Where there is money to be made, there is fraud. And, it comes in every imaginable shape and form, not just in the financial industry.
Where there is money to be made, there is fraud. And, it comes in every imaginable shape and form. This story isn’t about the financial industry, per se. Instead, it is the art business, which is a multibillion trade worldwide. While there are many ways to game this system — for example, the production and selling of fakes — our story today is one that is less publicized: the actions of art advisors.
Oil on wood at Art Basel Miami, 2013. Photo by Shirley M. Mueller
One such professional is 62-year-old Helge Achenbach. He lives in Germany in a rarefied world. Bertold Albrecht, a supermarket heir, and his wife Babette, were his clients. Christian Boehringer, who will inherit the pharmaceutical company of the same name, also hired Achenbach. The operant word here is the past tense.
Babette, now a widow, sued Achenbach, and Boehringer made claims against Achenbach, too; though, evidentially, the dispute was resolved without a trial.
The accusations of both parties relate to invoices received from Achenbach. Though arrangements can vary, if an advisor buys art for his clients, the typical fee is 10% or 20% of the purchase price. So, a German expressionist painting that cost $1 million to the art advisor could be marked up to $1.2 million dollars.
But, Babette says she and her husband were invoiced 30% or 40% higher than the original cost. For the Albrechts, this reportedly added up to nearly 60 million euros in Achenbach’s pocket and not their own.
While the investigation takes place, Achenbach is a pre-trial detention and Babette is in limbo and does not know what will happen. Although Boehringer has resolved his issue with Achenbach out of court, he may serve as a witness if others have similar claims.
While the vast majority of art advisors are not only helpful but honest, as with all things in life, the buyer must be wary — even when the purchase is a service. That is what both Achenbach and Bernie Madoff offered.