Apparently some art dealers are just not honest. What a surprise. From praise (Arts and Antiques article on them) to fraud in a few short years:
From the FBI website: A federal grand jury in San Jose returned a
12-count indictment charging two antique dealers with conspiracy to commit mail
fraud and wire fraud, mail fraud, and wire fraud relating to a
multi-million-dollar investment scheme, announced United States Attorney
Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J.
Johnson, and United States Postal Inspection Service Acting Inspector In Charge
Anthony Barreiro, 64, and Ernest Ray Parker, also known as Ray Parker
Gaylord, 50, ran an antique business together, Charles Gaylord &
Co., and the San Francisco-based ARTLoan Financial Inc. They allegedly worked a "Ponzi" scheme that took $1.5 million from investors.
According to the indictment, Barreiro and
Gaylord explained to investors that ARTLoan was a licensed pawn broker that
owned valuable pieces of artwork worth millions of dollars. Barreiro and
Gaylord further informed investors that ARTLoan helped collectors finance the
purchase of valuable pieces of artwork, many of which were purchased through
public auctions, and in the process, allowed ARTLoan to cultivate business
relationships with high-profile auction houses, such as Sotheby’s and
Christie’s, among others.
Barreiro and Gaylord allegedly explained that
ARTLoan’s financing options would help collectors finance up to 50 percent of
the value of the piece while requiring the collectors to transfer ownership of
the subject artwork to ARTLoan as collateral until the conclusion of the debt
Alternatively, if a collector already owned outright a particular
piece of artwork, ARTLoan would provide the collector with financing of up to
50 percent of the appraised value of that particular piece of artwork while
requiring the collector to transfer ownership of the subject artwork to ARTLoan
as collateral until the conclusion of the debt obligation.
They allegedly paid investors $1.8 million in "Ponzi" payments to
keep the appearance of a return, spending the rest on themselves.
In a Sept. 2009 profile of ARTLoan Financial that ran in Art & Antiques magazine, Barreiro
is quoted as saying, “My bankers rub their hands like Shylock, hoping
for default” in order to take possession of the art, “but I don’t want
our customers to default.”
ARTLoan filed for bankruptcy in 2011. Among the creditors is
Gaylord's father, Charles, who is owed $453,000. Charles started the
antique business which was also run by the duo under investigation.
Charged with 12 counts of conspiracy, mail fraud and wire fraud
allegedly committed between 2008 and 2010, the pair faces up to 20 years
in prison for each count. The trial has not yet been scheduled and the pair are out of custody on bond.