The art world remains riveted by the still-unfolding scandal involving the once-renowned Knoedler Gallery.  To recap, over the course of more than a decade, Knoedler solddozens of works of art purportedly created by some of the most sought-after artists of the twentieth century—works that have since been widely discredited as fakes.  A Long Island art dealer named Glafira Rosales—who has now pleaded guilty, among other things, to charges of wire fraud, filing false tax returns and money laundering—allegedly told the Knoedler Gallery at the time that she represented an anonymous collector who was gradually liquidating his late father’s remarkable art collection. The collection supposedly contained previously-unknown works by famed abstract expressionists including Jackson Pollock, Mark Rothko, Robert Motherwell, and Willem de Kooning.  In fact, according to law-enforcement authorities, both father and son were fictional, and the collection a fraud; reports indicate that Rosales was paying a little-known immigrant artist in Queens to create a total of 63 works.  Rosales then passed off many of the counterfeits as highly valuable masterworks to Knoedler, which in turn sold approximately 40 of them to collectors for a total of over $60 million.  The Knoedler Gallery closed abruptly in late 2011 as questions began to surface about some of the works. The scandal has also spawned various civil lawsuits by allegedly defrauded buyers, including one suit where Judd Grossman was one of the attorneys representing a private collector concerning the $17 million purchase of a counterfeit Jackson Pollock painting.

On August 27, New York Magazine published a story about Ann Freedman, Knoedler’s president from 1994 to 2009 and its director from 1977 to 2009.  The story examined Freedman’s role in perpetuating Rosales’s scheme by championing the paintings to the larger art community.  The piece featured extensive interviews with Freedman herself, in which Freedman explained why she (and many other established art-world figures) had believed Rosales’s stories and the authenticity of the works.  She noted that she had even purchased three of the works for her own personal collection, and expressed her intense dismay at the revelations about Rosales:  “I am as shocked as everybody, more shocked, as I am the central victim.”

The article also cited dealer Marco Grassi, owner of Manhattan gallery Grassi Studios, who felt that Freedman could and should have done more to uncover the fraud.  He told New York Magazine:

This has ruined one of the greatest galleries in the world.  It has trashed a lot of people’s money.  It seems to me Ms. Freedman was totally irresponsible, and it went on for years… A gallery person has an absolute responsibility to do due diligence, and I don’t think she did it.  The story of the paintings is so totally kooky.  I mean, really.  It was a great story and she just said, “this is great.”

Last week Freedman filed suit against Grassi for defamation, libel, and slander based on his comments reported in New York Magazine. The complaint asserts that, contrary to Grassi’s insinuations, Freedman engaged in thorough due diligence regarding the various works from the Rosales Collection.  The complaint painstakingly recites by name and position the many curators, authors, scholars, dealers, and other experts who Freedman claims to have consulted regarding the paintings, and whom she says offered positive opinions of the authenticity of the works.  The complaint further describes Freedman’s efforts to verify Rosales’s claims about how her mysterious client had come to own the paintings.

Throughout the complaint, Freedman asserts that her efforts, research, and diligence “went well beyond what is customary” in the art world, where, she says, “confidentiality is commonplace and transparency is the exception rather than the rule.”  She alleges that “[f]ew galleries would have sought even a quarter of the confirmation Freedman demanded before selling these works.”  She also emphasizes that buyers of the works understood that this was “the way of the art world: investors buy a painting below market value, with knowledge of its undocumented history, in the hope that some day, with enough supporting expert opinions, the painting will be worth many times its purchase price . . . a risky bet that this sophisticated crowd makes every day in the art market . . . [and] a gamble these investors ultimately made on the Rosales Collection when they bought works from Knoedler with the hope of turning a profit for themselves.”

This lawsuit is yet another remarkable turn in an already riveting story.  While the lawsuit will keep the focus on the Knoedler scandal, Freedman’s claims also may also spark a larger conversation about the diligence owed by galleries, the fallibility of experts, and the risks taken by buyers when it comes to artwork with a foggy past.