How did David Mirvish end up in the decade’s most shocking art forgery scandal?

Richard Warnica 0 Premium content image
Jackson Pollock

(Jackson Pollock, Number 8)

On the day he revealed the project that would define his legacy in Toronto, David Mirvish, theatre producer, art collector and only son of retail legend “Honest Ed” Mirvish, wore a dark blue suit with a white shirt and a bright blue tie. At 69 years old, Mirvish is nearly bald, but like many wealthy men, he otherwise wears his age well. On that day, in October 2012, he had reason to look pleased.

Standing in a room in the Art Gallery of Ontario, side-by-side with famed architect Frank Gehry, Mirvish unveiled a massive three-tower condo complex with an art museum at its base. It was a development that could remake an entire section of downtown Toronto. It would also give a permanent home to the art Mirvish has spent his lifetime acquiring. It was, in every respect, an audacious bid, one meant to cement the Mirvish name in Toronto, to make it synonymous, in the way Guggenheim is, with fine art.

Four months later, in a courthouse in Manhattan, lawyers working for Mirvish disclosed his entanglement in another art project, one that was equally audacious, if not quite as well advertised. It involved allegations of serial forgery, a mysterious millionaire and a bundle of wealthy financiers. Even by the baroque standards of the New York art scene it was a scandal.

Over the following months, the details of the story only grew stranger. The players, which included an heir to the Armand Hammer fortune, a Goldman Sachs executive and an obscure Long Island art dealer, all ended up locked in litigation. Knoedler and Co., the oldest continually operating art gallery in New York, was forced to close its doors. And Mirvish, the Canadian theatre magnate famous for bringing The Lion King and Mama Mia to Toronto, was right in the middle of it.

 

Mirvish opened his first art gallery, down the street from his father’s department store, in 1963, when he was 18 years old. He closed it 15 years later, then built one of the finest private art collections in the country. Today, Mirvish is known around the world as one of a handful of collectors that matter in several fields of 20th-century art, and a leading connoisseur of painters, including Frank Stella and Jules Olitsky.

mirvish

(Ian Willms/Toronto Star/Getty; iStock)

He has also been known as an important client of the Knoedler gallery in New York. When Mirvish was still a dealer, both his gallery and Knoedler were involved with some of the same artists, including Stella and Robert Motherwell. The relationship continued long after Mirvish closed his doors in 1978. According to internal Knoedler documents, Mirvish co-owned at least a dozen works with Knoedler at one time or another, including paintings or sketches by significant artists such as Olitski, Helen Frankenthaler and Stella. (This kind of co-investment is not an unusual arrangement in the art world, says Peter Stern, an art lawyer in New York. Without access to outside capital, most galleries wouldn’t be able to buy, hold and later sell many valuable paintings.)

Mirvish’s relationship with Knoedler took a big step up in 2002, when the gallery asked him to invest in a newly discovered, untitled work by Jackson Pollock. Supposedly painted in 1949 or 1950, the painting had a silvery background and featured wild swirls of red, black and yellow paint. Mirvish agreed to spend $1.6 million for a half share in the painting. A year later, the gallery offered him an investment in another one, this time for $1.25 million.

The second Pollock—a small greenish canvas painted with oil and enamel—differed from the first in one important way, however: Knoedler had already sold it once before. Jack Levy, at the time a senior partner at Goldman Sachs, had purchased the painting for $2 million in 2001. He returned it in 2003 after questions emerged about its authenticity. In fact, by the time Mirvish invested in the green Pollock, experts had already raised significant questions about its quality and provenance—the art world’s term for a work’s chain of ownership. (An expert at one leading organization called the painting “limp.” Another said it was too “formulaic” for a Pollock.) But that didn’t stop Mirvish. He invested in the green Pollock through a complicated financial arrangement in late 2003. In 2007 he invested in a third Pollock through Knoedler, again buying what amounted to a 50% stake, this time for $2 million.

By that time Mirvish had already learned more about the source of the Pollocks, and about the larger collection they came from. All three Pollocks had come to Knoedler through Glafira Rosales, an obscure Long Island art dealer who had been introduced to Ann Freedman, Knoedler’s president, in the mid-1990s by Jaime Andrade, a longtime Knoedler employee and a staple in the New York scene. According to internal Knoedler documents and various court accounts, the story Rosales proceeded to tell her was a truly astounding one.

Rosales claimed to have been family friends with a wealthy Mexican art collector who had secretly bought dozens of works by some of the 20th century’s most famous painters—including Pollock, Mark Rothko, Motherwell, Willem de Kooning, Barnett Newman, Sam Francis and Franz Kline—beginning in the late 1940s. The collector had kept the works in storage for decades, never showing them at galleries or lending them to museums. After his death, his son, who split his time between Mexico City and Zurich, and didn’t care for art, asked Rosales to sell the works for him, without revealing his identity or that of his father.

Rosales was asking Freedman to bring these works to market. But she had no paperwork to attest to their authenticity, no bills of sale, no contracts from the artists. None of the works were included in any of the official catalogues of the painters’ works. And Rosales wouldn’t tell Freedman the identity of the mystery collector, who came to be known in internal Knoedler correspondence as “Mr. X,” and, at various times and in various tellings was known as a closeted millionaire connected to the gay art scene, an émigré sugar magnate of eastern European descent and, in a story told by another dealer who sold Rosales paintings, a high-born sheika from Kuwait.

On her own, Rosales would have had little hope of getting a decent price for the paintings. But if Knoedler were to stand behind them, it would be a different story. Founded in 1846, Knoedler was an institution in the New York art world. The gallery predated the Metropolitan Museum of Art, and up through the 1960s and 1970s it continued to represent top-tier working artists. By the time Freedman became president in the 1990s, many believe Knoedler’s best days were behind it. “It was a bit like a dowager lady,” says Pepe Karmel, a Pollock expert at New York University. “They went on showing the same wonderful blue-chip artists, but the art world moved on.” Still, the Knoedler name meant something in New York. And if the gallery were to say the paintings were real, many art buyers would believe it.

What the gallery did—or didn’t—do to determine the paintings’ authenticity eventually became the central dispute in several lawsuits. Freedman and her lawyers (who are also, by the way, Mirvish’s lawyers) say she and the gallery interrogated Rosales’s story in every way possible. The gallery hired E. A. Carmean—a former curator who once exhibited a collection of Mirvish’s art—to research the history of the works. Freedman also showed them to a variety of experts, several of whom expressed their admiration for the paintings in writing. Other experts say they were shown the paintings, but were not asked if they were real. Lawyers for collectors suing Freedman and Knoedler also say both the gallery and its president ignored mounds of evidence that should have undermined Rosales’s tale. (To cite just one example, her longtime partner had once been implicated in a forgery scandal.)

In any case, beginning in the 1990s, Freedman began to sell the Rosales works through Knoedler. And in 2001, having already sold a significant number of them, she offered the green Pollock to Levy. He, however, attached a significant condition to his purchase. Levy said he was only interested in the work if it could be officially authenticated. That presented a problem. For legal reasons, the Pollock-Krasner Foundation, which represents Pollock’s estate, no longer authenticates new works attributed to the artist. Most independent experts, meanwhile, are leery of being sued, and few will officially pass judgment on a work. The best remaining option, Levy decided, was a body known as the International Federation for Art Research, or IFAR, which was established precisely for situations like the Rosales collection. The organization, in return for a promise not to be sued, will set up an independent panel of anonymous experts to examine and pass judgment on a disputed work. After buying the green Pollock, Levy submitted it to IFAR under the understanding that if it chose not to authenticate it, Knoedler would return his $2-million payment.

The report IFAR submitted, on Oct. 9, 2003, was equivocal. Some of the experts on the panel were “fully convinced” the painting was by an imposter. “I don’t feel the flow,” one expert said. Another called it too “controlled.” Others, however, thought it could be an original Pollock. The committee found no evidence to support the backstory Knoedler had established about the painting. But it also found no definitive proof the work was a fake. And given some “strongly negative opinions and the lack of information as to prior ownership” the board decided it could not authenticate the painting. Later that year, Knoedler bought it back.

The reaction within the gallery to the IFAR report fell between incredulity and outright dismissal. Michael Hammer, industrialist Armand Hammer’s grandson and the owner of the gallery, considered the report “biased and unprofessional,” according to internal Knoedler correspondence. Freedman, meanwhile, felt the board’s reasons for dismissing the painting were flimsy at best. She commissioned more research, and when it came back it became “clear to everyone at Knoedler that the [IFAR] report wasn’t worth the paper it was written on,” says Luke Nikas, a lawyer for Freedman and Mirvish.

The report certainly did not stop Knoedler from selling more Rosales paintings. Shortly after Levy returned the green Pollack, the gallery offered Mirvish the chance to invest in it. Hammer’s advisers insisted the gallery show Mirvish the IFAR report. But nothing in it dissuaded him from investing. “I saw the IFAR report, and I considered it carefully,” he said in a deposition last year. “I considered all the aspects of it, particularly the fact that it didn’t identify who the experts were who had given their opinions. I weighed it carefully and ultimately I felt it was without substance.”

Interestingly, however, Mirvish is the only potential investor or buyer of a Rosales painting who has come forward that was told that the report even existed, let alone what it said. When the same painting, the green Pollock, was offered years later to another collector, the report was not disclosed.

So why did Mirvish get special treatment? His lawyer, Luke Nikas, says it was a timing issue. Between Mirvish seeing the report and the next Rosales sale, even more information came in, Nikas says, all of which further undermined IFAR’s credibility.

In any case, Knoedler went on selling Rosales paintings. In 2007, Pierre Lagrange, a Belgian hedge fund manager, agreed—through an intermediary—to buy one of the Pollocks that Mirvish co-owned. The price he paid, $17 million, represented an enormous return on investment for Mirvish and Knoedler, even with the intermediary’s $1.5-million commission factored in.

That sale, however, would eventually boomerang on Knoedler. In a way, it would precipitate the gallery’s ultimate demise. But that was years down the line. In the interim, more paintings were sold and more questions emerged about the collection as a whole, and its source.

Rosales, it was later revealed, wasn’t shopping her collection to Knoedler and Freedman alone. Andrade had also introduced her to Julian Weissman, a former Knoedler dealer who later opened his own gallery. According to court documents, Weissman sold about 23 paintings from Rosales over more than 10 years. Three of those were supposedly by Robert Motherwell, each from his famed series Elegy to the Spanish Republic. It was one of those supposed elegies that started the trouble.

(Robert Motherwell, Elegy to Spanish Republic #131)

(Robert Motherwell,
Elegy to Spanish Republic #131/Courtesy of Bridgeman Art Gallery)

Before selling that particular Motherwell, Weissman sought an opinion on the work from the Dedalus Foundation, a non-profit group in charge of putting together a definitive list of official works (known in the art world as a catalogue raisonné) for the artist. Based on who Weissman was—he had personally represented Motherwell at Knoedler—and the story he told, which included the Kuwaiti sheika, the foundation offered a preliminary, conditional opinion that the painting was real.

It wasn’t long, however, before the foundation began to grow more suspicious. According to an account filed by the foundation’s lawyers by 2011, board members at Dedalus were concerned not just about Weissman’s Motherwell, but all seven of the Motherwells from the Rosales collection, including four for sale at Knoedler.

In December 2007, Freedman was invited to Dedalus and shown what the foundation called “documentary evidence” that questioned the authenticity of the Rosales Motherwells. The paintings seemed “stylistically overwrought, too full of drip marks” and had “atypical surfaces” the board allegedly told her. A week later, two board members came to Knoedler in person and pressed their case again, arguing that the story of the Motherwells provenance was simply not credible.

Those meetings kicked off nearly two years of feverish lobbying and argument over the Motherwells. On several occasions, Mirvish himself became involved. In 2008 and 2009, he pressed experts, including Jack Flam, the president of the Dedalus Foundation, on the works. “I not only am convinced of the rightness of the Motherwell,” he wrote in a draft of an e-mail to Flam retained by Knoedler, “but I have seen other works by a variety of artists from the same source and I am convinced of the correctness of each of these works.”

Mirvish had no direct financial interest in the Motherwells. So on the face of it he had no obvious reason to be pitching those paintings. John Cahill, a lawyer for John Howard, a Wall Street executive, believes Mirvish became involved for a simple reason: “Money.” Mirvish spent millions of dollars investing in Pollocks from the Rosales collection. If any one painting from that group turned out to be forged, all of them would be worthless. By standing up for the Motherwells, Cahill believes, Mirvish was standing up for the collection as a whole, and by proxy, for his own investment.

All that lobbying came to naught, however. After at least one board member, according to court filings, called them “laughable fakes,” the Dedalus board voted unanimously to revoke the provisional authentication it had granted to the painting Weissman was selling. The final buyer of that painting sued. And, as part of an eventual settlement, the painting was seized and the canvas stamped, in indelible ink, with the word “forgery.”

By the time that settlement was reached in 2011, the entire Rosales story had started to crumble. A series of scientific tests had already raised serious questions about the materials used in several Rosales painting by that point. And in September 2009, after learning of the Motherwell matter, the FBI subpoenaed Knoedler’s records. Not long afterward, Ann Freedman left the gallery for good.

The next piece to tumble touched Mirvish directly. In 2010, Lagrange, who had purchased one of the Pollocks that Mirvish co-owned, tried to sell his painting at auction. Both Christie’s and Sotheby’s, however, rejected the work because of its dubious provenance. Incensed, Lagrange demanded Knoedler give him his money back. The gallery refused, partially because it didn’t have all the money. Mirvish, too, had walked away with a significant chunk of the profits from that sale. Lagrange then submitted his painting for scientific analysis. He presented the subsequent report—which found the painting contained pigments not commercially available when Pollock was alive—to Knoedler on Nov. 30, 2011. The next day the gallery, after more than 160 years of continual operation, closed its doors forever.

On Dec. 1, 2011, Lagrange sued Freedman and Knoedler for selling him what by then he believed was a forgery. Over the next 14 months, a who’s who of wealthy art collectors followed suit, all claiming Knoedler sold them fake paintings sourced from Glafira Rosales, and all naming Freedman as a co-defendant.

All of them, that is, except one.

David Mirvish, too, sued the Knoedler Gallery, in February of this year. But unlike the other wealthy collectors, he didn’t name Freedman as a co-defendant. In fact, he used her lawyers to file his suit. What’s more, while the other collectors were universally convinced by then that the Rosales paintings were forged, Mirvish was still insisting they were real. He was suing the gallery, essentially, for breach of contract, because it wasn’t trying to sell the Pollocks anymore. As part of his suit, he even demanded Knoedler hand over two of them—works the vast majority of the art world then viewed as forged—for his own personal collection.

At that point the paintings had been rejected by the Dedalus Foundation, IFAR and at least three sets of scientific tests. But Mirvish still stood by them.

Through his lawyer, he declined to explain why to Canadian Business. But in May of last year, Cahill, the lawyer acting for Howard, asked him exactly that in a deposition.

“I didn’t have a question of authenticity,” he replied. “I had E. A. Carmean’s opinion, and I had the context of these pictures having been in public for some time and been seen for some time, and I had my own experiences that told me these pictures were pictures of note.” Even after IFAR, and Dedalus and the tests, Mirvish said his views hadn’t changed. “Do you, today, believe the works to be authentic?” he was asked. “Yes,” he replied. “I do.”

The lawyer then probed Mirvish about his larger involvement in the Rosales collection. Over the years, Mirvish told him, he had considered buying Rosales paintings supposedly by Barnett Newman (Or “Barney” as Mirvish calls him in the transcripts) and Motherwell (“Bob,” to Mirvish). He also reached out to scholars, including Richard Shiff, an art historian at the University of Texas, to gauge their views on their works. (Shiff, in an e-mail to Mirvish, said he was puzzled by the “history or, lack of a history” of the one Newman he saw.)

Asked why he had inserted himself into the Motherwell situation, urging Jack Flam at the Dedalus Foundation to reconsider the works, Mirvish again said it was because he wanted to buy one for himself. As for the Pollocks, the paintings that got him involved in the first place, Mirvish said it was enthusiasm for the works that first lured him to invest. He had never owned a Pollock himself. But he considered the artist “at the root” of his entire collecting career. He also said he did not doubt that Mr. X, the supposed millionaire collector with ties to the gay art scene, existed. He even did some of his own research to try to figure out who he was. “Although I’m not very computer literate,” he said, “I did Google and search around and had hopes.”

Those hopes, if they hadn’t been already, were dashed on Sept. 16 of this year. That’s the day Rosales gave up the whole game. After pleading guilty to charges including wire fraud, tax evasion and money laundering, she admitted the paintings—all 63 of them—were fakes. The stories she told Freedman and Weissman of the mysterious Mr. X were phony too, although the reality was no less outlandish.

For nearly 20 years Rosales and her boyfriend—a man named Jose Carlos Bergantiños-Diaz—had been passing off paintings by an obscure immigrant artist from China as the works of 20th-century masters. According to court filings, Bergantiños-Diaz discovered the artist—identified by the New York Times as Pei-Shen Qian, a semi-successful painter whose career stalled when he came to the United States—while he was selling his own works on the streets of Lower Manhattan. Beginning in the mid 1990s, Bergantiños-Diaz and Rosales paid Qian a few thousand dollars per work to create forged Pollocks, Rothkos, de Koonings and Motherwells from a studio in Queens. Rosales then sold those works to Knoedler and Weissman for a total of $33 million. The two galleries in turn sold those same paintings to collectors for more than $80 million.

 

After the guilty plea, Mirvish dismissed his suit against Knoedler, although he retained the right to refile it at a later date. Today, Nikas, the lawyer for Mirvish and Freedman, says both his clients accept that the entire Rosales collection was forged. But, he says, they weren’t the only ones fooled. “Every single expert who looked at the works believed in them, and told Ann that,” he says. “So was the art world tricked? Sure was. But did the art world do something wrong? Was Ann engaged in wrongdoing? Absolutely not.”

It is true that some experts were fooled by the collection, though nowhere near all of them, as Nikas claims. And it’s hard to find anyone in the art world, outside lawyers acting for other collectors, who believes Mirvish acted with malice. “I cannot imagine David Mirvish being involved with anything to do with art that he did not honestly believe was a bona fide operation all the way around,” says Shiff, the art historian.

That’s not to say people don’t have questions about Mirvish, or his role. Some believe he was acting as a naked speculator in the case, buying low on works with dubious provenance in the hopes of making a huge profit if they turned out to be real. John Cahill, meanwhile, blames Mirvish—along with Freedman and Knoedler—for giving the Rosales paintings the entree they needed into the high-art world.

But the impression that emerges from Mirvish’s e-mails and correspondence is not of a man trying to con anybody. If anything, he comes off as a bit naive—willing to ignore the objections of outsiders in order to believe a great tale. At one point he even mused in an e-mail that officials at the Dedalus Foundation who doubted the Motherwells were doing “a lot of mischief and great harm to the service of scholarship and research” instead of, as it turned out, accurately debunking a set of phony works.

Mirvish wasn’t the only one to buy into the Rosales collection. But he was one of the last left clinging to the idea that it might be real, even though he was the lone collectors offered access to the IFAR report. Had the whole thing not unravelled, Mirvish could have made millions in profit off phony masterworks painted in a Queens garage. After 50 years in the art world, those facts won’t erase the Mirvish legacy. But they might colour it—as much as any museum at the bottom of a condo tower will.

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