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New York dealer indicted over massive art fraud

An art dealer who allegedly duped two top New York galleries into buying counterfeit paintings she presented as works by Modernist masters has been indicted for fraud, money laundering and tax evasion.

Prosecutors said Glafira Rosales, 56, will be arraigned in a Manhattan court Friday on charges of selling more than 60 fake works of art between 1994 and 2009 for a total of $33.2 million.

Rosales is also charged with concealing the proceeds of her sales by having much of the money sent to overseas bank accounts and filing false tax returns.

She faces up to 20 years in prison if convicted of fraud and money laundering, the two most serious of the seven counts on which she has been indicted.

"The indictment depicts a complete circle of fraud perpetrated by Glafira Rosales -- fake paintings sold on behalf of non-existent clients with money deposited into a hidden bank account," said Preet Bharara, the US attorney in charge of the case.

According to prosecutors, Rosales managed to convince the galleries that some of the previously unknown works came from two clients -- one based in Switzerland and one based in Spain -- where she had set up bank accounts to receive the payments.

Prosecutors say her Swiss client, presented as a wealthy individual who had inherited the art works, was a "a pure fiction" while the Spanish one was a real art collector but had never owned the paintings he was supposed to be selling or had any business relationship with Rosales.

Rosales's most spectacular success came with the sale of a supposed Jackson Pollock painting known as "Untitled 1950" to the Knoedler & Company gallery, at the time the oldest gallery in New York.

In 2007, Knoedler's then president Ann Freedman sold the work to London collector Pierre Lagrange for $17 million.

Lagrange subsequently discovered that two paints used in the work were not invented until after Pollock had died and launched a law-suit against Knoedler & Freedman in May.

Days after the suit was filed, Knoedler went out of business, after 165 years at the forefront of the New York art market.

Lagrange's action was one of at least six lawsuits initiated by buyers who suspected they were sold fakes, and their doubts triggered an investigation by the FBI.

Other works provided by Rosales were sold by Julian Weissman, another prominent art dealer who had represented the artist Robert Motherwell when he was alive. Rosales is alleged to have supplied at least seven fake works represented as paintings by Motherwell, as well as others presented as works by Mark Rothko and Willem de Kooning.

Rosales, who denies the charges against her, has been in custody since she was arrested in May.

Federal authorities have said she poses a flight risk because of her substantial funds overseas.

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