US federal prosecutors have charged a New York art dealer with tax fraud in connection with the sale of paintings she claimed to be the works of celebrated artists, but some of which the government said were fakes.
Glafira Rosales, 56, faces three counts of filing false tax returns and five counts of concealing a Spanish bank account from the US Internal Revenue Service.
"Rosales gave new meaning to the phrase 'artful dodger' by avoiding taxes on millions of dollars in income from dealing in fake art works for fake clients," US Attorney Preet Bharara said in a statement on Tuesday .
Prosecutors said she hid at least US$12.5 million between 2006 and 2008. If convicted, the Mexican native faces up to five years in prison on each charge related to the bank account.
Tuesday's charges mark a turning point in an unusual case that, according to prosecutors and court papers, had its origins in the 1990s, when Rosales began selling dozens of previously unknown works by celebrated artists such as Willem de Kooning, Robert Motherwell, Jackson Pollock and Mark Rothko.
Many of these works were counterfeit, according to experts cited by the government and lawsuits against dealers that sold works from Rosales. One dealer, M. Knoedler & Co, shut down in 2011 after 165 years in business.
Rosales was arrested on Tuesday at her home in Sandy Point, New York, and she made an initial court appearance in Manhattan federal court in the afternoon.
Her lawyer, Steven Kartagener, argued she was not a flight risk and could post her home as security for bail. The judge disagreed and detained Rosales, setting June 20 as her next court date.
According to the indictment, Rosales reaped US$14.7 million by selling to Knoedler and another gallery about a dozen works she said were by De Kooning, Pollock and Rothko.
Prosecutors said Rosales claimed to represent a Swiss client or a Spanish collector, neither of whom existed, but instead kept most proceeds and transferred large sums to her boyfriend.