The U.S. Attorney’s Office for the Northern District of Illinois unsealed an indictment last week that charged three men for fraud as part of a scheme to create and sell fake paintings, including those by American modernists Ralston Crawford, George Ault, and Gertrude Abercrombie.
The three men identified in the complaint are two Michigan brothers, Donald Henkel and Mark Henkel, as well as Raymond Paparella of Boca Raton, Florida. The three defendants pleaded not guilty during an arraignment in Chicago on April 21.
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In July 2020, the FBI raided Donald Henkel’s home as part of an investigation into the scheme. Reports from the time identified some of the faked works had been sold at Hindman Auctions of Chicago, and two of them had been purchased at auction by Hirschl & Adler, a New York gallery.
The filing lists over 10 victims, who are identified only as auction houses, art galleries, or collectors based in a range of locales, including New York, London, Dallas, northern Illinois, Pennsylvania, California, and Michigan.
The alleged scheme ran from 2005 until 2020, and involved at least three paintings supposedly by Crawford, six by Ault, and one by Abercrombie. Several objects were each sold for more than $50,000, with the highest price paid being just under $400,000. In total, the indictment identifies at least $1.8 million having exchanged hands.
According to the indictment, which was originally filed on April 12, 2022, in the U.S. District Court for the Northern District of Illinois, Eastern Division, Donald Henkel, whose aliases included D.B. Henkel, Donavan Kelly, and Bruce Kelly, was the leader of the scheme. He “created false works of art and memorabilia and then caused these items to be sold, and attempted to be sold, to potential buyers or victims by presenting the items as genuine.”
Henkel allegedly often sold the works directly to the buyers, but at times, according to the indictment, Mark Henkel recruited “co-schemers and other individuals to pose as the sellers, often referred to as straw sellers,” to conceal that the Henkel brothers were the true sellers.
Paparella is identified as having been a straw seller in the indictment. The filing also lists five other unidentified co-schemers, some of whom are identified as relatives of the Henkels.
Though described only as an Illinois-based auction house in the indictment, the main victim of the scheme was Hindman Auctions, which is headquartered in Chicago and which maintains offices across the country, in cities that include Atlanta, Denver, and Cleveland.
It was Hindman who initially alerted the FBI to the fakes, after a client contacted the house about doubts of the authenticity of an unnamed work. “After considerable investigation, including scientific analysis, their painting was found not to be authentic. It was at that time that we reached out to the FBI as the forgery was extremely sophisticated,” Jay Krehbiel, Hindman’s co-chairman & CEO, told the Art Newspaper in 2020. (Hindman declined to comment for this article about news of the unsealed indictment.)
The most highly valued item in the scheme, a faked Crawford painting titled Smith Silo Exton, passed through Hindman, where it sold for $395,000 in a May 2016 sale. The sale is significant as it is the fifth-most expensive work listed as by Crawford ever to be sold at auction, according to the Artnet Price Database.
In addition to providing false provenance for the work, the indictment alleges that Donald “had made the painting falsely appear like one of Crawford’s works, including by adding a signature made to appear to be Crawford’s signature.”
The auction house also sold three faked Ault paintings: Hilltop Farm for $47,500, Stacks Up 1st Ave., for $372,500, and Morning in Brooklyn for $336,000. The latter two Ault works were purchased by Hirschl & Adler at auction. If they had been authentic, Stacks Up 1st Ave. and Morning in Brooklyn would have been the third- and fifth-most expensive works by Ault to ever sell at auction, respectively.
In an email to ARTnews, the gallery said that it had returned the works to Hindman several years ago and “were therefore not a part of any further conservations with anyone during the investigation.”
Hindman also sold the faked Abercrombie, titled Coming Home, for $93,750 at auction. When it sold at auction in 2019, Coming Home was the second-most expensive work to ever sell at auction listed as by Abercrombie. In the past two years, six works have since surpassed the price.
Another faked Ault work, which was titled The Homestead, was sold to a New York gallery, which learned of the work via the owner of an art gallery in Grand Rapids, Michigan. The former paid $110,000, and the latter paid $15,000 to Donald Henkel.
The New York gallery paid an additional $75,000 to an unnamed co-conspirator to pay that person’s mortgage. According to the indictment, the painting, its provenance, and Ault’s signature on the work were all falsified.
A third faked Ault painting, identified as Country Lane, was sold to two art galleries, one based in New York and the other based in Hudson, both of which specialized in Ault’s art, for $77,500. It is unclear how the two galleries are connected based on the indictment.
Three of the faked works, two by Ault and one by Crawford, were never sold, as the buyers ultimately declined to make the purchase after calling the work’s authenticity into question.
In addition to the falsified paintings, their scheme also included the sale of fake sports and music memorabilia, as well as items related to Hollywood and Disney. Among the alleged fake autographs that had been applied to baseballs and bats were those of some of the sport’s greatest figures, including Lou Gehrig, Babe Ruth, Honus Wagner, and Cy Young. In at least one instance, an unnamed auction house declined to auction a bat purported to be signed by Ruth “following examination and testing.”
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In its release about the unsealing of the indictment, the U.S. Attorney’s Office said, “The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”
Source: artnews.com