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Fraud Friday – Art Seller Uses Fake Paintings as Collateral in $6 Million Fraud Scheme

March 13, 2020

By Caity Witucki
Contributing Editor, Fraud Friday

Fraud Friday – Art Seller Uses Fake Paintings as Collateral in $6 Million Fraud Scheme

Philip Righter, A West Hollywood resident, pleaded guilty Tuesday to federal criminal charges surrounding the sale of bogus art which he claimed was created by artists such as Jean-Michel Basquiat, Keith Haring, Roy Lichtenstein and Andy Warhol. According to court records, Righter used the falsified artwork as collateral for loans on which he later defaulted, and for write-offs on his income tax returns.

According to the plea agreement, from 2016 to 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 went to great lengths to ensure that the artwork would appear real to the casual observer, using a series of authentication stamps that appeared to be from the artists’ estates. Righter also went as far as to use fake names when he sold the artwork. On at least one occasion he claimed to be Gerard Basquiat, the father of the artist, Jean-Michel Basquiat.

In February 2016, Righter submitted a purported Keith Haring signed work to an online lender to use as collateral, claiming he had originally purchased the piece for $103,200. The online lender, P.G., dispersed the loan in good faith. However, when Righter defaulted on the loan, P.G. attempted to auction the work and discovered that the painting was fake. As a result, the online lender lost $35,341.

Similarly, on August 4, 2016, Righter submitted a loan application to a different lending company for $270,000. As collateral, Righter offered the same Keith Haring painting along with a photoshopped certificate of authenticity and provenance document. However, a representative of the lending company found the piece suspicious and contacted the auction house identified on the fraudulent document. Learning that the provenance document was fraudulent, the lender did not go through with the loan.

Righter applied for at least three other loans before the fraud scheme discovered. In total, Righter’s loans and sale of artwork caused an actual loss of at least $758,265 and had an intended loss of at least $5,656,600. Additionally, his fraudulent tax returns cost the United States more than $100,000.

If the Central District Court of California accepts Righter plea agreement, he 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.

Sources:
Department of Justice

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