Tag Archives: Subhash Kapoor

An American tax evader in London

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The Manhattan District Attorney’s Office criminal complaint against Subhash Kapoor contains some interesting tidbits about the use of antiquities purchases for tax evasion. In March 2005, Kapoor sold the twelfth-century bronze Standing Jina (allegedly illegally excavated) to a New York private collector and provided an invoice recording the sale for $64,442 plus $5,558.12 tax – a total of $70,000.12. According to a sales ledger seized by DHS-HSI agents, however, the actual price paid by the collector was $435,000, which at the time in New York would have attracted a sales tax payment of something like $37,410. A couple of years later, in March 2007, Kapoor issued an invoice recording the sale of the twelfth-century bronze statue of the child saint Sambander (allegedly stolen from the Siva Temple in Sripuranthan, Tamil Nadu) to the same collector for $125,000 plus $10,468.75 tax – a total of $135,468.75. Kapoor’s sales ledger shows the collector actually paid $775,000, which would have attracted $66,650 sales tax. Thus, working together, Kapoor and the collector seem to have defrauded the New York tax payer out of $88,033.

From November 2006 to February 2007, the Standing Jina was on display in London at the Royal Academy’s ‘Chola: Sacred Bronzes of Southern India’ exhibition. In the exhibition catalogue, its owner was described as a private collector (Guy et al. 2006: 140-141). Private tax evader would have been more appropriate.

Reference

Guy, John, Vidya Dehejia, John Eskenazi and Daud Ali, 2006. Chola: Sacred Bronzes of Southern India. London: Royal Academy.

Was it worth it Richard?

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Close to the heart of any successful antiquities trafficking racket lurks a restorer/conservator, sometimes more than one. Restorers repair and clean antiquities in such a way as to improve their appearance and durability, and thus desirability. Removing dirt or other accretions from the surface of an antiquity exposes its original finish and detail, while in the process uncovering any evidence of past repairs or forged modifications. Such work helps establish the identity, condition, authenticity and quality of a piece, while improving its appearance and aesthetic appeal, all important factors for determining value and setting price. But restoration work of this type might also destroy evidence of looting or theft. It could involve fixing together a recently broken object, perhaps a stolen one broken into pieces to expedite transport or passage through customs. Thus while the ostensible purpose of restoration is to stabilise and curate an antiquity, at the same time it improves the value of an antiquity, promotes its saleability, and might even remove evidence of theft or illegal trade.

Restorers do not often figure in criminal cases relating to antiquities trafficking. In December 2016, a criminal complaint filed by the Manhattan District Attorney’s Office against New York Asian Art dealer Nancy Wiener identified two unnamed restorers as ‘co-conspirators’, though no charges were pressed. It was timely then on 8 July 2019, when the Manhattan District Attorney’s Office filed criminal charges relating to antiquities trafficking against Subhash Kapoor and seven alleged co-conspirators, including restorers Neil Perry Smith in the United Kingdom and Richard Salmon in New York. The complaint contains a wealth of information about the activities of these restorers, with Kapoor sending metal objects to Perry Smith and stone objects to Salmon, an indication perhaps of Kapoor’s estimation of their respective talents. Of course, a criminal charge isn’t in itself definitive proof of wrongdoing, and the named restorers remain innocent until proven guilty. But looking through the complaint at what is revealed about Salmon, for example, it is not hard to see why charges were levelled at him. Multiple invoices provide information about his services, which include such actions as ‘cleaning’, ‘picking out detail’, ‘bringing out the quality of the stone’, and ‘mounting’. All this sounds innocent enough, the normal bread-and-butter work of a restorer. But what about when he claimed payment for ‘picking out details with “ancient earth”’ and ‘touching out “new breaks”’? Why would he add ‘ancient earth’ to a piece, and was he not suspicious about the cause of ‘new breaks’, and breaks more generally?

In early 2006, for example, Kapoor bought from Chet Ram Yadav in India and took possession in New York of a second-century BC sandstone Mahakoka Devata or Yakshi (Bharhut Pillar). The pillar had been stolen from the home of an Indian resident in July 2004 and appears to have been broken into four pieces for shipment to New York. Kapoor valued it at $15 million. On 2 May 2006, Salmon charged $11,500 for reassembling the four pieces by drilling and joining them with dowels, subsequently filling and disguising joins, including making up missing areas of the bottom, touching out scratches and bringing up the lustre of stone. On 5 January 2012 DHS-HSI agents seized the Pillar from New York storage.

In autumn 2006, Kapoor bought from Chet Ram Yadav in India and took possession in New York of nine objects stolen in August 2006 from the Vishnu Varaha Temple in Kari Talai, Madhya Pradesh, India. They included a pair of eleventh-century, sandstone celestial Apsaras (Pair of Apsaras), originally joined as one piece though separated and damaged by the time they reached New York. Kapoor valued them at $95,000 each. On 9 October 2006, Salmon charged $1,700 for making up missing sections, cleaning, touching out ‘new breaks’, picking out details and enhancing colour of the stone. But he repaired and prepared for sale each Apsara separately and failed to restore the original integrity (and thus appearance) of the piece. On 26 July 2012, the Apsaras were in storage in New York though their present whereabouts are unknown.

In repairing broken objects and more generally patching and cleaning, knowingly or not Salmon’s work might have been important for hiding evidence of theft and illegal trade and improving saleability, but in relative terms he does not appear to have been very well paid for his services. As can be seen from the table below, the money charged by Salmon for his work was very little compared to that made or expected to be made by Kapoor. Altogether, for 24 jobs on material valued by Kapoor at approximately $31 million, Salmon charged only $84,875, or 0.27 per cent of the material’s prospective retail value. Given the element of risk involved for Salmon, working as he was on suspect material, he seems not to have factored the risk into his pricing strategy. Perhaps he was unaware of the dubious provenance of the material he was working on. Perhaps it was simply because a sense of professional impunity encouraged him to minimise his risk assessment. Remembering that before Kapoor restorers had not figured in criminal indictments, perhaps Salmon simply thought that it would never happen to him. Well, it has now. Given that Salmon finds himself named on a criminal complaint, he might regret charging such relatively small sums of money. Perhaps other restorers are taking note and adjusting their prices accordingly.

Object (as named in complaint) Kapoor valuation (v=valuation, s=actual selling price) Salmon charge Percentage object value
Monumental Buddha Head $4.5 million (v) $750 0.02
Herakles with sword $1.75 million (v) $3,300 0.19
Quranic Wall Tiles $485,000 (v+s) $24,850 5.12
Shakyamuni Buddha $2.5 million (v) $3,800 0.15
Bharhut Pillar $15 million (v) $11,500 0.08
Stone Ganesha $500,000 (v) $1,500 0.3
Torso of a Celestial Figure $75,000 (v) $2,600 3.47
Torso of a Devata $450,000 (v) $1,550 0.34
Dancing Ganesha $75,000 (v) $900 1.2
Salabhanjika $155,000 (v) $850 0.55
Pair of Apsaras $190,000 (v) $1,700 0.89
Divine Couple $75,000 (v) $950 1.27
Celestial Figure $75,000 (v) $2,250 3.0
Apsara with Lotus $75,000 (v) $750 1.0
Celestial Pulling Thorn $225,000 (v) $1,500 0.67
Kubera $1.5 million (v) $4,850 0.32
Linga $275,000 (s) $575 0.21
Pallava Shiva $650,000 (v) $2,150 0.33
Balasubrahmanya $225,000 (v) $2,150 0.96
Drum Pilaster $750,000 (v) $5,750 0.77
Worshippers Relief $585,000 (s) $2,000 0.34
Pratyangira $247,000 (s) $1,800 0.73
Ardhanari $225,000 (s) $1,950 0.87
Dwarapalas $495,000 (s) $4,900 0.99
       
Totals $31,082,000 $84,875  

Nevertheless, even if Salmon was underselling himself, he was clearly doing good business with Kapoor. The prices tabulated above are only for a small number of objects. The complaint contains details of 15 separate invoices over a nine-year period, tabulated below, each invoice itemising a larger number of objects than described in the complaint. Looking at the invoices, it is also clear that they represent only a part of the total work performed by Salmon for Kapoor in any one year. The 14 November 2003 invoice, for example, also presents unpaid claims dated back to 5 September and 15 September totalling $5,305, in addition to even older unsettled bill of $17,390, though presumably in November still for work conducted in 2003. The invoices for these claims are not available for inspection. So in 2003, Salmon must have charged Kapoor more than the $46,110 evident on invoices, perhaps much more. In 2006, the year for which there are most invoices, Salmon charged a minimum of $39,655. Still not a large sum of money for a New York-based business though.

Invoice date Bill  
12 June 2002 $3,700 +$8,435
16 September 2002 $12,540  
5 December 2002 $13,245 +$5,550
13 March 2003 $17,665  
14 November 2003 $5,750 + bills of 5 Sept and 15 Sept totalling $5,305, plus old bill $17,390
10 November 2004 $3,800  
7 September 2005 $11,050 +$6,070 owed
18 February 2006 $14,030 +$7,380 owed
2 May 2006 $11,500 +$11,060 owed
20 September 2006 $4,200 +$9,620 owed
9 October 2006 $9,925 +$13,820 owed
8 February 2007 $36,260 +$3,745 owed
9 March 2007 $8,250 +$39,750 owed
15 March 2008 $24,850  
21 April 2009 $43,350 +$11,300 owed

Restorers are crucial to the ongoing health of the antiquities market. Whether they know it or not, their work effectively launders trafficked antiquities and facilitates their entry into legitimate commerce. Having said that, most restorers do not work on trafficked or even suspect antiquities. Those that do must comprise only a handful, but that is all it takes, and they have in the past been able to believe themselves out of the reach of the law. The Kapoor complaint changes all that. It remains to be seen whether or not the charges will stick, but the very fact that restorers are named must send a chill warning through the profession. It is time for them to clean up their game. It just isn’t worth it. A more hostile environment for restorers will reduce their willingness to work with suspect material and should act to improve their due diligence. Upping their game in this way will make it much more difficult for dealers to bring trafficked antiquities to market. Even if the charges against Salmon don’t stick, by naming a pair of restorers, the complaint has highlighted a potential weakness of the antiquities trade and shown how to exploit it.

Was it worth it Subhash?

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In October 2011, New York-based Asian Art dealer Subhash Kapoor was arrested in Germany and in July 2012 extradited to India where he awaits trial facing criminal charges related to the theft and trafficking of antiquities. At the time of his arrest, Kapoor was proprietor of the sales gallery Art of the Past in New York City, dealing in cultural objects from a range of South and Southeast Asian countries.

Starting in January 2012, the Department of Homeland Security-Homeland Security Investigations (DHS-HSI) followed up Kapoor’s arrest with a series of raids on his New York sales and storage premises, seizing business records and a large number of antiquities thought to have been stolen and trafficked. By April 2015, DHS-HSI had recovered 2,622 antiquities with a total appraised value of $107.6 million (Mashberg 2015). On 8 July 2019, the Manhattan District Attorney’s Office filed criminal charges related to antiquities trafficking against Kapoor and seven alleged co-conspirators. The complaint describes a series of offences starting at least by August 1986 with the incorporation of Art of the Past and continuing until 2016. It alleges Kapoor traded thousands of stolen antiquities with a total value exceeding $145 million.

Based on documentation and other evidence recovered during the DHS-HSI investigations, the meticulously detailed complaint contains a wealth of information relating to Kapoor’s activities, which is primarily reproduced in support of the charges brought against him, but which also casts light on the operation of his business and the antiquities trade more generally. One immediate point of interest is the evidence of price mark-ups between what Kapoor paid for an object (cost price) and what he sold it for (selling price). Leaving aside prices recorded on customs forms, which might be fraudulent, the DHS-HSI was able to gain more reliable evidence of mark-ups from Kapoor’s correspondence with his suppliers, sometimes supplemented by informant testimony.

To start with, the complaint provides prices for the purchase and sale by Kapoor of three objects. The complaint also provides Kapoor’s valuations of objects not sold by the time of the DHS-HSI raids. Comparison of the actual selling prices of the three sold objects with Kapoor’s pre-sale valuations of them allows an assessment to be made of the accuracy of Kapoor’s valuations. The valuations can then be used as proxy selling prices for several other unsold pieces and allow the calculation of four further potential mark-ups.

In early 2002, Kapoor bought from the Indo-Nepal Art Centre in Mumbai, India a third-century limestone relief depicting worshippers of Buddha (Worshippers Relief) stolen from the Chadavaram Stupa, Andhra Pradesh, India. He valued it at approximately $550,000. In 2005, Kapoor sold the relief to the National Gallery of Australia (NGA) for $585,000. In September 2016, the NGA returned it to India (NGA 2016; Arlt and Folan 2018). A fax from the Indian vendor records that Kapoor paid $70,000 for the relief, meaning a mark-up from cost price to selling price of 736 per cent and a potential mark-up for Kapoor’s valuation of 686 per cent.

In late 2002, Kapoor bought from the Indo-Nepal Art Centre in Mumbai, India two objects stolen from the Vriddhagiriswarar Temple in Vriddhachalam, Tamil Nadu, India. The first was a twelfth-century granite sculpture of the goddess Pratyangira, which he valued at approximately $250,000. In July 2005, Kapoor sold the Pratyangira to the NGA for $247,000. In September 2016, the NGA returned it to India (NGA 2016). The second was a tenth-century granite sculpture of Shiva as Ardhanarishsvara (Ardhanari), which Kapoor valued at $250,000. In June 2004, he sold the Ardhanari to the Art Gallery of New South Wales (AGNSW) for $225,000. In September 2014, the AGNSW returned it to India. A fax from the Indian vendor records that Kapoor paid 11,00,000 rupees ($22,634) for both pieces together, meaning a mark-up from cost price to selling price of 1,985 per cent and a potential mark-up for Kapoor’s valuation of 2,109 per cent.

The magnitude of these price mark-ups is extraordinary, averaging out at 1,569 per cent. There is also reasonably good agreement between Kapoor’s valuation of the objects and the price he ultimately secured when selling them. Thus Kapoor’s valuations can be used as proxy price indicators, which allows the calculation of several more potential price mark-ups.

In 2005, Kapoor visited Pakistan where he purchased two objects. The first was a second–third-century marble Buddha head (Monumental Buddha Head), which he valued at approximately $4.5 million. On 5 January 2012, DHS-HSI agents seized the Buddha Head from storage in New York. The second was a first–third-century, schist Herakles-Vajrapani holding a sword (Herakles with Sword), which he valued at approximately $1.75 million. On 26 July 2012, DHS-HSI agents seized the Herakles from storage in New York. According to informant testimony, Kapoor paid $500,000 for a batch of antiquities including these two pieces. Even if the cost of other purchased antiquities is excluded, the combined valuation of $6.25 million represents a potential mark-up from cost price of 1,150 per cent. Allowing for the cost of the other three antiquities in the $500,000 cost price, the real percentage mark-up would be higher still.

In April 2006, Kapoor visited Pakistan where he purchased from Rawaiee Al Lotus a number of antiquities, including five eighteenth–nineteenth-century glazed Quranic wall tiles (Quranic Wall Tiles). He valued them in total at $445,000. A fax from Rawaiee Al Lotus shows Kapoor paid $20,000 for the tiles, a potential mark-up from cost price of 2,125 per cent.

On the same April 2006 buying trip, Kapoor bought a second–fourth-century schist statue of Herakles as Vajrapani (Monumental Herakles), which he valued at $950,000. He also bought a second–fourth-century Seated Buddha on Lotus (Seated Buddha), which he valued at $650,000. On 26 July 2012, DHS-HSI agents seized both pieces from storage in New York. Kapoor bought the Herakles and Buddha as part of a lot containing three other objects. A fax from Rawaiee Al Lotus shows that Kapoor paid $200,000 for the lot. Even if the cost of the other three antiquities in the lot is excluded, the combined selling price of $1.6 million for the Herakles and the Buddha represents a mark-up from cost price of 700 per cent. Allowing for the cost of the other three antiquities, the real percentage mark-up for the two pieces would be higher still.

In 2005, Kapoor purchased a twelfth-century sandstone sculpture of the monkey god Hanuman from an Indian dealer in New York, which he valued at approximately $225,000. On 26 July 2012, DHS-HSI agents seized the Hanuman from storage in New York. An informant states that Kapoor paid $30-40,000 for the Hanuman, a mark-up from cost price to selling price of approximately 543 per cent.

Object Mark-up (per cent)
Worshippers Relief 736
Pratyangira and Ardhanari 1,985
Monumental Buddha Head and Herakles with
Sword 		1,150
Quranic Wall Tiles 2,125
Monumental Herakles and Seated Buddha 700
Hanuman 543

Again, averaging out at about 1,200 per cent, the magnitude of these mark-ups is remarkable, though they do not constitute profit. Kapoor would have needed to deduct associated business costs for such things as staffing, conservation and storage, not to mention tax. Not least is the fact that many of the objects remained unsold at the time of the DHS-HSI raids and the potential mark-ups had yet to be realised. It is interesting that the lowest mark-up is for the Hanuman, which Kapoor bought once it was already in the USA. He bought the other objects abroad and imported them, thereby running the risk they might be seized by customs. Perhaps the element of risk was lower for Kapoor when buying the Hanuman, with the lower mark-up reflecting a higher price paid to his supplier who was the one accepting the risk of financial loss or worse associated with importing the piece. The complaint reckons that at the very least there are 39 stolen objects worth nearly $36 million unaccounted for, which probably means they have been sold. That would be something like $33 million for Kapoor before tax and expenses. Was it worth it? He can’t spend the money in prison.

Arlt, Robert and Lucie Folan, 2018. Research and restitution: the National Gallery of Australia’s repatriation of a sculpture from the Buddhist site of Chandavaram, Journal of Art Market Studies 2: 1-17.

Mashberg, Tom, 2015. New York authorities seek custody of stolen artifacts worth over $100 million, New York Times, 14 April.

NGA, 2016. National Gallery of Australia returns two sculptures to India, press release, 19 September.

Acquired from Spink & Son, Ltd., London by 1999

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Asia Week New York has kicked off in good style. On 11 March, US Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) agents seized two objects from Christie’s New York auction house. The objects, lots 61 and 62 of the scheduled 15 March sale of ‘The Lahiri Collection: Indian and Himalayan Art, Ancient and Modern’, are believed to have been smuggled out of India.

The seizures were made as part of Operation Hidden Idol, an ongoing investigation into the business of former New York dealer Subhash Kapoor, who is currently under arrest and on trial in India. The ICE release does not specifically say that the seized objects passed through the hands of Kapoor, but the New York Times reports that they were recognized from images recovered during a raid on Kapoor’s New York premises in 2012.

The ICE press release states that lot 61 appears to have been sold sometime between 2006-2007 by Oliver Forge to London–based Brandon [sic] Lynch Ltd. Oliver Forge and Brendon Lynch are joint proprietors of art dealership Oliver Forge and Brendan Lynch Ltd. Forge and Lynch left Sotheby’s London in 1997 when the company stopped its London sales of antiquities after allegations of malpractice made by Peter Watson in his book Sotheby’s: Inside Story. Thus the implication is that the objects were smuggled out of India to Kapoor, and that one of them passed through the hands of Oliver Forge and Brendan Lynch Ltd, before being acquired by the Lahiri Collection and consigned for sale at Christie’s.

The provenances provided in the Christie’s catalogue are for lot 61 ‘Acquired in London by 1999’ and for lot 62 ‘Acquired from Spink & Son, Ltd., London by 1999’. So both pieces are claimed to have been in London prior to 1999, with one and perhaps both acquired from Spink. Did Kapoor have dealings with Spink? It seems not. The press release states that ‘HSI special agents were able to determine that both of these artifacts had come from a specific smuggler and supplier of illicit cultural property in India’. Is Spink a false provenance? Maybe so. The ICE release goes on to state that ‘HSI special agents have tracked many false provenances and this has been one of the pillars of Operation Hidden Idol’. If Spink is a false provenance, it would be interesting to know how Christie’s attempted to verify it during their due diligence procedure.

The London-based company Spink & Son often turns up in the provenance listings of Asian objects. Back in the 1970s and 1980s, Spink was a clearinghouse for Asian antiquities, once described as a ‘department store’ type of a dealer [1], offering a retail experience for customers to browse and buy. Some at least of the material sold through Spink was of dubious provenance, including the Koh Ker athlete offered for sale at Sotheby’s in March 2011 with a provenance of ‘Spink & Son 1975’, which was returned to the ownership of Cambodia in 2013. But Spink never published comprehensive, illustrated catalogues of the type offered by Sotheby’s and Christie’s, so that now it is difficult to ascertain whether or not an object was ever sold at Spink. Perhaps there are internal records of transactions, but if so, their location is not publicly known.

Christie’s bought Spink & Son in 1993, and ended Spink’s Asian sales in February 2000 before selling off what remained of the company in 2002. Today, Spink no longer sells Asian material. So, if any records of Spink’s Asian sales still exist, Christie’s must hold them. Perhaps Christie’s was able to verify the Spink provenance of lot 62 internally using these records, though it has issued no statement to that effect. A Christie’s spokesperson did, however, complain that evidence known to HSI agents is not available to support the company’s due diligence procedures. She was quoted as saying that the absence of publicly available records is ‘one of the difficulties the art market faces in vetting antiquities’. Quite so. That is something we can all agree upon. Perhaps to help remedy the situation Christie’s would like to make publicly available what records it retains of Spink’s Asian sales, and if it does not possess such records, explain where they are or why they no longer exist. Surely a resource of such importance for reconstructing and verifying provenance would not be shredded for reasons of space or economy – unless of course commercial companies are not as keen to ‘vet antiquities’ as they claim to be.

Reference

  1. Moncrieff, Elspeth, 2000. Death of the oldest art dealership in the world, Art Newspaper no. 101: 34.

Jason Felch now has more information availble on his blog Chasing Aphrodite.