West Hollywood man admits to modern art fraud scheme using fake works for sale, collateral for loans, and write-offs on tax returns

 

Date: March 10, 2020

Contact: newsroom@ci.irs.gov

LOS ANGELES – A West Hollywood man has agreed to plead guilty to federal criminal charges that he sold bogus art he claimed was created by artists such as Jean-Michel Basquiat, Keith Haring, Roy Lichtenstein and Andy Warhol. He also admitted using fake paintings as collateral for loans on which he later defaulted, and using fraudulent pieces for fraudulent write-offs on his income tax returns.

Philip Righter was charged today in United States District Court with wire fraud, aggravated identity theft and tax fraud. In a plea agreement also filed today, Righter agreed to plead guilty to the three felony offenses.

In total, Righter's scheme attempted to bilk victims out of well over $6 million, and he caused losses of at least $758,265. Additionally, his fraudulent tax returns cost the United States more than $100,000, according to the plea agreement. From 2016 until June 2018, Righter executed a scheme to defraud people, businesses and the United States by using counterfeit and fraudulent art that he asserted was genuine. Righter supported these false claims with fraudulent provenance – or chronology-of-origin – documents that he had created.

Before August 2016, Righter generally conducted these fraudulent transactions in his own name. But after the FBI and the Los Angeles Police Department interviewed him about bogus Keith Haring art he attempted to sell to a Miami art gallery, Righter began using the names of other people to execute his scheme, court documents state. In order to make the fake artwork appear authentic, Righter ordered and used embossing stamps that appeared similar to the authentic stamps used by the estates of Basquiat and Haring authentic art by these artists. Righter admitted he used these stamps on provenance documents that he created and were later used to deceive his victims into believing the artwork was legitimate.

For example, Righter fraudulently used without authorization the name and signature of Gerard Basquiat – Basquiat's father and previous administrator of the artist's estate – on fraudulent provenance documents, court documents state. Righter also falsely used the identifications of the estates of Basquiat and Haring, falsely used the names of these two artists, and falsely used the name of a legitimate gallery where Basquiat art was previously sold.

In furtherance of the scheme, Righter obtained and attempted to obtain numerous loans by using the fraudulent art and accompanying fraudulent provenance documents. For example, in October 2016, using another person's name, Righter contacted a victim about a loan in which a purported original drawing by Basquiat would be used as collateral. Righter created a fraudulent certificate of authentication letter that purportedly came from Basquiat's estate. The victim wired a $24,000 loan, on which Righter later defaulted. After Righter's default, the victim attempted to auction the piece, but the auction house determined the piece was fraudulent, and the victim lost $24,000.

Righter also sold or attempted to sell numerous pieces of fake modern art. In August 2017, using another person's name, Righter listed a purported 1983 piece of art by Basquiat with the word "Samo" written on it with an art sale website and he provided fake provenance documents. The website sold the piece for $50,000. In 2018, after the piece was determined to be fraudulent, the website had to refund the purchase price to the buyer.

Righter also admitted that he knowingly and willfully included a false W-2 and a false donation of fraudulent art to a charity on his 2015 federal income tax return, which resulted in him fraudulently receiving a refund of $54,858. Righter then signed and filed a false 2015 amended tax return, which claimed a false casualty and theft loss of $2,575,000 related to artwork he claimed had been stolen. In truth, the artwork was fraudulent and had no value. This bogus amended tax return resulted in false carryback loss refunds for 2012, 2013 and 2014 totaling $52,485, according to court documents.

Once he enters guilty pleas to the three charges, Righter will face a statutory maximum sentence of 25 years in federal prison. Righter also currently faces charges in the Southern District of Florida for an approximately $1 million attempted art fraud on the Miami gallery. A hearing in that case is scheduled for March 11.

he IRS Criminal Investigation, FBI's Art Crime Team, and Los Angeles Police Department investigated this matter. This case is being prosecuted by Assistant United States Attorneys Mark A. Williams and Erik M. Silber of the Environmental and Community Safety Crimes Section.