Insights & Reports > Kroll Global Fraud Report

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Marlinda Simon

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Last November, in the ancient Czech city of Hradec Králové, a man walked into the Novy Bydzov museum in broad daylight, tied up the lone cashier, and made off with two 1930s-era paintings by Czech artists Jan Zravy and Vaclav Spala, along with other valuable antiques. In early March, local police swooped down on the thieves’ hideout and recovered the stolen goods, valued at about US$190,000. The thieves face five to twelve years in prison.

There is no shortage of interesting tales like this one about art theft and the sleuths who investigate it. Raw material abounds. According to Interpol, such theft is the fourth-largest crime worldwide after drugs, money laundering, and arms sales. The United States Federal Bureau of Investigation (FBI) estimates that the industry is worth US$6 billion a year. Yet success stories like the one in the Czech Republic are few and far between – only 12 to 15 percent of stolen art is ever recovered, according to the Art Loss Register (ALR).

The ALR was established in 1991 by the art trade and the insurance industry to document stolen art of all kinds. Its sources of information include victims, art trade professionals, insurers, loss adjusters, and law enforcement agencies.

According to the ALR, the total number of stolen items worldwide stood at 203,734 in January 2009, up 12 percent from last year and nearly 50 percent since January 2004. Of the items registered as of January 2009, more than 95 percent, or 194,161, are still missing.

Although the ALR lists Britain, the United States, and France as the countries where art thieves most frequently operate, their activity has taken on such proportions globally that many countries have established special police units to investigate and combat it. The FBI established an art crime team in 2004, responsible for coordinating investigations throughout the country. The team also works worldwide in cooperation with legal attachés in United States embassies and with foreign law enforcement agencies. Art crime units are also well established in many European countries, but are less common in Latin America.

Recovering stolen art is a daunting challenge. Once valuable pieces are taken, the thefts quickly become public through the ALR and the media. Interpol and law enforcement agencies all over the world are alerted. As a result, the works often simply disappear, being kept underground for years until the search for them has ended. Alternatively, paintings are sometimes stolen as part of a scheme to defraud insurance companies. In these cases, the owners have no interest in the paintings being found.

Despite these unfavorable odds, however, good investigative work can pay off. One evening, shortly after Christmas of 2002, I received a call from an insurance company requesting that we investigate the theft from a private residence in Naples, Florida of Claude Monet’s Vetheuil Vu de L’Ile Saint Martin, painted in 1880, and Auguste Renoir’s 1875 masterpiece, Place de la Trinité. The insurers had offered the owners a cash settlement – the two paintings had been insured for US$7.1 million – but the owners preferred that the company seek their recovery. In addition to the paintings, the thieves had also stolen some valuable watches.

Initially, everyone was a suspect, from the domestic workers at the multi-million dollar mansion to the owners’ own children – anyone who conceivably could have had access to the home when the owners were not there and the alarm not set. But the investigation soon took a different tack when a state parole officer in Miami was tipped off by a parolee that two disreputable figures on the street were claiming to have valuable watches and paintings for sale.

This revelation set into motion a sting operation involving Kroll investigators, the FBI, and local police. A police officer posed as a bookie interested in the stolen watches. In the process, he established that the thieves were also in possession of the stolen Monet and Renoir. A Kroll investigator posed as a businessman interested in buying artwork. As the trap was set, the thieves changed the meeting place at the last minute because they feared that they were being set up by other thieves. They did not suspect law enforcement was involved.

Finally, during a tension-filled night just two months after the theft of the paintings, we confirmed where the thieves were hiding them and, in an elaborate set-up including the supposed buyer, the police, and the FBI, they were recovered unharmed.

While in other countries art theft is often associated with organized crime, in the United States this is usually not the case. According to the FBI, those stealing art often do not know its value. This was the case in the Naples heist. The thieves saw the paintings hanging in the residence and thought they were “nice” and might be worth “good money.” Only after word spread that two very valuable paintings had been stolen did the criminals realize what they had. Even then, they were ready to sell the pieces for US$1 million; far less than their insured value.

The Naples theft, though, was sadly unusual in its rapid discovery and resolution. One year ago, I began investigating another case, involving the theft of a painting from a private property in Italy. The criminals had replaced it with a reproduction. Although the fake was not particularly well done, the theft was not discovered for a variety of reasons until about one year after the fact. I was asked to become involved four more years after that and, although we have uncovered several leads, a happy ending – as in most art theft cases – remains as distant and elusive as it did twelve months ago. Still, the recent bust in Hradec Králové brings hope that a breakthrough may be just around the corner.

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Marlinda Simon is an associate managing director of Business Intelligence and Investigations in Kroll’s Miami office. A former member of the South African Intelligence Service, Marlinda manages complex investigations involving fraud, competitive intelligence, counterfeiting, art theft recovery and a variety of criminal threats against companies, banks and individuals throughout Latin America and the Caribbean.

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