MANHATTAN (CN) - The 165-year old Knoedler Gallery, which closed in December amid allegations of art forgery, faces a third federal lawsuit, from a collector who claims he paid $4 million for a phony Willem de Kooning landscape.
Wall Street executive John D. Howard claims that Knoedler charged him $4 million for the fake de Kooning, after buying it for one-fifth of that price days earlier.
Howard, individually and as an assignee of art dealer Jaime Frankfurt LLC, claims that Knoedler, its former president Ann Freedman, its owner Michael Armand Hammer, art dealer Glafira Rosales and others conspired to defraud him.
"The conduct of the defendants in this case was not merely fraudulent, though it certainly was that," the 61-page complaint states. "As detailed below, the enterprise was a paradigmatic example of the activity barred under the Racketeer Influenced and Corrupt Organizations Act ('RICO')."
The FBI is believed to be investigating whether Rosales sold about 20 forgeries as original works by Jackson Pollock, Robert Motherwell, Mark Rothko and others.
According to the complaint, Rosales may have obtained the forgeries from her "live-in companion" Jose Carlos Bergantinos Diaz.
Though the works came from Rosales, Howard claims that Freedman told buyers that she got them from New York-based art dealer David Herbert, who died in 1995, and is not a party to the complaint.
Knoedler employee Jaime R. Andrade, a defendant, had been "involved in a personal relationship with Herbert" and "facilitated the fabrication of Herbert's involvement," according to the complaint.
According to the new lawsuit, Hammer let sleeping dogs lie he learned that the International Foundation for Art Research called the provenance claims for one of Rosales's works "inconceivable."
"Far from shutting down the pipeline of works from Rosales, Hammer oversaw the continuation of the enterprise, saying to Freedman 'don't kill the goose that's laying the golden egg,'" the complaint states. "Hammer knew it was quite a goose."
Just days after this alleged conversation, Knoedler bought the fake de Kooning painting that it sold to Howard at a 500 percent markup, according to the complaint.
Freedman's attorney, Nicholas Gravante Jr., with Boies, Schiller & Flexner, blasted a previous lawsuit over an allegedly forged Rothko as "nothing more than a copycat" of the original one, over an allegedly phony Pollock.
Gravante made a similar statement about the de Kooning case to The New York Times.
"This is a copycat case which, like its predecessors, has no possibility of success," Gravante told the Times, according to a July 6 story. "We are prepared to demonstrate that the work at issue is genuine."
Howard seeks $3.5 million, plus treble damages, from the Knoedler Gallery, its sole member 8-31 Holdings, Freedman, Rosales, Hammer, Andrade and Bergantinos Diaz.
He is represented by John Cahill with Lynn Cahill.