Australian art dealer investigated by fraud squad
Date: 16 Mar 2009 | | Views: 2720
SYDNEY. A prominent Sydney art dealer is believed to be in hiding following allegations that he duped investors out of millions of dollars. A strike force led by the New South Wales state police fraud squad is investing the activities of the Ronald Coles Investment Gallery in semi-rural northwest Sydney.
“The strike force is investigating allegations of fraud relating to the operations of an art gallery in Castle Hill,” NSW police said in a statement. “It is anticipated this will be a protracted inquiry and we can make no further comment at this time.”
According to reports in Sydney newspapers, police raided the Ronald Coles Investment Gallery on 21 January and seized 404 paintings worth more than Aus$5m. Police have reportedly taken statements from more than 150 people owed between A$20,000 and A$1.2m.
Mr Coles reportedly sold artworks to investors for their personal retirement portfolios. Under Australian tax law, people who invest in art for superannuation purposes cannot keep the artworks with their personal assets. This meant that Mr Coles retained the works he sold to investors, and displayed them at galleries, social functions, sporting events and celebrity homes.
Mr Coles also allegedly sold some paintings without investors’ knowledge or permission, and without passing on the proceeds. It has been reported that some investors spotted their paintings on the internet when they were already in the hands of other owners.
The gallery specialised in some of Australia’s best-known artists, including Arthur Streeton, Tom Roberts, Frederick McCubbin, Eugène von Guérard, Sidney Nolan, Arthur Boyd, Hans Heysen, Albert Namatjira, Norman Lindsay and D’Arcy Doyle. Mr Coles advertised that he could cater for all needs, with art prices ranging between A$2,000 and A$1.8 million.
Shortly before his disappearance in late January, Mr Coles told a Sydney newspaper that he was facing financial difficulties. “Everyone’s in trouble and anyone who denies that is living in a fool’s paradise,” he said. “There are a couple of matters presently before the courts, and I’m vigorously defending them. It would be inappropriate to say any more at this stage.”
Mr Coles is reportedly facing an application for a winding-up order in the NSW Supreme Court.