A former Sydney art dealer has been released on bail after being charged over a multi-million dollar investment fraud. Police say 64-year-old Ronald Coles sold investors valuable artworks that had either already been on-sold to others or were already the property of others. More than 40 investors allegedly lost a combined total of more than $8 million. Coles was arrested by officers from Strike Force Glasson which was established in 2009 with Fraud and Cybercrime Squad detectives to investigate the alleged artwork investment fraud. Police say they began investigating in early 2009, with 400 paintings seized while officers established who legitimately owned them. Coles was arrested this morning at Gosford Police Station on the New South Wales central coast. The Ettalong resident has been charged with 77 counts of larceny and 10 counts of cheat and defraud.
Ronald Coles was one of Australia’s leading art dealer, under the crimes act Coles face 77 counts of Larcenya s a bailee and a further 10 counts of director/officer cheat or defraud. Coles specialised in fine art, and dealt with some of Australia’s most respected artist, including Sir Arthur Streeton and Brett Whitely.
NSW Police launched Strike Force Gleeson in 2009 after a Fairfax/The Sydney Morning Herald investigation unearthed what has turned out to be Australia’s largest art fraud. Coles is believed to have defrauded as much as $39 million from some of Australia’s most respected art collectors and investors.
In 2009, police raided properties owned by Coles, including his Kenthurst Gallery, and seized more than 400 paintings. Some of the works included works by Streeton and Norman Lindsay.
Coles has been under investigation since 2008. In a statement police said:
Police will allege numerous valuable artworks were sold to investors, with many of those investors unaware that the pieces they had purchased had also been on-sold to others, or were already the property of others. It will be alleged more than 40 investors incurred financial losses in excess of $8 million. During the course of the investigation, more than 400 paintings were seized by police with extensive inquiries conducted to determine the legitimate ownership of those paintings. About 10am today (Monday 16 January 2012), a 64-year-old Ettalong man was arrested at Gosford Police Station. He has been charged with 77 counts of Larceny as a Bailee and 10 counts of Director Cheat and Defraud. He is due to appear at Gosford Local Court today. Inquiries by detectives under Strike Force Glasson are continuing.
ronald coles picture source: Kate Geraghty - Fairfax
PREVIOUS POSTS: May, 2011. A treasure trove of artworks by some of Australia’s most acclaimed artists, including Brett Whiteley, Arthur Streeton, Arthur Boyd and Norman Lindsay, is missing and may never be found. The 30 vanished works, which include a watercolour from Lindsay’s Sirens series, are collectively worth millions of dollars. They were held by the disgraced art dealer Ron Coles, alleged mastermind of Australia’s largest ever art fraud, whose investment scheme is the subject of an ”extremely protracted and legally intricate” investigation by the NSW Police fraud squad.
They include Frederick McCubbin’s (above) Labouring in the Bush, which went under the hammer for $320,000 in 2005, and Whiteley’s Flame Tree, Port Vila, sold for $270,000 the same year. Also missing are Boyd’s Moonrise with Riversdale Hill, Streeton’s Melbourne from the Dandenongs, Lindsay’s Gypsy Girl as well as paintings by Tom Roberts and Eugene von Guerard. Leading art expert Michael Reid said: ”The missing itinerary features good examples of work from a host of major Australian artists. A loss of any aspect of our material cultural heritage is a loss that’s never going to be regained.”
In 2009, Sydney-based O’Maras Valuers & Auctioneers posted a global alert to the art community about the most valuable of the missing works. Managing director Tim O’Mara said: ”They were all subject to some form of financing. We did a considerable amount of investigation and found numerous instances where the same paintings were financed out to more than one party. But … we can only account for one.” Strike Force Glasson was formed in January 2009 after The Sun-Herald revealed Coles had disappeared, having sold clients’ investment art without passing on the proceeds. There are 150 investors chasing $30 million in lost art and money, some of whom paid Coles from their self-managed superannuation funds to buy and sell art on their behalf. With tax laws prohibiting super-funded investment art from being stored at home, Coles always retained the works – then sold them multiple times. Clearly, there were many sides to the man who would regularly spend Sunday afternoons charming prospective investors over tea and jam scones at his gallery.
PREVIOUS POSTS: May 19, 2009. Aother chapter in the drama surrounding the Ronald Coles Investment Gallery at Kenthurst closed in minutes on Saturday when the house and gallery failed to sell at auction. The property at 1 Porters Rd was passed in at $1.32 million. The mortgagee repossession sale was instigated by the ANZ Bank which is owed $3.4 million. On Thursday detectives attached to the State Crime Command were formally told that the Australian Securities and Investment Commission would not be examining the case any further. Fraud squad detectives and detectives from Strike Force Glasson have launched a criminal investigation. Creditors have joined forces and are funding a civil investigation against Ron Coles and two associates.
“A claimant-funded civil investigation by the receiver could assist with the police investigation, however the criminal investigation will be conducted by police regardless of the outcome of the claimant-funded investigation,” a police spokeswoman said.
Gallery clients contacted police earlier this year when they found the gallery shut and empty. They were concerned about investment paintings and money allegedly owed to them. On January 21 police stepped in and searched a private home in Dural and one at Kenthurst, retrieving 404 artworks believed to be worth more than $5 million. The artworks had been bought by investors to fund their retirement. The police moved the artworks to auction house Bonhams and Goodman which authenticated the paintings and released a detailed catalogue in March. It is alleged the some of the works were forgeries and some had numerous owners. Ownership claims are before the NSW Supreme Court.
PREVIOUS POSTS: April 28, 2009. Fugitive Kenthurst art dealer Ronald Coles is on the run from an outlaw bikie gang after he vanished with more than $1million of its cash. NSW Police have received more than 150 complaints from banks, collectors and investors about Coles, who owes $30million in lost art and money, but the bikies will not be making a formal complaint. Coles had an arrangement with the gang: it delivered large sums of cash; he legitimised it through investment art. Coles held onto the art, promising to sell it at a profit. But he has vanished with their paintings and cash. The story was confirmed last week by a senior member of the gang’s Sydney chapter, who spoke on condition of anonymity.
“Ron Coles may be the first person in history to rip off a bikie gang of a million bucks but if he thinks there will be no repercussions, he can think again,” he said.
The bikie confirmed 10 gang members were owed between $80,000 and $100,000 each. “The plan is to bundle him in a car, take him for a ride and have a little chat, although I have to say a couple of the guys are getting impatient. They have other ideas.” In January a Sun-Herald investigation uncovered dozens of investors and two Supreme Court actions relating to the dealer. Detectives from Strike Force Glasson raided Coles’s Investment Gallery in Kenthurst and two other properties, seizing firearms guns and 404 paintings. That art was estimated to be worth at least $5 million. But most of it was deemed worthless.
Coles allegedly started reselling works this year that belonged to his own clients, at hastily arranged art shows along the east coast. On January 17 he held a sale in the Shoal Bay Resort at Port Stephens, which the bikies gatecrashed.
“We arrived in numbers,” the bikie said. “Ron’s whereabouts were not immediately obvious so we headed over to his stepdaughter, Sage Carver. We said: “Where’s our paintings? Where’s our money’?” Carver said: “Hi, guys. There’s no problems. Meet us at the gallery tomorrow. It’s all down there, ready to go.” The bikies then delivered a bombshell: “We’ve just been through your house and your gallery. There’s nothing in there.”
Witnesses said the gallery floor cleared in seconds as Ms Carver “began howling.” She begged the men not to hurt her and, pointing at the gallery walls, sobbed and said: “Take what you want. It’s yours.” The bikies picked five paintings. Before leaving they gave Ms Carver a final message: “Tell Ron we’ll be back.”
PREVIOUS POSTS: March 3, 2009. Forgeries of at least four Australian masters have allegedly been uncovered in what experts say could be the largest case of art fraud in the nation’s history. NSW Police formed Strike Force Glasson after a Sun-Herald investigation into Sydney art dealer Ronald Coles, who has disappeared allegedly owing hundreds of investors more than $30 million in lost art and money. Fraud squad detectives seized firearms and more than 400 paintings from Mr Coles’s investment gallery in Kenthurst and two other private properties. Fine art auctioneers Bonhams and Goodman have since been appointed to catalogue, value and authenticate the collection.
Chief executive Tim Goodman would not comment on the findings, but it’s understood the seized works contain forgeries of Arthur Streeton and Pro Hart, with further concerns surrounding many works carrying David Boyd’s signature. Bonhams has previously identified a fake Norman Lindsay oil painting that Mr Coles sold to a private investor in 2006. A leading identity in the auction world said: “From my experience, it’s the largest art fraud of its kind in Australia. It’s so far-reaching in terms of the hundreds of everyday mum-and-dad investors caught up and the amount of money involved.
“Generally Ron always had a very good reputation amongst all the auction houses so it has come as a complete surprise to them as much as anyone.”
Law surrounding superannuation and investment art was “contradictory to the conservation of art” and created a “loophole which is open to abuse”, said Australian Commercial Galleries Association president, Beverly Knight. By law superannuation-funded art must be kept separate from personal assets. For that reason most of Mr Coles’s clients left the art with him to store or sell for a profit. It was never seen again. NSW Police are still taking statements from hundreds of investors nationally who were caught up in the scheme. The complaints have unearthed allegations of forgeries and multiple ownership of works by Tom Roberts, Sir Sidney Nolan, Norman Lindsay and a long-time friend of Mr Coles, D’Arcy Doyle.Doyle’s widow, Jennefer, flew to Sydney on Wednesday to inspect 90 seized paintings and drawings carrying her late husband’s signature. “They’re all D’Arcy W. Doyles, no doubt about it,” she said, adding that she hoped people’s “faith would be restored” by the news.
Mr Coles’s solicitor, Peter Zacharatos, said on Friday his client would not be making any comment until police had finalised their investigation. “He’s not in hiding; he’s been in contact with police. He strenuously denies dealing in fakes,” Mr Zacharatos said.