What Can You Do if You Buy Stolen or Forged Art and Antiquities?

In February 2023, an art dealer in Palm Beach, Florida admitted to selling millions of dollars’ worth of counterfeit artwork to unwitting buyers. Daniel Elie Bouaziz of Danieli Fine Art and Galerie Danieli in Palm Beach County purchased cheap reproductions online, forged provenance and authenticity paperwork, and resold the forged artworks for a hefty profit. Two months later, in April 2023, a Los Angeles-based auctioneer confessed to creating forged Basquiat pieces for display in the Orlando Museum of Art. Michael Barzman and an unidentified co-conspirator in the case created 20 to 30 of these fake paintings.

These stories are not unique. The news cycle is filled with headlines of forged and stolen artwork from around the world. So, what should you do if you discover that the art you purchased is forged, or even stolen? And what other legal issues can art buyers encounter? This article will examine the legal aspects of the art market, as well as what to consider when inadvertently purchasing forged and stolen art.

Legal Issues in the Art Market

Just like any other transaction, buying and selling art is accompanied by a litany of legal consequences. Copyright law is key to the art market. A copyright is generated automatically each time a piece of art is created. Though the copyright generally belongs to the creator of the work, it can be assigned and sold just like any other property right. Whoever is selling the artwork must either hold the copyright or have permission from the copyright holder to make the sale.

In addition to copyright concerns, it is important to determine if the piece of artwork you are purchasing has any liens or encumbrances attached. If there are liens, you will be unable to obtain free and clear title without first paying them off. Liens and other encumbrances can become attached to artworks in a variety of ways, but one common method is when the artwork is used as collateral for a loan by the prior owner. When the artwork is sold, the debt will either be paid off from the proceeds of the sale, or it will follow the artwork to the subsequent owner.

Once you own your piece of artwork free and clear of any copyright concerns and debt obligations, what happens when years down the road you attempt to sell your artwork only to be told it is a fake, or listed on a stolen art registry?

Forged and Stolen Artwork

The victims of Daniel Elie Bouaziz were refunded their money for the forged artwork they purchased. But how easy is that to accomplish? The answer (typical from lawyers) is it depends. Did you sign a purchase and sale agreement? If so, you likely have a remedy in the contract language. If no contract applies to the sale, you may still be able to assert breach of warranty and fraud claims, among others, depending on the facts of your case.

What if Michael Barzman didn’t sell forged Basquiat pieces but rather, stolen ones? Or, what if the government of Greece calls you and claims your new statue is a cultural relic they want returned? What liabilities can you face? And what recourse do you have?

The answer often depends on whose law applies. The general rule in the United States is that a thief cannot transfer valid title (Giles v. Citizens’ Ins. Co., 32 Ga. App. 207, 209 (1924). That is, even if you are a bona fide purchaser with no knowledge of the theft, you cannot gain valid title to the artwork since the thief had no valid title to transfer. Unfortunately, this often means that you have to return the artwork to the rightful owner, often without any recompense.

This lack of a remedy, however, is not always the case in other countries. For instance, the laws of Switzerland and Italy allow a good faith purchaser to acquire good title; even title superior to the true owner. In Germany, a good faith purchaser can perfect their title after 10 years (Kunstammlungen Zu Weimar v. Elicofon, 536 F. Supp. 829, 845 (N.Y.E.D. 1981)). Finally, Greek law allows a good faith purchaser to acquire title to stolen art only if the work is sold at public auction or on the open market. Therefore, determining what country’s law applies to a claim against your art is an important first step in protecting your property rights.

Assuming the laws of the United States apply, there are various options to consider. First, do you have a procedural defense to the claim? Georgia law allows a rightful owner to seek recovery of their artwork within four  years of either the theft or the discovery of the theft (O.C.G.A. § 9-3-32). This time limit varies throughout the United States from two to 10 years and begins to run at different times accordingly to state law (Ariz. Rev. State. § 12-542; R.I. Gen. Laws § 9-1-13; McGough v. Leslie, 65 A.D.3d 895, 896 (N.Y. App. Div. 2009)). After such time has passed, the rightful owner is said to have given up their rights to the artwork and can no longer seek its recovery. Outside of this procedural defense, many of the same remedies available to victims of art forgery apply: breach of contract, breach of warranty, and fraud claims are all possible remedial avenues.

The art market has its fair share of scammers and thieves. It is important to be informed about your rights and possible remedies in the event you are faced with such a situation. Always be certain to secure free and clear title to your artwork. It is also a good rule of thumb to check stolen art databases before making a big purchase. Lastly, always have your artwork examined by a professional to determine its value and authenticity. In the unfortunate event you determine your artwork is forged, or a potential owner has made a claim against your artwork, you have numerous legal avenues to consider to best protect your interests.

Image Source: Deposit PHotos
Author: serezniy
Image ID: 338549966