The most titillating thing about the opaque and exclusive world of art collecting is not the auction prices, though they are bafflingly high, nor the headline-making artists selling stuffed sharks and silver bunnies for millions, though they are just as shocking. Rather, the art world lives for grisly tales of fakes, forgeries, and the billionaire collectors who buy them.

There seems to be no end in sight for the sale of fake art, or the insatiable thirst of collectors who get duped. Over the last few months, the lawsuit between the foundation representing the artist Robert Indiana and his longtime publisher was back in the news, as were the stories of an art-world rising star caught selling forged Raymond Pettibon paintings, and an established dealer convicted of selling fake Richard Hambleton art after going to great lengths to establish each painting’s pedigree with elaborate backstories.

This is to say nothing of the digital world of art, where non-fungible tokens (NFTs) have opened up previously unimaginable possibilities for art fraud. The past year has marked a dramatic rise in so-called NFT theft—forged or plagiarized art minted as an NFT and sold to buyers who don’t know any better. (This latest trend is especially ironic given the original selling point of NFTs for the art world: foolproof provenance. As people are now realizing, this only works if the minted art is what it claims to be.)

Maria Konnikova, an expert on the art of the con and author of the poker memoir The Biggest Bluff, puts it this way in an interview with The New York Times: “Fraud really thrives in moments of great social change and transition. We’re in the midst of a technological revolution. People lose their frame of reference for what can and can’t be real.”

The most perplexing riddle in this buying frenzy is how and why sophisticated art collectors who have made their fortunes based on laser-focused due diligence are suddenly falling prey to the very obviously too-good-to-be-true work of pedigreed galleries and blue-chip auction houses.

I got some answers while investigating the infamous fall of the 165-year-old Knoedler Gallery, in New York, for the documentary Made You Look. Owned by Michael Hammer, the permanently tanned scion of the Armand Hammer fortune and father to Armie, the scandal-plagued former actor, the gallery was run by veteran dealer Ann Freedman. Over 14 years, Freedman brokered the sale of 40 fakes for nearly $80 million to a Who’s Who of players including Belgian hedge-fund manager Pierre Lagrange, Goldman Sachs executive Jack Levy, and Domenico De Sole, chairman of Tom Ford International—and former chairman of Sotheby’s.

Knoedler’s Ann Freedman leaves a New York courtroom after the day’s proceedings in Domenico De Sole’s case against the gallery, 2016.

The sordid drama included an explosive trial initiated by De Sole, who spent $8.3 million on a fake Rothko sold to him by Freedman. De Sole was intent on his pound of flesh, and he got it, suing for $25 million. (By this time, Freedman had been forced out of Knoedler, and the gallery had shuttered. The case settled for an undisclosed amount.) Interestingly, De Sole gave the fake Rothko to his daughter in New York.

Yet despite the stack of fakes sold by Knoedler, only 10 victims sued. Most who were duped took the loss and chose to remain anonymous.

One would think that the Knoedler debacle, which made worldwide headlines with the De Sole trial, would either dissuade or forearm sophisticated collectors from buying art without bulletproof provenance, or, at the very least, questioning every bit of information about an artwork. So why are fakes and forgeries here to stay—and why is 2022 already shaping up to be the biggest year ever for the forgery market?

A Perfect Art-Fraud Storm

Today more than ever we live in a world where greed and the quest for status reign supreme. Add to that the increased wealth of 1-percenters cum art collectors; the surprisingly static, unregulated art world, in which collectors can use art as a form of currency and tax evasion; and the rise of unscrupulous art consultants who blindly advise their clients on acquisitions and bank hefty commissions without exercising due diligence, and you have a perfect art-fraud storm.

(The Art Newspaper’s Scott Reyburn called it “buying with your ears,” writing, “That’s the phrase art-world insiders use to describe the way some newbie collectors slavishly acquire works by names everyone else is talking about at any given moment in the cultural fashion cycle.”)

Forgers are poised to exploit the massive amount of wealth that is fueling the race to acquire art at any cost. In just 12 months, the 10 richest billionaires added $402.17 billion to their net worth. They were led by Tesla C.E.O. Elon Musk, who last year became the world’s richest man, with a net worth of $300 billion.

Musk is as captivated by art as he is by technology. He invited graffiti artists to cover his new factory in Germany in the hope of making the factory “a jewel of Brandenburg,” and he partnered with Japanese billionaire art collector Yusaku Maezawa (who catapulted into the limelight in 2016, when he bought a 1982 work by Jean-Michel Basquiat for $57.3 million) in a plan to invite artists aboard one of Musk’s space shuttles. Last year, Musk’s former girlfriend, Grimes, made $5.8 million in just minutes selling NFT art at auction.

The blur of galleries that have rushed to open in Palm Beach, East Hampton, and Aspen reflects dealers’ thirst to reach groups of super-high-net-worth individuals who spent the worst of the pandemic outside the city. Any time I visit the galleries in Palm Beach and East Hampton, much of the art on the walls is already sold. One dealer told me, “It’s a complete frenzy to cover our walls now.”

This does not mean that these galleries are selling forgeries, of course, but it does set the market for the eager super-rich who are buying without looking too closely at the seller—or the art.

On a recent trip to Abu Dhabi, I toured the stunning Louvre, jam-packed with the art world’s greatest hits. I was reminded of the extraordinary wealth that exists in the Middle East, and the record demand for art that accompanies it.

In 2015, $179 million was paid for Pablo Picasso’s 1955 piece Women of Algiers. The buyer was thought to be former Qatari prime minister Hamad bin Jassim bin Jaber Al Thani. That same year, allegedly, a buyer in Qatar paid $300 million for a Paul Gauguin painting.

“Fraud really thrives in moments of great social change and transition.... People lose their frame of reference for what can and can’t be real.”

Then, in 2017, someone got some bad advice. Christie’s sold a 500-year-old Leonardo, Salvator Mundi, amid a 20-minute bidding war that came down to two international bidders, with the increments jumping at one point from $332 million to $350 million in one bid and then, at barely 18 minutes, from $370 million to $400 million in a wave of gasps. The winning bid, as is now well known, was $450 million, from the crown prince of Saudi Arabia, Mohammed bin Salman. The only problem is that the painting appears to not be 100 percent authentic, and the Louvre refused to display it, reportedly after experts could not authenticate the artwork.

Today, the painting can allegedly be found on bin Salman’s $500 million yacht, Serene. One should note that the original price paid for the “Leonardo” was $72, and the work was later flipped by Yves Bouvier, who sold the piece for $127.5 million shortly after acquiring it for $83 million.

The super-rich love building huge and impressive collections, often housed in custom-built personal galleries. This has created an industry of art consultants who fiercely compete to find and acquire art for their clients. With that comes the excitement of a discovery of never-before-offered art, such as the plethora of Knoedler fakes. (The consultant working for De Sole who signed off on the fake Rothko said the painting was a “must-have.”)

The market is set for the eager super-rich who are buying without looking too closely at the seller—or the art.

And the practice of many collectors to use art as currency or tax-evasion tool is on the rise. Some collectors borrow against the value of their art to get ample cash without having to sell, which avoids their having to pay capital gains. Others send their art to free ports (free-trade zones that are tax-exempt) in places like Geneva and Luxembourg, where it can be stored free of sales and use tax.

It’s also possible to resell art directly from a free port to another collector without paying taxes. And free ports can hide the true provenance of paintings, as collectors and buyers rarely visit the art they bought. These secure, highly guarded locations can be used by art dealers to trade stolen, looted, or forged objects.

Coincidentally, the Swiss government holds the majority stake of the Geneva Free Port, the country’s oldest free port (where Bouvier’s company was the largest tenant), with reported art holdings of $100 billion belonging to anonymous art collectors. Free-port holdings have been described as the “greatest art collection that nobody gets to see”—and by others as a cesspool for art crime.

Wealthy collectors might also get a gallery to hype up the price of an artwork dramatically, then donate the piece to a museum and get a massive tax write-off. This practice is keenly satirized in the series Billions, where the sleazy hedge-fund-mogul protagonist, played by Damian Lewis, pretends to move his art from a free port to his home, and, to avoid paying taxes, turns the luxury Manhattan penthouse into a museum.

Given all of this, it’s no mystery that the market for forgeries and fakes is at an all-time high. The real mystery is how no one is seeing through it.

Barry Avrich is a Toronto-based documentary filmmaker whose work includes Blurred Lines: Inside the Art World, Prosecuting Evil: The Extraordinary World of Ben Ferencz, and The Reckoning: Hollywood’s Worst Kept Secret. His latest film, Made You Look: A True Story of Fake Art, is in development as a scripted series