Seven-year sentence for La Canada woman in federal fraud case

From Thom Mrozek:

LOS ANGELES - A La Cañada woman who sold fake art - including works purported to be by Picasso, Dali and Chagall - through a rigged televised art auction has been sentenced to 84 months in federal prison.

Kristine Eubanks, 52, was sentenced late yesterday by United States District Judge Gary A. Feess, who said that the fraud scheme was "audacious in its scope" and "blatantly illegal."

The scam, run through a company called Fine Art Treasures Gallery, falsely told customers that art sold on the company's television show had been found at "estate liquidations all over the world." Instead, Eubanks and others sold fake and forged art that they had bought from suppliers, as well as forgeries they had printed themselves and signed on behalf of the artists. The scam brought in well over $20 million from more than 10,000 victims across the country.

Eubanks pleaded guilty in April 2007 to conspiracy to commit mail fraud, wire fraud, interstate transportation of stolen property and to filing a false income tax return. Through this company, Eubanks and her conspirators operated an art auction television show, which aired on Friday and Saturday nights on DirecTV and The Dish Network, and sold art to customers around the United States. Eubanks and her husband, Gerald Sullivan, ran the scheme from 2002 through 2006.

Eubanks admitted that she obtained fake art from various suppliers, and printed other art works in her own printing shop, and sold that bogus art on the auction as genuine. Eubanks and others forged signatures on some of the works, including purported lithographs from Picasso, Chagall and Dali. To support the scam, Eubanks also forged Certificates of Authenticity for certain pieces and provided falsified appraisals for some of the jewelry that was sold to customers. Eubanks and others also rigged the bidding for the auction process by arranging for fake bids to be announced on the program to falsely drive up prices for the art they sold to the public.

Eubanks' husband, Gerald Sullivan, 54, previously pleaded guilty to conspiracy to commit wire fraud and interstate transportation of stolen property. He is scheduled to be sentenced by Judge Feess on May 24, at which time he faces a statutory maximum sentence of six years in federal prison.

As part of the investigation into Fine Arts, federal authorities seized approximately $3.8 million from bank accounts controlled by Eubanks and Sullivan. Those funds have been forfeited to the government, which is in the process of notifying thousands of potential victims that they may have purchased bogus artworks.

This case was investigated by the national Art Crime Team at the Federal Bureau of Investigation, IRS-Criminal Investigation, and the Los Angeles Police Department's Art Theft Detail.