3/05/2015

Downsizing


Kiplinger recently published an article on downsizing and getting rid of "stuff".  It has many of the basic methods such as estate sales, eBay, auctions etc. and also notes using an appraiser. It mentions ISA, AAA and ASA. It also notes fees, typically in the range of $125,00 to $300.00 an hour. It also touches on the current state of the market through comments by appraiser and estate sales reps.

Kiplinger reports
Maybe you’re downsizing from a sprawling house in the suburbs to a downtown condo. Perhaps a parent is moving to a retirement community, and you and your siblings are excavating the family home. Or maybe you’re just plain tired of having too much stuff. Whatever the reason, having fewer possessions can simplify your life and put some cash in your pocket. But doing it the right way requires patience and possibly help from the pros.

What’s the right way? That depends on how many belongings you have, your timeline and how much of the work you’re willing to do on your own. For large-scale downsizing, estate-sale and auction professionals can help sift through your stuff, estimate its value and sell it for a good price. If you have a number of valuable items to sell but not enough to warrant a large sale (or if you want a shot at selling things that didn’t go in the first attempt), consider consignment shops and Web sites such as eBay. And don’t forget charitable donations, which can reward your generosity with a tax deduction.

If you’re selling or donating items of significant value—or if you’re not sure whether they’re valuable—call in an appraiser. At www.appraisers.org, you can search for accredited personal-property appraisers by location and specialty. Fees vary by region and by the appraiser’s accreditation level but may range from $125 to $300 per hour. Or an estate-sale or auction company that you hire may have qualified appraisers on staff. Ask appraisers about their credentials (such as accreditation from the American Society of Appraisers, the International Society of Appraisers or the Appraisers Association of America) and how long they’ve conducted appraisals.

Invite family members to take anything you’re willing to give away. For those who aren’t in your region, you could post photographs of items online with a tool that everyone can access, such as Dropbox, suggests Mary Kay Buysse, executive director of the National Association of Senior Move Managers. Don’t overlook items that may have sentimental value. “A lot of times, it’s the grandchildren who want Grandmother’s apron or her china set,” says Victoria Roberts, a certified professional organizer and owner of Victoria Roberts Organizing, in Mill Valley, Calif. But in your enthusiasm to clean house, don’t foist leftovers on those who don’t show interest. Chances are, they’ll sneak it into the trash (or sell it themselves) when you’re not looking.

Selling a lot of stuff

Temper your expectations about how valuable your old furnishings may be. Preferences for furniture and decor, especially among younger families, have shifted from traditional and antique to modern—and easy to transport (think Ikea or Crate and Barrel’s CB2). Heavy, dark furniture is flooding the market as more people downsize, and the supply is outpacing demand. Flat-screen TVs and digital music are making entertainment centers obsolete, and dining suites are disappearing along with formal dining rooms.

“I’m in the position of telling people that the market for their wonderful furniture isn’t what it was 10 or 20 years ago,” says Kathleen Orozco, owner of appraisal and estate-liquidation firm Kathleen Orozco & Associates, in Denver. “The buyers aren’t there.”

Despite the challenges, you can find a good home for your castoffs—and cash in on some of them, too.

Host an estate sale. If you have a houseful of items to sell that add up to several thousand dollars in value, hosting buyers in your home through an estate sale is a prime option. Ideally, you’ll have plenty of time to choose a company and have the liquidator prepare your home and belongings for a sale. But if you’re on a tight deadline, a pro should be able to help you wrap it up quickly.

Keep in mind that if your possessions aren’t worth at least, say, $10,000, a company may not agree to hold your sale. And estate liquidators take a sizable chunk of the proceeds—typically about 35% to 40%, says Julie Hall, director of the American Society of Estate Liquidators. But they will also take a lot of the work off your hands. They often have connections with local, regular buyers of antiques and other items to whom they can advertise your goods (and they’ll promote your sale to the general public, too). They’ll price items and set them up in your home in a way that’s attractive and that avoids bumps and breakage as buyers pass through. And a staff present during the sale can control crowds, run the cashier stand and keep an eye out for thieves. “An estate sale is not a glorified yard sale,” says Hall. “There’s a lot of sweat equity.”

Although many antiques, carpets and furniture aren’t the draw they once were, they may have a better chance of selling from your house than from other venues because buyers can more easily visualize them in their own homes, says Orozco. Utilitarian items such as tools and kitchen supplies often appeal to buyers. If having the sale in your home isn’t realistic—say, because you’ve sold the home and are in a rush to remove the items—look for a company that will take away the goods to sell them.

You can look for an estate liquidator at www.aselonline.com and www.estatesales.net, or ask for referrals from a professional organizer or real estate agent. Select at least three companies to invite for a walk-through of your home, and ask about credentials and training (such as for appraisals) and any required licensing in your area, as well as for references.

Check with the Better Business Bureau as well as consumer review sites such as Angie’s List for a history of serious complaints. Ask whether there are additional fees beyond the standard cut, such as for advertising, cleanup or appraisal. If you have time, attend a sale to see how a liquidator runs the show. And plan not to be at home during the sale, lest you cringe at the sight of strangers rummaging through your stuff.

The auction option. The estate-sale company might send valuable unsold items to auction, especially if they’re likely to be more popular in a different region. Or you can send them to auction yourself.

Auctions come with both the potential upside of a higher price than expected and the possible downside of a disappointingly low price. Often an auction service comes to your home and takes items to a gallery to sell along with other goods. If you have enough high-value items, an auctioneer may have an off-site sale exclusively of your items or host an auction at your residence (especially if you are selling the house along with all of its contents). As with an estate sale, you’ll likely need several thousand dollars’ worth of items to justify a sale from your home.

The fee to sell at auction varies depending on where you are and how the sale is conducted. Generally, the higher the value of items being sold, the lower the commission, says Tim Luke, an auctioneer and valuation expert with TreasureQuest Group. Commissions that auctioneers charge commonly range from 10% to 25% of the “hammer price” but may be as high as 50%. Plus, there may be fees for transportation, storage or marketing.

Ask for referrals to a good auction service, or comb local listings. At www.auctioneers.org, you can search for an auctioneer by location, specialty and professional designation. A Graduate Personal Property Appraiser has completed classwork to conduct appraisals and keeps up to date with continuing education; a Master Personal Property Appraiser has had more-advanced training. Interview several candidates, check reviews and licensing, and compare fees. Once you’ve chosen a service, a representative will outline the structure of the sale with you. If you can’t stand to see certain items sell for less than a minimum price, they can be sold with a “reserve price”—if they don’t capture a specified minimum bid, they don’t sell.

Smaller-scale solutions

If you have a handful of valuable items to sell, you could try parceling them out online. Lynn Dralle, who runs www.thequeenofauctions.com and makes a living reselling antiques and other items on eBay, says that high-end, brand-name products tend to do well on eBay. Popular items have ranged from china and flatware to old toys and perfume bottles, but to grab good prices they have to be sought-after types or brands.

To get a sense of potential moneymakers you may have on hand, search the listings of sold items on eBay. Click on “Advanced” in the upper-right corner at www.ebay.com and enter keywords such as the brand name and type of item. Check the box for “Sold listings” and click “Search” to find final selling prices. They’ll help you decide whether an item is worth posting and what price you might expect to capture.

EBay takes a 10% cut of your sale (unless you have an eBay Store), and PayPal takes 2.9% plus 30 cents per domestic transaction (up to $3,000 a month) to process payments. Plus, you’ll want to estimate how much to charge a buyer for shipping. You can use tools on the Web sites of the U.S. Postal Service, UPS and FedEx to estimate shipping prices. Dralle recommends choosing the maximum price you might pay to ship an item across the country and listing it as your domestic shipping rate.

Posting and selling household goods on Craigslist is free, but you’re limiting your audience to locals. Lower-value goods and bulky ones that you’d rather not ship are good candidates for Craigslist because buyers can come to you to pick them up. Holding a yard sale may also be worthwhile for unloading those items.

Consignment shops are a brick-and-mortar alternative for selling high-quality furniture, antiques, clothing and other items. Typically, a shop will display your goods on the floor for 30 to 90 days, and it may discount the asking price as time passes. Stores take a cut of about half of the price of anything that sells, but you won’t have to put in the effort of trying to peddle it yourself. Call local shops to ask about their policies as well as what types of items tend to sell well and which aren’t worth the effort.

Donate it

Giving belongings that are in good condition to charity can save you the hassle of trying to sell them, if you don’t mind forgoing the cash. (Donating is also a good way to unload items that didn’t find a home at sale.) Thrift shops, such as Goodwill and Salvation Army stores and local operations, will take a variety of household items, furnishings and clothing. Call or go online to find out which items they don’t want (for example, used computer equipment, TVs and ratty or scuffed furniture) and to see if they will pick up your donations from your home.

If you have anything with cultural or historic value—say, an artifact from the Civil War—a local museum or historic house may be happy to take it off your hands. Churches may be able to use certain items, too. If you itemize deductions on your tax return, don’t forget to get a receipt for each batch of goods you donate; it’s up to you to attach a list of the items to the receipt. You can calculate their fair market value, on which tax deductions for noncash donations are based, by using prices on resale sites (such as eBay’s listing of sold items), the Salvation Army’s donation guide, or Intuit's free “ItsDeductible” program. You’ll have to provide a description of noncash donations that exceed $500 in value on Form 8323. Items worth more than $5,000 require an appraisal.

Deal with emotional baggage

It can be difficult to let go of belongings with sentimental value. Your collection of books may represent years of personal development. Gifts you’ve received are associated with friends and family. Use these tips to stay focused.

Compose a mission statement. Victoria Roberts, a certified professional organizer in Mill Valley, Calif., suggests writing down a goal that you can reread when the going gets tough. It can also help you resist the temptation to rent a storage unit to stash things you are having trouble discarding. Unless you’re saving something for a designated reason—say, a grandchild who has claimed a bedroom set but won’t have space for a few more months—storage units are usually a waste of money and delay an inevitable decision.

Enlist help. Someone with no vested interest in your stuff can push you to keep only the worthwhile items. She may also be able to neutralize family tension or squabbles. And for elderly folks with physical limitations, an assistant can help with lifting and moving. If you’re using a liquidation company or a senior move manager, its reps may help you sort the clutter. Or hire a professional organizer (ask for referrals, or find one at www.napo.net). An organizer may charge $30 to $80 an hour or by the project. Even if you decide not to pay someone to assist you, try making it a social event by bringing in friends and family. They can help make a tedious process fun. Just be sure to plan your strategy if family members want the same item.

Scope out the new place. If you’re moving, get a floor plan of your new home, and measure the door frames and windows. That will help you let go of things that won’t fit. For a stronger visualization, use masking tape to outline the dimensions of rooms in your new home on the floor of your current home.

Keep only what you love most. If you need to get rid of, say, a large collection, hang on to a couple of your most cherished items as keepsakes, suggests Lauri Ward, home design expert and president of Redecorate.com. She advises keeping only the best, most loved and most used items. “Liking something isn’t enough,” she says. (Take digital photos of what you discard to help you remember it.) Do away with anything that’s worn or outdated, unless it holds strong sentimental value. Your new home should feel fresh.
Source: Kiplinger 

3/04/2015

More on Sotheby's


Skate's reviewed the recent financial data released by Sotheby's and the news is not good.  The main issues appear to be that while sales increased both private sales and margins failed to grow. Keep in mind private sales of just a year or two ago were growing and becoming an important division for growth and profits within Sothebys.The Skate's article states Sotheby's is making one mistake after another and includes small tactical issues as well as larger strategic ones.

Perhaps the worst part for Sotheby's is the final sentence, which states if 2nd quarter 2015 auctions are not strong, Sotheby's may become a takeover target.

Skate's reports
While Auction Sales Surge, Private Sales and Margins Decline – So Where Do the Economic Benefits Go?

Sotheby’s is making one mistake after another. From small things like factually inaccurate statements in their financial disclosures (such as the claim that “it is the only publicly traded investment opportunity in the art market”1, while in fact there are 17 companies including their rivals Chinese Poly and British Stanley Gibbons), to big ones like announcing that it will pay no dividends until the new CEO is in place (correctly countered by a large shareholder Mercato who failed to see the connection, for more see Skate’s coverage).

Sotheby’s is part of an oligopoly-like, high-end, art market structure where together with Christie’s it controls 94% of fine art auction sales of over $1m in value (apiece). In the current low interest rate environment with the real estate and stock markets at their peak, the art asset class enjoys sustainable capital inflows from all over the world making Sotheby’s for fine art what London and New York are for real estate: it just grows. Hence it comes as no surprise that Sotheby’s auction sales volume (GMV) grew to an all time high of $5.15bn in 2014, 18.7% above the 2013 levels and a staggering 35.2% up compared to 2012. However, the way the business is run is weak from an efficiency point of view. Share price is underperforming S&P 500, both net income and EBITDA are nearly flat if compared to GMV growth numbers. Quite contrary to the oligopolistic nature of Sotheby’s market structure, its margins are in a continuous and steady decline, specifically the net auction margin which shrunk by 20% (from 18.3% to 14.7%) over the last five years declining in each of those five years.

While margins decline was the known trend, collapse in private sales came as a surprise – Sotheby’s 2014 private sales have almost halved ($0.62 billion in 2014 versus $1.18 billion in 2013) going below 2011 level. Large and growing share of private sales was always seen the reason for average margins decline given lower commission intake level for private sales than for auction sales. In 2014 auction volumes went significantly up, private sales declined (with private sales being just 11% of auction sales in 2014 versus 25% in 2013), and nevertheless margins went down again: 27.3% EBITDA margin in 2014 versus 28.7% in 2013).

With all profitability metrics heading south, no wonder Mr. Ruprecht was ousted. (Note that Mr. Murphy, his peer at Christie’s, was let go as well).

The big question is: Where does the economic benefit (from this notable surge in art trade) go if Sotheby’s is actually getting less per each million of artwork sold? The almost simultaneous departures of Sotheby’s and Christie’s CEOs are providing for circumstantial evidence that both firms’ shareholders also had this very same question to ask. So where does it go? On the surface, the answer is definitely ‘not to consumers’, as the commissions (transaction costs for Sotheby’s clients) remain notoriously high, with a recent hike in rates announced by Sotheby’s earlier this year (see Skate’s coverage for more).

Sotheby’s audit committee should take a closer look in the search for real answer, but Skate’s can offer an educated guess: the biggest beneficiaries are the auction guarantee providers (pocketing significant “overages”2) and a very small group of select consigners and frequent large bidders receiving rebates and special deals, often structured through private sales and other commercial arrangements. This ecosystem of Sotheby’s-selected, few and key counterparties have likely seen a lot of economic benefit from the surge in art trading volumes, the skyrocketing of hammer prices (well above guaranteed levels) and of the overall lack of transparency and rationality in art asset pricing. As Sotheby’s explains on page 4 of its 10K 2014 filing: “the counterparties to Sotheby’s auction guarantee risk and reward arrangements are typically major international art dealers or major art collectors”. This handpicked old boys network is where Sotheby’s and Christie’s shareholders should look for the missing margins, Skate’s is happy to help with forensic if necessary :)

While both Sotheby’s and Christie’s shareholders might have their strong reasons to replace their CEOs, they would have to either keep old boys network in the game, reinvent the business model or face the disastrous lack of a sell-through. Given the consignments lead time and the timing of leadership changes, Q4 of this year is going to bring the judgment day, however already May / June auctions should bring in some clues.

Should Q2 auctions flop, Sotheby’s share price will collapse and it will become a formidable takeover target…
Source: Skate's 

3/03/2015

Art Fraud News


Several news organizations, including Bloomberg, the Financial Times and The Telegraph, are reporting that a Swiss businessman who runs several warehouses for fine art was arrested in Monaco on charges of art fraud.   According to the Bloomberg report specific charges have not been released, but they appear to be associated with fraud and manipulation of prices.

Bloomberg reports
 A Swiss businessman who runs a network of warehouses for fine art and other treasures was arrested in Monaco this week as part of an investigation into allegations of art fraud, an official in the prosecutor’s office said.

Yves Bouvier is president of Fine Art Transports Natural Le Coultre SA, a Swiss-based company specializing in the storage and shipping of artworks. His clients include Russian billionaire Dmitry Rybolovlev, whose lawyer said in a statement he received information of “possible fraud and manipulation of prices in the art market by Mr. Bouvier and his accomplices.”

The official for the prosecutor’s office declined to detail the investigation or reason for his arrest. She asked not to be identified by name, citing office policy.

Bouvier denied “all responsibility” and said that Rybolovlev’s allegations are based on “imaginary maneuvers,” in a statement from his lawyers provided by his company. His lawyers claimed in the statement that Rybolovlev’s allegations were probably motivated by his expensive divorce settlement.

A Swiss court in May, 2014 awarded Rybolovlev’s ex-wife, Elena Rybolovleva, more than 4.02 billion Swiss francs ($4.22 billion) in what her lawyer said was probably the largest amount ever in a divorce case in Switzerland.

‘Fraudulent Scheme’

Rybolovlev is worth $10 billion, making him Russia’s 11th richest person, according to the Bloomberg Billionaires index. He made his fortune selling stakes in Russian fertilizer producers Silvinit OJSC and Uralkali PJSC. In addition to the French soccer team AS Monaco, Rybolovlev owns works by artists including Amedeo Modigliani and Pablo Picasso. He’s worked with Bouvier for over a decade, according to Tetiana Bersheda, the lawyer.

“The scope and all the victims of the fraudulent scheme created by Mr. Bouvier have not yet been identified,” Bersheda said in the statement. The Rybolovlev family trusts the investigators will “provide more transparency on the world art market and enhance its good practices.”

Natural Le Coultre operates a 22,000 square-meter facility in Geneva where the world’s rich can discreetly store their valuable artwork, jewelery, vintage cars and other valuables. It also owns so-called freeports in Luxembourg, Monaco and Singapore.

The Telegraph in London reported the arrest earlier.
Source:  Bloomberg


3/02/2015

Sotheby's 2014 Financial Results


Sotheby's released its 2014 financial results and the results did not been Wall Street expectations. The Wall Street Journal and the Financial Times reported that earnings dropped 18.5% in the important fourth quarter due to higher expenses.

The Financial Times reported on the earnings
Sotheby’s earnings tumbled 18.5 per cent in the fourth quarter due to higher expenses, amid ongoing boardroom turmoil and the second public attack on the company from an activist investor in less than a year.

Shares fell by as much as 6.5 per cent in early trading on Monday after the auction house reported weaker-than-expected fourth-quarter earnings, taking a $7.5m charge related to the December announcement that chief executive Bill Ruprecht would be stepping down.

For the three months to the end of 2014, revenues rose a better-than-expected 3.5 per cent to $351.2m. Net income fell 18.5 per cent to $73.9m or $1.07 per share, compared with a year-earlier profit of $90.8m or $1.30 per share. The market had forecast sales of $338m and adjusted net income of $86.78m, or $1.28 a share. Total expenses grew 14.4 per cent to $222.2m.

Sotheby’s reported record worldwide consolidated sales of $6.7bn for 2014, and last month hosted an impressionist and modern art sale that brought in its highest ever total for any auction held in London.

“Given the backdrop of Russian instability and questions surrounding Chinese growth, we could have seen some hesitance and reticence — in fact we saw the total opposite,” remarked Mr Ruprecht.

“There continues to be strong demand and commitment to acquiring great works of art. We had a remarkable 2014, with double-digit sales growth in many of Sotheby’s key categories. These successes highlight the incredible depth and breadth of Sotheby’s expertise and demonstrate our ability to deliver for our stakeholders.”

However, the New York-based auction house continues to come under attack from some of its largest shareholders. The latest results came just 10 days after a fresh campaign on the New York-based auction house led by Marcato, a San Francisco-based fund with a 9.5 per cent stake.
In a scathing letter to the board, Marcato chief executive Mick McGuire called for Sotheby’s to repurchase $500m in stock, after the company made the decision to freeze capital returns to shareholders while it searches for its new chief executive.

Mr McGuire also accused the board of “wilful neglect” and demanded the resignation of chief financial officer Patrick McClymont, calling for a replacement who “will serve the interests of shareholders rather than defend the misguided policies of the past”.
He has been particularly vocal about the company’s “unusually large cash balance”, which he is demanding be reduced in order to unlock further investment opportunities and better value for shareholders. Mr McGuire has estimated that the company has $851m in excess capital.

Daniel Loeb, Sotheby’s largest shareholder with a 9.6 per cent stake, last year mounted a blistering public campaign against the company, accusing it of failing to understand the art market and calling it “an old master painting in desperate need of restoration”.

A truce was reached only after Mr Loeb, known for his attempts to shake up companies including Dow Chemical and Yahoo, was given a board seat last May. In December Mr Ruprecht said he would step down from the helm after a successor had been found.

Last week Mr McGuire underscored his efforts to bring about change in the face of what he termed “roadblocks to good governance” by filing a motion seeking un-redacted documents relating the company’s settlement with Mr Loeb and his fund Third Point.

Shares in Sotheby’s have fallen 7.8 per cent over the past 12 months. By close of trading in New York shares were down 1.4 per cent at $43.34.
Source: Financial Times


3/01/2015

Stolen Picasso Discovered at FedEx


The Huffington Post and other media sites are reporting that a Picasso which was noted as being lost in 2001 was discovered as a $37.00 valued Christmas present and labeled as art craft at a FedEx center in Long Island City. The package originated in Belgium. The articel notes the work is valued at over $2.5 millioon.

The Huffington Post reports
A stolen Picasso painting which was considered lost for years has resurfaced in the United States, where it had been shipped under false pretenses as a $37 Christmas present labeled as “art craft." The 1911 painting, La Coiffeuse (The Hairdresser), was discovered in December in a FedEx shipment from Belgium to Long Island City.

The US attorney for the Eastern District of New York, Loretta Lynch, filed a civil forfeiture suit on Thursday, February 26 to return the painting to France. The work is owned by the French government.

The painting, worth millions of dollars, was stolen in Paris more than a decade ago, though the theft's exact date is unclear. It had been smuggled out of a storeroom at the Centre Georges Pompidou.

The canvas was last exhibited in Munich in 1998, and then returned to Paris, where it was placed in storage at the Paris museum. It wasn't until three years later, in 2001, when officials received a loan request for the cubist landmark, that the theft was noticed. Having searched the storerooms to no avail, they declared the painting, then valued at more than $2.5 million, stolen, the New York Times reports.

An unknown person going by “Robert" shipped the painting on December 17 from an address in Belgium to a climate-controlled warehouse in Long Island City. The package was labeled as “art craft," with a stated value of $37 and complete with a Christmas card. The next day, the painting arrived at the Port of Newark and was seized.

Federal Customs and Border Protection officials examined the FedEx shipment and found the missing Picasso. They notified the Department of Homeland Security, and officials working from Long Island City, Queens, then took over.

There's no information on whether anyone has been arrested in connection with the shipment and the identity of the package's recipient has not been released.

French museum officials came to New York in January to examine the painting in person. Comparing it with historical records and photographs of the missing work, they confirmed that it was indeed La Coiffeuse.

Anthony Scandiffio, the deputy special agent in charge of Homeland Security Investigations who seized the painting, said in a statement, “The market to sell stolen antiquities in the United States is drying up."

A number of recent thefts from European museums have shown that robberies are often inside jobs committed by employees with access to invaluable artworks, manuscripts, and artifacts. (see Librarian Steals Priceless Documents from Russian Museum also Prosecutor Asks for Five-Year Suspended Prison Sentence for Picasso's Electrician Pierre Le Guennec). However, many cases remain unsolved for years (see Unsolved Art Heists: The Missing Paintings of Vincent van Gogh).
Source: Huffington Post


2/27/2015

Some Theories on the Gardner Heist


It has now been nearly 25 years since the theft of 12 works from the Isabella Steward Gardner Museum in Boston. With that the NY Times looks at some theories on the theft and what may have happened to some of the paintings.

The NY Times reports
BOSTON — The hallway in the Brooklyn warehouse was dark, the space cramped. But soon there was a flashlight beam, and I was staring at one of the most sought-after stolen masterpieces in the world: Rembrandt’s “Christ in the Storm on the Sea of Galilee.”

Or was I?

My tour guide that night in August 1997 was a rogue antiques dealer who had been under surveillance by the F.B.I. for asserting he could secure return of the painting — for a $5 million reward. I was a reporter at The Boston Herald, consumed like many people before me and since with finding the “Storm,” a seascape with Jesus and the Apostles, and 12 other works, including a Vermeer and a Manet, stolen in March 1990 from the Isabella Stewart Gardner Museum, a cherished institution here.

The theft was big news then and remains so today as it nears its 25th anniversary. The stolen works are valued at $500 million, making the robbery the largest art theft in American history.

Which explains why I found myself in Brooklyn, 200 miles from the scene of the crime, tracking yet another lead. My guide had phoned me suggesting he knew something of the robbery, and he had some street credibility because he was allied with a known two-time Rembrandt thief. He took me into a storage locker and flashed his light on the painting, specifically at the master’s signature, on the bottom right of the work, where it should have been, and abruptly ushered me out.

Call me Inspector Clouseau — I’ve been called worse in this matter, including a “criminal accomplice” by a noted Harvard law professor — but I felt certain I was feet from the real thing, that the Rembrandt, and perhaps all the stolen art, would soon be home. I wrote a front-page article about the furtive unveiling for The Herald — with a headline that bellowed “We’ve Seen It!” — and stood by for the happy ending.

It never came. Negotiations between investigators and the supposed art-nappers crumbled amid dislike and suspicion. Gardner officials did not dismiss my “viewing” out of hand, but the federal agents in charge back then portrayed me as a dupe. Eighteen years later, I still wonder whether what I saw that night was a masterpiece or a masterly effort to con an eager reporter.

Federal agents today continue to discount my warehouse viewing. (They say they have figured out the identity of my guide, but I promised him anonymity.) Still, the authorities are intrigued by some paint chips I also received in 1997 from people claiming to control the art. I wrote at the time that they were possibly from the Rembrandt, but the F.B.I. quickly announced that tests showed that they bore no relationship to the “Storm.”

In a recent interview, though, F.B.I. officials told me that the chips had been re-examined in 2003 by Hubert von Sonnenburg, a Vermeer expert who was chairman of painting conservation at the Metropolitan Museum of Art. (Mr. von Sonnenburg died the next year.)

His tests determined the chips were an exact match for a pigment known as “red lake” that was commonly used by the 17th-century Dutch master and had been used in the stolen Vermeer (“The Concert”). The crackling pattern on the chips was similar to that found on other Vermeers, Mr. von Sonnenburg concluded, according to the authorities.

Perplexed? Me, too.

Such have been the vicissitudes in my coverage of the case for nearly two decades, during which I have gathered hundreds of investigative documents and photos, interviewed scores of criminals and crackpots, and met with dozens of federal and municipal law enforcement officials and museum executives.

In 2011, I wrote a book about art theft with the Gardner’s chief of security, Anthony M. Amore. We omitted the Gardner case because Mr. Amore said the hunt had reached a delicate phase.

Four years later, his quarry remains elusive. But it turns out that the assumptions that he and the F.B.I. special agent now overseeing the case, Geoff Kelly, were forming then became their active theory of the heist. The short version: It was the handiwork of a bumbling confederation of Boston gangsters and out-of-state Mafia middlemen, many now long dead.

Admittedly, that is far less startling than other theories floated over the years, which attributed the theft to Vatican operatives, Irish Republican Army militants, Middle Eastern emirs and greedy billionaires. And new deductions pop up all the time, like those in a book due out this month that combines elements of the F.B.I. theory with a few twists.

Before I get into the theories, though, some background: The Gardner museum was created by Isabella Stewart Gardner, a wealthy Boston arts patron who amassed a world-class collection of paintings, sculptures, Asian and European antiquities, and curiosities like letters from Napoleon and Beethoven’s death mask. In 1903 she arranged her 2,500 or so treasures inside a just-finished Venetian-style palazzo that became her home and as well as a museum open to the public. Her memorable fiat was that upon her death (in 1924), not one item could be moved from the spot she had chosen to display it.

But after midnight on March 18, 1990, as St. Patrick’s Day festivities from the day before were winding down, her edict was broken. Two thieves dressed as Boston police officers persuaded a guard to let them in to investigate a “disturbance.” They handcuffed him and another watchman in the basement, duct-taped their wrists and faces and, for 81 minutes, brazenly and clumsily cut two Rembrandts from their frames, smashed glass cases holding other works, and made off with a valuable yet oddball haul.

It included the Rembrandts, Vermeer’s “Concert,” Manet’s “Chez Tortoni,” Degas sketches, a bronze-plated eagle, and a Shang dynasty vase secured to a table by a bulky metal device that by itself probably took 10 minutes to pull apart. Left behind were prizes like a Titian, some Sargents, Raphaels and Whistlers, and, inches from the Degas works, a Pietà sketch by Michelangelo.

Anyone who expected the art to appear rapidly on the black market or to be used for some kind of ransom was disappointed. Instead, there was dead silence. Seven years later, the museum raised its reward to $5 million from $1 million. After a quarter-century, empty frames still mark where the missing “Storm” and other works once were on display.

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Early on, investigators focused on Myles J. Connor Jr., a career Massachusetts art thief who, in 1975, had stolen a Rembrandt from the Museum of Fine Arts here and used it to bargain himself out of prison time. Mr. Connor himself came forward in 1997 with an associate, William P. Youngworth III, to say he had planned the Gardner heist. Though he had been in jail when it took place, Mr. Connor insisted it mirrored a scheme he devised in the 1980s. He said he had cased the museum with a fellow thief, telling him he wanted to own the Chinese vase that was so laboriously stolen.

Information from Mr. Connor and Mr. Youngworth ultimately led to my dark trip through that Brooklyn warehouse, and later to the puzzling paint chips. But when Mr. Connor left federal prison in 2005, he failed to produce the paintings and investigators have long ruled him out.

Even easier to dismiss was the notion that the Boston crime boss James (Whitey) Bulger was involved. Mr. Bulger was a predictable target for suspicion because of his decades of involvement in murders, drug running and funneling arms to the I.R.A. But there was nothing to connect him, the authorities say.

In a book due out this month, “Master Thieves,” Stephen Kurkjian, a Boston Globe reporter who has tracked the case as long as I have, says that another lifelong Boston crook, Louis Royce, dreamed up the robbery. Mr. Kurkjian interviewed Mr. Royce and quotes him as saying his criminal associates stole his idea. The investigators say Mr. Royce’s tale is unsupported by the evidence. In his book, Mr. Kurkjian says he provided other information to the investigators including a possible motive for the theft — to exchange the masterpieces for the release from prison of a Boston mob leader.

Anticipating a wave of interest, and possible criticism, on the eve of the robbery’s 25th anniversary, the investigators, Mr. Amore and Mr. Kelly, recently showed me a PowerPoint presentation that detailed their best sense of what happened.

Though the efficacy of their efforts remains unclear, Mr. Amore, who was hired by the Gardner in 2005, and Mr. Kelly, who has his own museum identification badge, have spent a decade sharing tips and chasing leads. In one peculiar instance, they said, they approached the producers of the television show “Monk” in the mid-2000s because a tipster spotted a painting that looked like “The Concert” in the background of a scene. The painting turned out to be only a copy used as a prop.

Mr. Amore and Mr. Kelly’s current theory dates to 1997, when informants told the F.B.I. that they had heard a midlevel mob associate and garage supervisor from Quincy, Mass., Carmello Merlino, talk about trading the stolen art for the $5 million reward.

In 1998, the F.B.I., as part of a sting, arrested Mr. Merlino and some associates on their way to an armored car depot and carrying heavy weapons, including grenades. Investigators said that they promised him leniency if he helped them find the art but that he denied knowing of its whereabouts.

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Several years later, Mr. Kelly and Mr. Amore said, informants drew their attention to two associates of Mr. Merlino, George A. Reissfelder and Leonard V. DiMuzio.

Mr. DiMuzio, who was shot to death in 1991, was a skillful burglar who had long been involved with the Merlino gang. The investigators say that Mr. Reissfelder, who died of an apparent drug overdose the same year, owned a 1986 red Dodge Daytona, the same model of car that several witnesses have said they spotted idling outside the Gardner on the night of the break-in. The two passengers in the Daytona, the witnesses said, were dressed as Boston police officers.

In addition, the investigators said, two members of Mr. Reissfelder’s family have said they saw the Gardner’s stolen Manet on Mr. Reissfelder’s apartment wall three months after the robbery — a brazen act, to be sure. The investigators called it a “confirmed sighting.”

The investigators said they believed there had been a second sighting of one of the stolen items, though I’m sad to say it was not my encounter in the warehouse. A tipster, they said, told them in 2009 that he had seen a work resembling “Storm” in Philadelphia.

Two years ago, at a news conference in Boston aimed a drumming up leads in the case, Mr. Kelly and Mr. Amore outlined this theory but did not identify Mr. Reissfelder or Mr. DiMuzio as suspects. But on his PowerPoint, Mr. Kelly showed me that Mr. Reissfelder and Mr. DiMuzio closely resembled police sketches of the two men who had entered the museum.

Still, those men are now dead. So is Mr. Merlino, who died in prison in 2005, as is Robert Guarente, a reputed Maine mobster suspected of having once harbored some of the art.

Investigators say they are hopeful of locating the trove, even if many of their suspects are now in their graves. They were buoyed, for example, in 2009, when Mr. Guarente’s widow, Elene, told them her husband had turned over some of the stolen art to a reputed Mafia associate, Robert Gentile of Connecticut, in a parking lot in Portland, Me., in 2002.

Investigators searched Mr. Gentile’s home in 2012 and found pistols, ammunition and silencers — but no paintings. Mr. Gentile, who officials say had ties to organized crime figures in Philadelphia, has said he knows nothing about the art.

Mr. Kelly and Mr. Amore say they are convinced that, based on the 2009 sighting and other information, some of the art made its way from Maine to Philadelphia, where it was shopped around.

“The art was seen as too hot, and there were no takers,” Mr. Kelly said.

What happens now? The investigators keep looking.

“Mrs. Gardner would have expected us to battle every day to get back her art,” Mr. Amore said.

Mr. Kelly said he rejected the notion that the art was destroyed by the thieves as soon as they realized they had “unwittingly committed the crime of the century.”

“That rarely happens in art thefts,” Mr. Kelly continued. “Most criminals are savvy enough to know such valuable paintings are their ace in the hole.”
Source: The NY Times


2/26/2015

More on USPAP 2016-2017


A couple of weeks ago I posted on the proposed modification to USPAP 2016-2017.  There were not any major changes to the document, just a continued refinement in order to make the standards a better fit with further clarifications.

Dave Maloney of Appraisal Course Consultants recently sent out his newsletter with an interesting topic and change that appears to have been not noted or emphasized in the exposure drafts.  The change adds the phrase "or an oral report" to the Record Keeping rule in which the workfile must contain sufficient content and information from the restricted appraisal oral report to produce an Appraisal Report. This will have a great impact on record keeping and research for all oral reports.

Dave explains the concerns well in the below block quote from his newsletter.  He has also contacted the ASB for further clarifications and reasoning.  It very well be one of the real estate issues that unfortunately again negatively impacts the personal property profession.  Dave will report when he receives a response.

Dave Maloney of Appraisal Course Consultants reports
In the above article we mentioned a change that has been inserted into the ASB's 2015 Summary of Actions but which was not highlighted as such by the ASB. The change involves the addition of the phrase "or an oral report" to the RECORD KEEPING RULE. The bullet is one of several which address what the workfile must contain. As changed, this particular bullet now states that, "a workfile in support of a Restricted Appraisal Report or an oral report must be sufficient for the appraiser to produce an Appraisal Report;" (emphasis added). In prior editions of USPAP there has never been a requirement that appraisers be able to produce a written Appraisal Report from an earlier oral report. This apparent change first made its appearance in the fourth and final exposure draft at which time the change was not underscored and no rationale for its addition was given as is the convention when material is being added. Nor was this change highlighted in the ASB's final 2015 Summary of Actions.

The requirement that appraisers have a workfile that contains information which would enable the appraiser to convert what was originally merely an oral report to an Appraisal Report at some time in the future is an onerous one, indeed. The implications of this addition are enormous for the personal property appraiser.

Why? Oral reports are often performed by the personal property appraiser for intended uses which do not require either listing or photographing the subject property — property which could number in the hundreds or thousands of items (many of which are often of only nominal value.) An example would be siblings inheriting an estate full of common, everyday household goods who just want to have a "walk through" oral appraisal report in order to determine if the inherited estate contains anything of significant value.

Indeed, the client often does not have time for nor wish to pay for the appraiser to photo document all items or audio record descriptions of all items which would be necessary to do if the appraiser is now required to be prepared to produce a written Appraisal Report from an oral report workfile. Without such recordation of the SR 8-2(a) identity of the property and its value characteristics, the appraiser would be hard pressed to produce an Appraisal Report years down the road of personal  property for which the client had only needed an oral report at the time.

While being in a position to use the workfile to convert a Restricted Report into an Appraisal Report is understandable, to prepare a workfile containing sufficient information to convert an oral report into an Appraisal Report is often impractical given the volume and type of property being appraised, the normal needs of the client and other intended users seeking personal property oral appraisal reports, and the usual intended uses of the such oral reports.​

We have requested clarification from the ASB and will provide you with their response in a future newsletter.
Source: Appraisal Course Consultants