Maria Larsson, a young Swiss art historian and collector, thought she was completing a weeks-long negotiation with New York’s Team Gallery by fulfilling the invoice in front of her. In exchange for the $18,900 wire transfer she sent that day in March, she believed she would be receiving an edition of American photographer Ryan McGinley’s Kaaterskill Falls (2015), an arresting image of a tiny nude figure scaling a monumental snowdrift. Larsson already knew the exact wall where she planned to install it.

More than two months later, however, the wall intended for Kaaterskill Falls remains empty—and is unlikely ever to display McGinley’s photograph. Larsson’s money is gone, but not because Team ever received it. No one from the gallery drew up the invoice she paid, and the Houston-based bank account where she sent the funds has no affiliation with either Team or McGinley’s studio. The would-be sale is now under investigation by federal authorities in two countries. And the only minor good to come out of the episode is a visceral reminder that a cyberfraud largely relegated to the art market’s background last year still very much threatens buyers and sellers alike today.

Installation view of Ryan McGinley’s “Winter” at Team Gallery (2015)
Photo: courtesy Team Gallery

A Lesson in Crime

The type of fraud used here, and its startling prevalence in the art trade, were first reported by the Art Newspaper in October 2017. Known as a “man in the middle” scam, the technique requires a hacker to remotely infiltrate a gallery email account, impersonate an employee, and eventually send fraudulent payment instructions as a supposed correction to a legitimate invoice. After receiving payment from the unsuspecting victim, the perpetrator transfers the funds elsewhere and vanishes.

At the time, TAN confirmed that hackers had targeted nine galleries or individuals (with varying degrees of success), including such prominent international dealers as Hauser & Wirth, Simon Lee, and Thomas Dane. After being defrauded in the midst of a particularly high-value transaction, London-based dealer Laura Bartlett was even forced to close her space. Now, more than a year and a half after the crime wave was made public, the number of hacked galleries appears to be growing.

To provide a window into the step-by-step progression of the hack, Larsson allowed artnet News to review her correspondence with Team (comprised of a blend of legitimate and fraudulent messages). In response to a detailed summary of her account, Team Gallery founder José Freire sent the following statement to artnet News: “The situation with Ms. Larsson is, indeed, unfortunate. We are cooperating fully with the investigation into this matter and hope for a prompt and successful resolution. This is the only purported case of cyber fraud involving the gallery and we take the matter very seriously.”

Team offered no specific counters to Larsson’s story. The details she shared reinforce the very real dangers bred by the gallery sector’s refusal to adopt a standardized, industry-wide set of best practices, especially as more and more transactions move from the intimacy of in-person encounters to the cool distance of emails and texts.

Interior view of SBW Talent Campus, the private school housing much of Maria Larsson’s collection. Courtesy of Maria Larsson.

Intercepted

In Larsson’s telling, she began seriously negotiating with Team about the McGinley photograph in mid-February 2019. She had never before acquired a work from a US gallery and had no existing relationship with Team. Most of HTC Kunstsammlung, her collection currently numbering about 50 pieces, is exhibited inside SBW Talent Campus, a private school in the Swiss district of Kreuzlingen where she teaches art history and hopes to socialize students to living with contemporary art. The McGinley work would be shown on campus, too.

On February 13, Larsson had her first email exchange with one of Team’s staffers, Gabriella Caputo, about an edition of McGinley’s Kaaterskill Falls available for $21,000. Within one hour of Larsson’s request for a 10 percent discount, she received an email purportedly from Caputo—sent from Caputo’s actual gallery email address—agreeing to the request. The discount dropped the price to $18,900.

It would later come to light that the author of this email was not the actual Gabriella Caputo—but its contents seem knowledgeable, even eloquent, on review. The message contained additional information about McGinley’s Fall and Winter series (Kaaterskill Falls hails from the latter), including documentation of auction results at prices higher than the gallery’s original asking price. The sender even promised to send Larsson a copy of Team’s catalogue on the Fall and Winter series if she were to acquire a work. “There were zero signs something could be wrong,” Larsson told artnet News. “I had zero doubts.” She later emailed Caputo that they had a deal.

A fraudulent message sent to Maria Larsson from the hacked email account of Team Gallery sales and press associate Gabriella Caputo. Courtesy of Maria Larsson.

The first sign of trouble appeared nearly two weeks after this exchange. On February 26, Caputo emailed Larsson an invoice for Kaaterskill Falls at $21,000, as if she had no recollection of agreeing to the 10 percent discount. After Larsson emailed to point out the error, she quickly received a reply, once again sent from Caputo’s Team email address (as were all purported fraudulent messages sent to Larsson and reviewed by artnet News), blaming the mixup on the “accounts department” and attaching a revised invoice for $18,900. (As of press time, Team listed seven employees; none has a title associated with accounting.)  

In a side-by-side comparison, the original and “revised” invoices look identical in their formatting and overall composition. Only upon close examination of the fine-print payment instructions do discrepancies emerge. Unlike the original, the “revised” invoice includes no option to pay by check to the gallery in New York, only wire instructions to an account under the name Fusion Packagings at a Capital One Bank branch in Houston, Texas.

The email explained the change by saying that “due to the reduction in price for you, payment would have to be sent directly to artist company [sic].” (This is one of a few breakdowns in grammar that appear during the exchange, but the errors could easily be passed off as the kind made when hurriedly typing emails on a mobile device.)

Crucially, Larsson admits in retrospect that she never called the gallery to confirm the change. “Of course, I’m guilty in terms of not making this last-step due diligence,” she admits. But on March 18, she authorized her bank (which raised no red flags of its own about the invoice) to make payment in full to Fusion Packagings and awaited confirmation of receipt from Caputo.

After three days of silence from Team, Larsson picked up the phone on March 21. “I was fed up and called the gallery and then Gabriella said she had never written anything about a reduction or ever sent me an invoice of $18K,” she explained. It was the first time the two had ever spoken to each other—and the last.

A “man in the middle” scam inserts a fraudster between a gallery’s networked communications and its clients. Photo: Sebastian Gollnow/dpa (Photo by Sebastian Gollnow/picture alliance via Getty Images)

All Hell Breaks Loose

On March 22, Larsson received an email from gallery manager Dan Barrett-Freire stating that, “in light of the issues Gabriella is having with her email account,” he would be taking over the correspondence. This email included a “corrected” invoice for $21,000 and a disclaimer to disregard all previous invoices, as the gallery only works with one bank, and “especially not one outside the city we are based.”

For a period of roughly three weeks, Larsson claims all of her contact with the gallery took place through calls and texts to or from Barrett-Freire’s mobile. (“Nothing felt safe,” Larsson says.) She says that the two worked together “on friendly terms” during this time while her bank tried to retrieve the payment. The exchange yielded at least two pieces of evidence showing the depth and breadth of the hack.

First, Barrett-Freire sent Larsson a screenshot of an email he and Caputo received from someone claiming to be her on March 21—as fate would have it, the same day that she actually called the gallery to find out whether her $18,900 wire had landed. The fraudulent email came from an address almost identical to her own, except that it misspelled her last name as “Larson” with only one “s.” True to the “man in the middle” playbook, the message effectively sought to reassure the gallery that payment would arrive soon, buying time for the perpetrator to make off with the funds they had already tricked Larsson into sending.

Second, Barrett-Freire sent Larsson a screenshot from the gallery’s IT specialist showing that Caputo’s computer had been accessed by an IP address in Nigeria seven times in the span of two hours that day alone. The compromised computer was permanently shut down immediately after.

Larsson said she would not hold the gallery responsible for the hack if her bank were able to get her money back. Otherwise, she warned in an email, they “would need to look into this matter from all possible sides and angles,” including filing claims with insurance carriers, notifying law enforcement, and sharing the loss (by having Team refund half the lost money or offering another McGinley work as compensation).   

In the end, the worst-case scenario came to be. Larsson’s bank held her liable for neglecting to confirm the identity of the account holder. Her interactions with the gallery soured soon after. 

artnet News has reviewed several emails sent by Larsson to Team’s leadership since that time, with tones ranging from amicable to confrontational. Larsson alleges that the only response she received to any of these emails came on May 7, when Barrett-Freire emailed her to say that it is “NOT [Team’s] legal responsibility to cover those damages,” according to its insurance company and accountant.

The dealer Jose Freire with Sam McKinniss’s drawings at Art Basel Hong Kong in 2018, the gallery’s final art fair. Photo by Andrew Goldstein.

The Aftermath

As of press time, Larsson and Team appear to be at an impasse. She remains most frustrated by what she perceives as the gallery’s unwillingness to meet her halfway on a solution. There appears to be enough blame to go around, but no one involved wants to accept the lion’s share of it. In the meantime, she has filed separate reports with the Federal Office of Police in Switzerland and the Federal Bureau of Investigation in the US. Lawsuits also remain a possibility.

About all that can be said for certain is that this episode demonstrates once again why the art market is so susceptible to fraud, and cyberfraud in particular. The strategy deployed by the hackers here remains identical to the strategy reported in the art press roughly 18 months ago. That deluge of cybercrime prompted plenty of anxiety and discussion in the trade, but few, if any, calls for widespread cooperation, and even fewer discernible signs of change.

Part of the problem lies in the widening gap between the haves and have-nots in the gallery system. Every dealer would undoubtedly devote money and time to implementing high-level cybersecurity if they had ample supplies of both, but only the most commercially successful among them enjoy this luxury. Modestly sized galleries like Team increasingly feel forced to cut from flesh to bone in today’s art economy, and it is all too easy in such a challenging financial environment to write off hacks as a risk too remote to warrant even modest spending. (Notably, in March 2018, Freire announced that his gallery would stop exhibiting at art fairs so that it could redirect its budget toward exhibitions, publishing, and other endeavors.)

But finances aren’t the only issue. It is old news that the gallery economy remains one of trust, in which reputation is too often allowed to substitute for procedural rigor. Larsson alluded to this in retrospect. “I didn’t know José and Dan personally,” she said. “If it was a gallery that had only been open two weeks, you’d react differently. But the gallery has been around for 21 years.” This blind faith, coupled with our growing comfort with digital transactions, makes the gallery sector vulnerable to hacks that could easily be short-circuited with something as simple as a phone call.

Larsson says that she has not come forward to solicit sympathy. Instead, she hopes her mistakes can raise awareness in a community in need of another wake-up call. “I told several people in the industry, and they said this could have happened to any of us,” she said. “Of course, for me, it’s a very expensive lesson.”