Art Fraud Case Casting a Pall Over Market

Two prominent Beverly Hills art dealers have emerged as key figures in a multimillion-dollar art fraud case that is causing severe repercussions for some Southland art dealers as an investigation by Los Angeles and federal authorities expands.

A Los Angeles police affidavit obtained by The Times names Lee Sonnier, 42, former manager of the prestigious Rodeo Drive branch of Upstairs Gallery, as a primary suspect in the case.

It also identifies Stanley R. Lerner, 24, owner of Triangle art galleries--which has branches in Newport Beach and Beverly Hills--as a major witness against Sonnier and another man already arrested in the probe, Frank De Marigny.

The art fraud case has created divisiveness in the normally tight-knit and fraternal art world of the city’s more affluent communities. It has also stirred a panic among gallery clientele, with customers warily putting off--or double-checking the authenticity of--purchases.

The affidavit states that Sonnier and De Marigny “conspired to sell and distribute fraudulent artworks,” including a copy of a Pierre Auguste Renoir painting called “A Young Girl With Daisies,” the original of which hangs in the Metropolitan Museum of Art in New York. It also alleges that the eight-store chain of Upstairs Gallery Inc., which is based in Huntington Beach, had “numerous forged works of art” for sale.

Police seized 1,685 lithographs from Upstairs Gallery locations around Southern California last month in what they described as the “largest seizure ever” of fake lithographs. More than 1,200 of the allegedly bogus works were seized from a warehouse at the chain’s Huntington Beach offices. Its Costa Mesa gallery was also searched. An affidavit in support of the search warrant used by police shows that authorities also searched the offices of William McKelvey, chief executive officer of Forest Lawn Co., parent company of Upstairs Gallery.

So far only De Marigny, a dashing, smooth-talking, French-born art broker known as “Prince Frank” to many of his clients, has been charged in the wide-ranging fraud investigation. And those named in the affidavit have declared their innocence or refused to be interviewed.

But Detective William Martin, a Los Angeles Police Department art fraud expert who is heading the investigation, said in an interview that charges against others may be filed in the weeks ahead.

“It’s still in the investigative stages and there’s an awful lot to be investigated,” Martin said. “There are definitely more (fraudulent) pieces out there.”

Dealers say there is now a widespread suspicion about art authenticity that was not evident before.

Is It Real?

“People are wary and frightened,” said Charlotte Sherman, a spokeswoman for the 50-member Art Dealers Assn. of California. “We get 10 calls a day from people asking, ‘Is what I have real?’ ”

“There are so many fakes in Los Angeles, especially Beverly Hills, that it’s a big joke among people from New York and Europe who come out here and spot them,” said one prominent Beverly Hills art dealer who asked not to be named.

The Los Angeles Superior Court affidavit filed by Martin earlier this month traces the movements of Sonnier and De Marigny over the last several months. It describes events leading up to the alleged sale of the phony Renoir to a Japanese businessman named Koichi Akemoto, who has since filed a $3-million damage claim against Sonnier, De Marigny, Lerner and Upstairs Gallery executives. It also details other alleged attempts to sell phony or stolen works of art.

Sonnier’s attorney, Joel Laden, said he was not aware that Sonnier was considered a suspect in the case. He said Sonnier has never participated in fraudulent art sales. Lerner, named as a “confidential informant” in the affidavit, has refused to discuss the case.

De Marigny, 41, a French national who lived in an art-adorned oceanfront condominium in Manhattan Beach and drove a Rolls-Royce and a Ferrari before his arrest on two counts of grand theft and five counts of forgery, has also declined to be interviewed. He is being held in Los Angeles County Jail on $1 million bail.

Gallery Defended

E. Timothy Applegate, general counsel for Upstairs Gallery, said the chain of galleries never knowingly sold fake lithographs. “We believe everything we have to be genuine,” he said. Applegate also said that the company has no knowledge of Sonnier’s alleged illegal acts.

The affidavit filed by Martin states that police were first alerted to the case in August, when art dealer Annette Couch reported that she had been offered the Impressionist painting “A Young Girl With Daisies” for $3.25 million. The painting was being sold by Sonnier, according to the affidavit, though police later discovered that the genuine canvas was hanging in New York’s Metropolitan Museum.

Los Angeles authorities, who were joined in the investigation by members of the Beverly Hills Police Department, the FBI and the Federal Trade Commission, said they were subsequently contacted by Lerner, who said he had seen a fake “A Young Girl With Daisies” in De Marigny’s possession four months earlier, in April.

Martin refused to say how or why Lerner, whose Beverly Hills gallery is set to display the artworks of jazz legend Miles Davis and rock star John Cougar Mellencamp at a set of star-studded benefits this weekend, became involved in the case. But the affidavit indicates that he was a party to discussions between Sonnier and De Marigny about the forged painting. In one instance, Lerner was also made aware of the pending sale of the fraudulent Renoir.

“In July of 1989, Sonnier told Lerner and De Marigny he had a buyer for the Renoir,” the affidavit states. “De Marigny said that he would take $1.5 million for the painting. Stan Lerner was present when Sonnier’s client, named Koichi Akemoto of the Bel-Air Corp., came to ask about the painting. Lerner didn’t think that a sale was made at that time.”

Police Got Call

Police were alerted to the actual sale of the painting on Sept. 20, the affidavit states, when Beverly Hills Police Detective John Ambro received a report that Sonnier had taken a $400,000 deposit from Akemoto but never delivered the painting. The affidavit contains copies of two wire transfers of $200,000 each from Akemoto’s account to an account identified as Sonnier’s.

Days earlier, acting on a tip that a forgery ring may have supplied other works to the Upstairs Gallery chain, investigators visited several of the stores. They found five fake Chagalls hanging on the walls of the Beverly Hills gallery branch managed by Sonnier, the affidavit said. They also reported finding four fake Chagalls in Torrance, two at the Glendale Galleria, five at the Westside Pavilion and four at the Sherman Oaks Galleria.

Around the same time, police received word of another alleged fraud case involving De Marigny, according to the affidavit and interviews conducted by The Times. David Spellerberg, managing partner of the National Heritage Gallery of Fine Art in Beverly Hills, told police that De Marigny had sold his gallery a lithograph fraudulently attributed to Leonard Foujita, an Impressionist-era Japanese artist who is said to be highly popular with Japanese investors.

Spellerberg told police the lithograph was subsequently purchased by Akemoto, the same Japanese businessman allegedly swindled in the sale of the fake Renoir. The fake Foujita was supplied by a man known to him as Frank Orval, subsequently identified by police as De Marigny, Spellerberg added. At the time of the $57,000 sale, Spellerberg said he drove to De Marigny’s Manhattan Beach home. He remembered that it was festooned with Chagalls, Renoirs, Monets and even some Rodin sculptures in plaster and bronze, the affidavit states.

BACKGROUND * Painted in 1889, Renoir’s “A Young Girl With Daisies” is a celebrated example of one of the Impressionist’s favorite subjects--a pretty young woman set in a bucolic landscape. Measuring 25 5/8 by 21 1/4 inches and owned buy New York’s Metropolitan Museum of Art since 1959, the painting has been exhibited extensively throughout the United Stats and Europe. The work has been conservatively valued at $5 million. As for the reported forgery, “I would have thought it was rather a naive action to try and sell a painting hanging in a popular museum,” mused David Nash, director of fine arts for Sotheby’s of New York. “Anyone even remotely familiar with Renior would know where to look it up and determine its origin.”