Fake Art Auctions Bilks Buyers Out of Millions: Eubanks, Sullivan

Kristine Eubanks, and her husband, Gerald Sullivan, were charged Monday, March 5, with conspiracy to commit mail fraud, wire fraud and interstate transportation of stolen property.^[1] The couple admitted that they manipulated the auctions of art and jewelry by creating inflated bids, and that they purchased fake art, forged art at a print shop, and forged signatures of artists including Picasso, Chagall and Dali, and then sold the bogus works on their show.^[2] Prosecutors said the couple also created false appraisals and certificates of authenticity.^[3]

The couple's operation ran through a satellite television show "Fine Arts Treasures Gallery." The government estimates that the show defrauded more than 10,000 people of more than $20 million for spurious art. Investigators seized around $4 million when Eubanks and Sullivan were arrested during a raid in September.^[4]"The defendants in this case have admitted to profiting by preying on the vulnerabilities of producers and consumers of art through an elaborate criminal enterprise," said J. Stephen Tidwell, assistant director of the FBI in Los Angeles.^[5]

Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.

Wire fraud, which is a crime under 18 U.S.C. § 1343, makes it a crime for a person to devise a scheme or artifice to defraud and use wire, television, or radio communication technologies to carry out the scheme. Violating section 1343 can be punished by a fine, imprisonment for up to 20 years, or both. If a financial institution is harmed in the commission of the fraud, the fine can be as high as $1,000,000 and the prison sentence can be up to 30 years.

Under 18 U.S.C. § 2314, it is a crime for a person to transport any good in interstate or foreign commerce with a value of at least $5,000, knowing that that good is stolen.

Eubanks could face up to 10 years in federal prison; Sullivan up to six. Eubanks has been in custody since the September raid because she was on probation at the time.^[6]

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^[1] Brett Zonfker, TV art scam bilked buyers of millions, AP (Via Akron Beacon Journal), March 06, 2007
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.