Real Estate Mogul Mixed Up in $11 Million Art Fraud
San Francisco commercial real estate investor Luke Brugnara ("Lucky Luke," according to his Wikipedia entry) is learning what seems like an obvious lesson: Don't agree to buy $11 million in artwork by Willem de Kooning, Edgar Degas, George Luks, Joan Miró, and Pablo Picasso unless you can put your money where your mouth is. Previously convicted of tax evasion and trout poaching, Brugnara has been charged with mail fraud in connection to the aborted sales, reports the San Francisco Chronicle.
The deal was arranged in April 2014, and included $7.3 million for 16 de Kooning paintings and $3 million for a Degas sculpture. Brugnara also agreed to spend $450,000 on a Luks painting, $160,000 for a Miró drawing, and $145,000 on a group of Picasso etchings.
Though the New York dealer offering the works initially requested a down payment up front, Brugnara demurred, citing his earlier purchase of a $500,000 Renoir painting, a sale that went off without a hitch. He claimed to be opening an art museum in San Francisco. When pressed by the dealer, who wasn't aware of any planned museums in the Bay Area, Brugnara amended his story, claiming the non-existent institution would be in Las Vegas.
FBI Special Agent Jeremy Desor has been investigating the case, and filed a court affidavit with U.S. District Court in San Francisco detailing the transaction. The report states that the dealer traveled to Brugnara's home to oversee the delivery of the art, which was shipped from New York in five custom crates.
According to Desor, Brugnara was surprised that the dealer accompanied the artwork on the scheduled April 7 delivery date. "Brugnara instructed the delivery personnel to leave the crates in his garage. The art dealer had never before seen anyone request art of such value to be placed in a garage," wrote Desor.
The dealer's suspicion grew when she entered the house and "observed it was almost empty with the exception of two chairs." She particularly found it odd that there was no other artwork, and was not satisfied by Brugnara's claim to be in the midst of a move. He seemed eager to get her to leave, declining her help to open the crates, and claiming to be "very busy."
Allegedly, Brugnara refused to pay for the artwork and claimed that he had received it as a gift.
Following a 2010 conviction for failing to file tax returns on the sale of several properties, Brugnara served concurrent sentences, 30 months for the tax evasion, and 15 months for poaching trout from a private dam in Gilroy.
Though Wikipedia makes mention of an "art collection valued over $100 million which includes one of the only privately owned paintings by Leonardo da Vinci," a report from a federal probation officer written upon Brugnara's 2012 release from jail said that he had "no assets whatsoever." At various times Brugnara's holdings have also included works by Raphael, Caravaggio, and Titian, among other Old Masters.
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