£2.8bn art fraud case collapses as court rules ‘fakes’ are real

ONE OF the biggest art fraud cases of recent years has collapsed after a German court ruled that a £2.8billion collection of paintings seized by the authorities as suspected forgeries is probably genuine.

Itzhak Zarug, a 72-year-old Israeli art dealer arrested by German police and held for three years accused of running an international fraud ring, was cleared of charges of running an international forgery ring.

He was found guilty of lesser charges of inventing false provenances for a few pictures and knowingly selling three fake works, and sentenced to time already served

All but three of Mr Zarug’s collection of 1,800 Russian modernist paintings will be returned to him.

In a deeply embarrassing judgment for the German authorities, the court ruled that a five-year international investigation had found no evidence to back claims the paintings were forged.

Mr Zarug built up one of the world’s leading collections of Russian avantgarde paintings by hunting down lost works after the fall of communism.

At the time there was little interest in artists such as Marc Chagall and Kazimir Malevich and Mr Zarug was able to buy works for as little as $25 (£18).

Prices have risen steeply since then. In 2008 a Malevich painting sold for $60 million (£43 million).

Estimates of the value of Mr Zarug’s collection vary widely because of the doubt cast by the trial, but experts said it could be worth as much as $4billion (£2.8 billion).