Bureau of Investigation and placed in the able hands of Special Agent Linda English. English had spent nearly 20 years with the FBI when she was assigned the case. With an expertise in fraud and financial crimes investigations, she was well equipped to look into a forgery scam involving millions of dollars in investments. Earlier, she had been the lead agent whose dogged investigative work cracked a major financial fraud scam involving a real estate investor who concocted an elaborate Ponzi scheme through which she convinced 600 people to invest $18 million in foreclosed properties. She also brought down an even larger Ponzi scheme—second only to that of Bernie Madoff—when her work led to the arrest of Reed Slatkin, one of the cofounders of EarthLink. Slatkin had left his ministry in the Church of Scientology to prey upon investors, including some members of his former flock and Hollywood celebrities, ultimately bringing in nearly $600 million from his dupes. English’s work on these cases was noteworthy enough to warrant two segments on the CNBC television show American Greed.
English went to work scouring Khan’s financial records, and she contacted former customers who told of their experiences buying from Chateau Allegré under the impression that they were buying items from the Forbes Collection. She examined wire transfers to confirm payments from Vic and Jack for the pastel, and then twice met with Tatiana Khan herself at her home and gallery in Los Angeles.
The investigator found Khan to be “sickly,” with an oxygen machine and severe scoliosis, and her gallery “packed full with antiques and furniture.” English—who had interviewed countless scam artists in her career—was quickly onto Khan’s scheme, though she did think Khan “was a good liar,” as she recalled, “and used her frailties to her benefit.”21 Also aware that Khan had used the Forbes Collection provenance to establish her bona fides when selling Vic and Jack the fake Picasso, English asked Khan how she came to acquire the piece. The art dealer told the FBI agent an entirely different story than the one she used to make the sale to the pair of investors. This time, Khan stated that she obtained the pastel from a woman named Rusica Sakic Porter around 2005. According to Khan, Porter was an aesthetician she had met when one of her gallery employees visited Porter for a facial across the street from Chateau Allegré. As is the case in many provenance scams, Khan used war to explain the artwork’s dicey history, saying that Porter’s family purchased the work before the Bosnian War. Khan told English that Porter borrowed $40,000 from her and gave her the Picasso as collateral for the loan.
Khan developed the story even further, telling the FBI agent that she had a document she obtained from Porter. She retrieved it and handed it to the investigator, and explained that she had cut the top of the page off because it had the price paid by Porter’s family—$300,000—on it. In order to get a current market value for the work, Khan claimed she contacted Christie’s and Sotheby’s and received values ranging from $2 million to $5 million. Nevertheless, she sold it to Jack and Vic at the low end of that range in order to move it quickly.
Khan’s story became more elaborate still. She told English that after she sold the Picasso, she told Porter that she would determine how much money she owed to her from the sale. Because she was soon departing for a trip to Bosnia, Porter told Khan to pay her bills for her while she was away and upon her return they would make arrangements to settle their finances. However, about a year after her return from Bosnia, Porter died, according to Khan.
English discussed with Khan her claims about selling items from the Forbes Collection. Khan admitted that she was being sued by two former clients about falsely representing that the items she had sold them came from the Forbes Collection. In a departure from what she had told others, Khan told English that she had merely sold a cabinet and some books with Forbes’s stamp in them.
Now Khan had provided two completely disparate provenances for the pastel, neither of which was based in the truth. But the truth was known by English, who described the dealer as “the consummate con.”22 On October 8, 2009, English interviewed Frederick Hudson, the art broker who had originally supplied the photo of the available—and authentic—Picasso La Femme au Chapeau Bleu. During his meeting with the FBI agent, Hudson was forthcoming about his interactions with Khan related to the Picasso, from the moment he sent her the images of available art to her seemingly serendipitous stumble upon the pastel at the home of a woman in Palm Springs. While meeting with Hudson, English reviewed provenance information held by Hudson for the works he was dealing. She noticed that the record Khan produced, which had allegedly belonged to the Porter family from prewar Bosnia, matched Hudson’s records perfectly but for Hudson’s letterhead graphic at the top—the portion that was ostensibly cut off by Khan to remove the original price. English clearly had damning evidence in the case: an apparently forged record of ownership and the third provenance story that Khan had used. This, combined with the findings made by Mallen of the On-line Picasso Project, made it clear that Khan knowingly was shopping a fraudulent piece of art. English now had all she needed to make her case against Khan. But one question remained: Where did it come from?
Special Agent English didn’t have to wait long to find the answer to that question. The very next day after she interviewed him in person, Frederick Hudson telephoned her with a piece of information that he recalled in the hours since their meeting. Once, he recounted, when he was at Chateau Allegré, he was introduced to an art restorer named “Maria,” a trompe l’oeil artist who had regularly worked with Khan. Hudson told the investigator he was shown a book of her work and that he found Maria’s work was “remarkable.”23
English tracked down Maria Apelo Cruz based on Hudson’s information, and because her years of investigating complex fraud schemes had taught her the value of meticulously examining all of the data before her. After she had gone through the larger entries in Khan’s financial records and ledgers, she moved to the smaller expenditures and followed up with the individuals with whom Khan had dealt. She came across a $1,000 payment to Cruz and paid her a visit. After discussing some furniture that Cruz had restored for Khan, English had a question for the artist: “Have you ever seen the painting The Woman in the Blue Hat?” Cruz’s response took the seasoned agent aback: “I painted that.”24
English said she was in “complete shock” when she learned that Cruz had been the artist of the phony Picasso, especially because of the paltry sum she had been paid for creating a work that sold for well over a million dollars. While the FBI agent had been involved in cases involving many millions of dollars, this was her first art case, and the nuances of the art world—both legitimate and illicit—were new to her. Now she was studying up on details like provenance and the authentication of paintings. So while an agent from the bureau’s Art Crime Team might not be surprised to hear that an unwitting forger was paid only $1,000 for a painting, it was news to English. And that’s not to say that the fake wasn’t well done: English would later recall that the prosecutor on the case, an art aficionado herself, considered Cruz’s copy to be “beautiful.”25
The artist, who English found to be “very credible,”26 went on to tell of Khan’s visit and commission to reproduce the pastel in order to help the police trick a thief. And then Cruz described a later visit from Khan in which the dealer predicted the FBI agent’s visit on the topic of the pastel. Cruz informed English that Khan instructed her to lie to the FBI—a federal crime—by stating that she hadn’t copied any art for her. Instead, Khan said, Cruz should simply say that she had restored art for her. She then went a step further and told Cruz to falsify her invoice for the work by indicating that the $1,000 fee was for retouching work on a primitive painting. Cruz told Khan that the request made her feel uncomfortable and refused to take the invoice back in order to make changes. Concerned about what she was hearing, and unwilling to run afoul of the law, Cruz asked where her copy was and Khan was cryptic, saying that she had given it to a friend.
In order to cover all of her bases, English continued to hunt down possible leads she found in Khan’s financial records. Though the majority of the items Khan sold were antiques and furniture, she had bought and sold enough paintings to lead the investigator to create a spreadsheet listing them and their provenance in order to ensure that this affair was not part of a larger scheme.27 After English had tracked each of them down and completed her work examining Khan’s finances, it was time for the bureau to move on Tatiana Khan.
Khan’s attempt to get Cruz to falsify the invoice and mislead the FBI constituted witness tampering, and the false provenance story she gave to English during the interview constituted providing false statements to the FBI. Further, the electronic financial transactions she conducted with Vic and Jack constituted wire fraud. So, on the morning of January 8, 2010, federal agents visited the home of Tatiana Khan and presented her with a summons directing her to appear in federal court for an initial appearance nearly three weeks later. During a search of her home, investigators came upon a de Kooning painting that she purchased with the ill-gotten gains from the counterfeit Picasso. As a result, the feds seized the $720,000 painting from the home.28
The charges against Khan brought with them a maximum sentence of 45 years in federal prison. Now approaching 70 and in ill health, Khan and her attorneys decided to accept responsibility for her crime in what would have been a slam-dunk case for prosecutors. It was a wise move: federal probation officers responsible for compiling a pre-sentence recommendation to the judge cited her extremely poor health as a reason for a downward departure in the sentencing guidelines for her crimes. Sparing the government a trial would also spare Khan a long sentence.
Khan’s attorneys, James Spertus and Amanda Touchton, described her extensive cardiac and respiratory problems as not only cause for a sentence of probation, but as the reason for her crime. “Ms. Khan will not survive any sentence of imprisonment. Ms. Khan committed the crimes of conviction while suffering from extreme financial pressures that resulted from overwhelmingly large medical bills. Ms. Khan has no medical insurance, she turned 70 this year, and she [is] under a crushing debt from staggeringly high medical bills.”29 Federal prosecutors did not put up much of a fight to put Khan away for a substantial amount of time, and she was sentenced to five years’ probation. There was, however, an additional component of the sentence: $2 million in restitution. Toward that end, Khan agreed that the de Kooning painting, which had been seized by federal agents under asset forfeiture rules, should be turned over to Vic, who would inform the court of her cooperation with regard to restitution.30
Less than a year after sentencing, Khan filed for Chapter 7 bankruptcy. It was an unceremonious end for an art dealer who once moved paintings valued in the hundreds of thousands. In her Bankruptcy Schedule B, Khan listed her antiques inventory as being valued at more than $6 million. The U.S. Trustee assigned to the case, Jason Rund, aware of her conviction and fearing that her information might be unreliable, decided to investigate this appraisal further. He contacted two reputable appraisers who informed him of the actual value of the inventory: $750,000. With her business gone, it would prove to be the last exaggerated appraisal Tatiana Khan would ever make.