Buyers of Fraudulent Art Prints to Recoup $316K

     CHICAGO (CN) – A man who sold fraudulent art prints, including works by Picasso and Dali, on eBay must pay more than $316,000 in restitution to 21 victims, the 7th Circuit ruled.
     James Kennedy pleaded guilty in 2010 to three counts of mail fraud for selling counterfeit “limited edition” fine art prints of artists such as Alexander Calder, Salvador Dali, Marc Chagall, Roy Lichenstein, Joan Miro and Pablo Piccasso.
     Legitimate prints are made under the artist’s supervision with a plate. The artist then signs each print and the plate is destroyed.
     Kennedy sold his false prints on eBay, knowing that they bore forged signatures or markings to make the prints appear as if they were part of an original limited edition.
     At his sentencing hearing, the government presented evidence that Kennedy made more than $1 million in fraudulent sales between 2000 and 2008, making him eligible for a sentencing enhancement.
     Kennedy objected that the amount was less than $1 million, but he admitted that he paid one of his suppliers of fraudulent art $500,000, and that he then marked up the price of the art up to 10 times as much as he paid.
     A federal judge found that his sentence should be enhanced, but cut the government’s restitution request from $822,000 for 135 victims to $316,000 for 21 victims.
     The 7th Circuit affirmed the sentence and restitution award Friday.
     “We agree with Kennedy that the government’s handling of its restitution request in this case was difficult to follow,” Judge William Bauer wrote for a three-judge panel. “The restitution amount sought in a case may evolve as the government obtains more information during its investigation. Here, though, the government revised its request not because of additional evidence, but because the District Court reminded the government of its burden of proof. Nonetheless, the government’s less-than-ideal handling of its restitution request does not mean that the final amount determined by the District Court lacked evidentiary support. Fortunately for the government, the district court here went to great lengths to sort through the disorganized record to ensure that its calculation of restitution was precise and victim-specific, relying upon sworn complaints submitted to the government, copies of invoices indicating that payment was made, victim interviews by postal inspectors, copies of bank records, and copies of cancelled checks.”
     With regard to the sentencing enhancement, the District Court “primarily relied upon Kennedy’s own admissions regarding the amount he had spent purchasing counterfeit art from just one dealer – $500,000 – and then marked up before selling to his customers,” according to the 13-page ruling. “Kennedy identifies no problems with the district court’s reliance on these admissions, and we therefore find no error in the District Court’s determination that the loss amount exceeded $1,000,000.”

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