Here’s a little bit of Upper East Side intrigue: a fancy dealer took it upon herself to double down and sharply increase her profit margin by selling phony paintings and duping the Internal Revenue Service out of millions, federal prosecutors tell us.
The wily Glafira Rosales allegedly hid $12.5 million earned from the sales of “work” by abstract expressionists Jackson Pollock, Mark Rothko, and Willem de Kooning by hiding the cash in secret bank accounts in Spain, the U.S Attorney’s office in Manhattan says. If only the IRS was so aggressive with large corporations: See Apple computer’s many feathered tax shelters.
The feds busted her in Sands Point, N.Y. (aka F. Scott Fitzgerald’s “East Egg” in “The Great Gatsby), early yesterday, and U.S. Attorney Preet Bharara, ever the man with a pithy quote, called her an “artful dodger” (see Dickens, Charles.)
“Her arrest shows that no matter how clever the scheme, attempts to hide income from the government to avoid paying taxes on that income will be discovered and prosecuted,” Bharara said.
Again, we have to note the irony of this arrest on the same day that Apple’s CEO was called to Capitol Hill to explain why billions in company profit found their way into foreign shell companies to avoid U.S. taxes. I bet Rosales would have prefered the hearing on Capitol Hill to being hauled away in cuffs!
The back story: Glafira, beginning in the 1990s, began claiming she had uncovered previously unknown masterworks. She allegedly duped two very prominent Manhattan galleries (unnamed, of course, as that would be unseemly) out of more than $14 million. She even phonied up a Swiss and Spanish owners who claimed to have inherited the paintings.
She transferred a lot of the proceeds to an account maintained by her boyfriend. Of course. There’s always a boyfriend in the mix.
Rosales’ arrest puts finality to a scandal that began with Patrica Cohen’s New York Times scoop just over a year ago. Cohen reported that Rosales was little known when she suddenly appeared in a major gallery with a Rothko, and got the owner to buy it. It was a fake.