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Tags: Stored | Art | vaults | paintings

Is Your Stored Art Where You Think It Is?

By    |   Friday, 11 July 2014 02:43 PM EDT

Investors often store in warehouse or bank vaults paintings valued at more than $1,000,000 to protect them from being damaged or stolen. Because unscrupulous outsiders who learn the whereabouts of priceless objects often plot to steal them, some collectors hang replicas or less valuable art in their homes so they can travel or sleep without worry, but their vaulted art is not always protected! 
Rather than storing masterworks in warehouses, most collectors prefer to use large walk-in bank vaults for safety reasons. Bank security generally is high tech and thorough. Banks do not hire guards without background checks. Warehouses commonly hire ex-convicts and do not require employees to provide extensive background information.
A walk-in bank vault is camera surveyed, locked with two to three keys, and cannot be accessed without secret codes, the presentation of proper identification and sign-ins and sign-outs. A bank officer usually accompanies a person to and from a vault. Unlike warehouses, few people walk past bank vault areas. Banks are not meeting places where dealers, middlemen, and other collectors commonly congregate. 
Art warehouses are accessible to almost anyone because front desk clerks are often lax and disinterested about what is going on around them. A little charm and a nice smile usually gets a person past a front desk and into a warehouse vault area. 
In 2000, I walked into a famous Manhattan art warehouse, told a receptionist who I was and where I wanted to go and the woman allowed me to enter vault rooms without asking to see identification. I walked down hallways past millions of dollars worth of uncrated art and went into a vault to see two canvases worth $3,000,000 and no one watched what I was doing. A thief, vandal, or someone who switches replicas for masterworks would have easy access. That warehouse’s security was awful.
During the last few years, some grim reaper art dealers have placed replicas and forgeries in New York City, Los Angeles and Geneva warehouses to commit insurance fraud. They insure bogus art at authentic painting values and set up heists to collect insurance.
Geneva insurance investigators have watched the actions of a Los Angeles based art dealer (who also works out of Belgium) pull off many warehouse scams. The dealer is the “darling” of Hollywood celebrities and travels with millionaires. He is known to have set up successful warehouse robberies, but he is so devious and sleazy no one has been able to make criminal charges stick. It is estimated that the culprit has stolen from himself over $20m worth of art in order to collect insurance and it is suspected he has sold stolen authentic masterworks to devious co-conspirators in Europe and America for another $10 to $20m.
One insurance investigator claims the dealer goes into others' warehouse vaults and switches exact forged copies for priceless art. Not only does this dealer have warehouse insiders on his payroll, they allegedly help him commit crimes.
Most of the duped have no idea their masterworks have been switched for counterfeits. They may or may not ever realize they have been robbed. This cagey swindler even replicates frames to look like the originals. His crimes would be more difficult to accomplish in a bank.
A famous art warehouse in Cambridge, Mass., reminds most people of a decrepit damp castle. Dusty, moist, moldy floors are in dank vault rooms that are lit by single hanging bulbs and their heavy steel doors with squeaky lift bars are not conducive areas for fine art. The front desk security is tight but the rotten smell of mold and mildew comes from vault rooms that are not climate controlled. No one should place a masterwork in these conditions.
During the 1970s a man decided to “clean out” his warehouse vault room of items he had inherited. He was tired of paying semi-annual fees for the space and decided he would sell the art and buy a summer home. He had placed in a large walk-in vault room over 300 framed works on paper and 40 oil paintings by 19th-century American artists, then he closed and locked the vault’s door and did not return for a decade.
To his dismay, bugs, rats and mice had eaten through most of the moldy, rippled works on paper and canvases had been water-damaged after being surrounded by wet walls and a leaky, dripping ceiling. The man walked out of the warehouse with three paintings worth less than $4,000. Not only did he have no insurance to cover the damage, his own stupidity and lack of interest played a major role in destroying the art.
Regardless of where art is stored, vault areas need to be checked every 3-6 months to make certain the areas are secure, clean, and climate controlled.
A dealer told me of a rich collector who had insured and placed in a Georgia warehouse during the late 1980s many irreplaceable paintings appraised for over $15,000,000. The man had purchased the paintings from dealers and claimed to have inherited four of them. He made certain the art was wrapped and placed in crates in a clean, climate-controlled vault room and that the warehouse was “like a fortress” of security.
Two years later, the man went to the vault to remove the crates because he wanted to sell some of the paintings and hang the rest. Without opening the crates, he thought everything was in order and signed a warehouse release form stating he had “removed any and all objects from the vault.”
A few days passed before a work crew at the collector’s home opened the crates and found them empty. The owner went berserk, accused the warehouse of stealing his valuable art collection, called a lawyer to sue and was rushed to a hospital with chest pains. In the meantime, the warehouse manager called the police, said the collector had threatened his life, confirmed the collector had taken the crates “days ago,” said nothing about stolen art and suspected an insurance scam.
The police asked the collector for a list describing the missing paintings. Without thinking, the man made a list and claimed three of the stolen paintings had come from his father’s estate and had been willed to his brother. When the brother learned of this, he sued the collector, claiming the collector had robbed him of inherited paintings worth millions. The collector’s insurance company refused to pay loss damages, sued the collector for restitution and claimed the arts’ titles belonged to the company. 
The police suspected the collector had stolen $15,000,000 worth of art from himself, but they did not have evidence to indict. To this day, no one (other than the thief) knows the whereabouts of the warehoused art or who masterminded the robbery. Because warehouse security was rigid, either an insider helped the collector rob himself or the collector had no clue that thieves emptied the crates prior to his opening them.   
Those who crate and store masterworks in residential or corporate basement vaults should take the same precautions as a person storing art in a bank or warehouse. Make certain the art is not spread throughout a basement. Masterworks crated in a basement are relatively easy for thieves to remove. Boxes or crates containing art can be switched for empty ones and can go undetected for years.
Unless crates and boxes are opened frequently to check contents, a collector does not know for sure if a robbery has taken place. If a person insists upon storing masterworks in a basement room, it should be alarmed 24 hours a day and that alarm should be separate from the building’s main alarm system.
Patricia Jobe Pierce is a freelance writer, art historian, art dealer-consultant, certified AAA appraiser, public speaker, photographer and American art authenticator for museums, auction houses and collectors. She graduated from Boston University with a BFA in 1965, is owner and director of Pierce Galleries, Inc. in Nantucket and Hingham, Mass., and is author of many works, including, "Art Collecting & Investing: The Inner Workings and the Underbelly of the Art World." For more of her submissions, Click Here Now.

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Investors often store in warehouse or bank vaults paintings valued at more than $1,000,000 to protect them from being damaged or stolen.
Stored, Art, vaults, paintings
Friday, 11 July 2014 02:43 PM
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