In the two decades he spent turning his eye care office into a thriving Beverly Hills medical practice, Steven G. Cooperman came to appreciate the finer things in life.
Over the years, he purchased a home in Brentwood, traded blue-chip stocks and became a notable collector of art, particularly work by the French Impressionists.
But authorities allege that Cooperman, 56, enjoyed more than the aesthetic value of his paintings. He was indicted by a federal grand jury in Los Angeles last week for allegedly conspiring to steal a Picasso and a Monet from his home in an insurance scam that yielded him $17.5 million.
Federal investigators have also cast a spotlight on two entertainment lawyers with a Rolodex of star clients, drawing both men into a drama far more compelling than the works of Hollywood fiction they battled over in court.
Whispers of Cooperman's indictment--which alleges that he planned the theft with unidentified co-conspirators--sizzled through the national art circuit last week as appraisers and insurers worried over their own exposure to fraud.
"Cooperman duped everybody and played upon people's trust," said Bob O'Connell, a Chicago-based fine arts adjuster who handled the case for Lloyds of London. "He played on human emotion and maximized the potential for human error."
The details of how Cooperman allegedly pulled off the job are making experts wince, because they appear to demonstrate glaring weaknesses in the highly specialized world of fine arts insurance. In the soft insurance market, experts say, companies are under pressure to write policies first and ask questions later.
William Fried, a former attorney for Cooperman's underwriters, said: "Domestic insurers are paying claims you would think would be phony because they're concerned about losing the business."
O'Connell added, "Now business is so competitive, people are chasing the premium dollar without doing due diligence" to check out the client. "You just cross your fingers and hope you don't get burned."
By the time the insurers and art aficionados learned of the red flags in Cooperman's past, including a run-in with the California Medical Board, it was too late.
Estimated Value of Paintings Inflated
Claude Monet's "Customs Officer's Cabin at Pourville" and Pablo Picasso's "Nude Before a Mirror" first drew local attention after Cooperman loaned them to the Los Angeles County Museum of Art for display in a 1991 show, a spokeswoman said. Museums customarily insure loaned works under a blanket policy, and no one officially appraised the paintings.
Cooperman had purchased the Picasso in 1987 at Sotheby's in New York for $957,000. He bought the Monet a year earlier from a San Francisco gallery for about $800,000. But for the Los Angeles show, he was allowed to file his own estimate of their value: $12.5 million.
With a loan receipt for that amount--not an appraisal document--he decided to update his insurance policy. Alan Jampol, an attorney for two insurance companies involved in the case, said the agent who reviewed Cooperman's request was "not competent."
Nonetheless, the Huntington T. Block insurance brokerage issued Cooperman a $12.5-million policy underwritten by Lloyds of London and Nordstern Allgemeine Versicherungs, a German corporation. Block's decision is the subject of pending litigation.
On a Sunday afternoon in July 1992, a house worker noticed the paintings were missing and summoned Los Angeles police to Cooperman's Brentwood manse. Cooperman, who was away on vacation, told detectives by phone that the two works had been stolen.
Although police found the burglary strange, few clues led anywhere. There was no evidence of forced entry and the security alarm never went off.
Cooperman's insurers refused to pay up, saying that he had cheated by overvaluing the paintings. He filed suit, alleging bad faith by the underwriters. In his own declaration, Cooperman swore, "I did not plan, stage, or in any way participate in the theft and removal of the Picasso and the Monet from my home."
Rather than face the prospect of punitive damages if they lost before a jury, the insurers settled for $17.5 million--a figure they now estimate to be nearly nine times the actual worth of the art.
"This is not a dumb guy," Jampol said. "He's familiar with the laws of insurance. He sensed confusion in the way the policy was issued. And in my opinion, he [believes] he can think farther ahead than these insurance company schlubs."
Some insurance executives worry that their safeguards against fraud rely to a great extent on judgment.
"We all make every effort to understand the nature of our clients," said Victoria France, a vice president for the broker Fine Art Risk Management in Century City. "A lot of it has to be gut instinct."
France said brokers typically inspect the security for the insured art, but not the publicly available legal records of potential clients.
"We would never ask those questions," France said. "We aren't necessarily looking at a client as a potential crook."
Had Cooperman's insurers asked, they would have found reason for pause.
Medicare officials had been tracking abuse and overbilling complaints against him since 1975, six years after he was licensed. In 1988, the California Medical Board accused him of fabricating records and performing unnecessary surgery on the eyes of three patients. He waived his right to contest the accusation, and the board canceled his license.
In 1991, Paul Revere Life Insurance filed a complaint in U.S. District Court in Los Angeles accusing him of fraud and racketeering, saying that he bilked at least 14 insurers out of $58,000 a month by taking out 18 disability insurance policies without disclosing a previous heart condition or the existence of the other policies. Paul Revere won a judgment allowing it out of its policy, but it isn't clear whether the other firms are paying him.
During the course of his career, he has been a plaintiff in more than three dozen shareholder lawsuits against public corporations.
Nonetheless, Cooperman's insurance broker approved his $12.5-million policy. Authorities say that put the firm on the road to regret--a road mapped by con men who cost all insurers about $20 billion a year in fraudulent property claims.
Cooperman's underwriters are suing the Huntington T. Block brokerage to recoup their losses on the disappearance of the paintings. Trial is set for Jan. 25 in Washington, D.C., Superior Court.
Lovers' Squabble Provides a Lead
Shand Stephens, an attorney for Block, agrees that the industry has problems when it comes to art insurance. But he said it lies not with issuing policies, but with investigating claims. He faulted the underwriters for settling with Cooperman instead of battling him in court on the theory that he engineered the theft.
"A suspicion, even a well-founded one, isn't enough to justify a denial" of a claim, Stephens said. "What an insurance company needs to do is dig harder."
In Cooperman's case, the trail quickly went cold, despite the $250,000 reward for the paintings. The Picasso and the Monet had tumbled into oblivion.
They might have stayed there if not for the unraveling of a love affair on the other side of the country.
After a few months of romance, Ohio saleswoman Pamela A. Davis and her attorney boyfriend from Los Angeles, James J. Little, began filing complaints against one another for stalking and violence. Investigators have grown weary of the couple's squabble, but Los Angeles Police Det. Donald Hrycyk credits Davis with providing the first tip the art was in Cleveland.
Davis also told police in Rocky River, Ohio, that Little was in possession of paintings taken from California.
Cleveland FBI agents found the paintings, one in a cardboard box, one wrapped in a blanket, in a rented storage locker in February 1997, an agency spokesman said. Investigators found evidence that they had been placed in a Los Angeles-area locker shortly after the alleged burglary.
Little agreed to testify in exchange for immunity.
In a confidential immunity agreement, Little said he didn't participate in the removal of the paintings, but received boxes containing them in 1994 from his onetime partner, entertainment lawyer James P. Tierney. Little said he believed they were Tierney's property and told authorities he forgot he had them when he moved to Cleveland.
Tierney, 56, a former federal prosecutor in New York and Los Angeles, has represented a range of entertainers and firms, including the Beach Boys' Brian Wilson, Geffen Records and Timothy Hutton. He also did legal work for Cooperman.
Tierney declined to comment. His lawyer, Michael Doyen, said Tierney "has been and is cooperating fully with the government" investigation. Asked if Tierney was involved with the theft, he declined further comment.
Meanwhile, Little, 42, has his own problems. He was convicted in 1997 of driving under the influence and, earlier this year, of attempted possession of cocaine. He once appeared in court shaved of all body hair in what the judge said was an attempt to dodge a drug test. (Police typically require a hair sample to test for drugs.)
With Little's credibility in doubt, Assistant U.S. Atty. Richard Robinson declined to say whether the immunity deal is still valid. Little did not return phone calls for comment.
Cooperman, now retired in Fairfield, Conn., is expected to appear for arraignment in federal court in Los Angeles within weeks. He will "vigorously fight the charges," according to his attorney, Melissa Widdifield.
If convicted of the charges, which include conspiracy and money laundering, he faces up to 120 years in prison and a forfeiture of his assets. The two paintings that once adorned his walls are now in FBI custody, waiting to be used as evidence against him.
Jampol, a lawyer for the insurers involved in litigation over the matter, believes Cooperman's appreciation of fine art may prove to be his undoing.
"I always felt in my heart he would not destroy the paintings," Jampol said. "He should have."