The New Jersey U.S. Attorney's Office recently filed a civil asset forfeiture complaint seeking a collection of artwork containing more than 2,200 pieces and valued at more than $15-3/4 million, which Philip J. Rivkin amassed over several years, starting in 2010.
The complaint alleges that the artwork--bought with money from what the U.S. Attorney's office claimed was the sale of fraudulent credits for renewable diesel fuel--was transported in interstate commerce knowing that it was the proceeds of fraud and was utilized in laundering the proceeds of fraud.
Rifkin's company, known as Green Diesel, claimed to operate a facility in Houston that generated biomass-based diesel fuel. According to the court papers filed by the U.S. Attorney Paul Fishman, it did not, however, actually generate any such biodiesel. According the U.S., from November 2007 through at October 2011, Green Diesel sold RINs to companies such as Shell Oil, BP, CITGO and Exxon that were invalid because they did not, in fact, represent the production of any biodiesel at all. Purchasers of invalid RINs from Green Diesel have reported losses exceeding $78 million.
The court documents claimed that the owner of Green Diesel, Philip Rivkin, used part of the proceeds of the fraud to purchase at least $18 million worth of artwork, chiefly photographs.
According to the documents and press release from the U.S. Attorney's Office, on Jan. 30, 2012, Rivkin caused 396 packages of artwork to be transported to a warehouse on Frelinghuysen Ave. in Newark, NJ. The artwork was stored there until late June 2012, when it was moved to a warehouse in New York on its way to Spain. On July 12, 2012, it was seized for forfeiture pursuant to a warrant issued by a U.S. Magistrate Judge Mark Falk in Newark.
Civil forfeiture cases are "in rem" proceedings--proceedings against "things." In this case, the Complaint is against the seized artwork, not against the persons who committed the underlying unlawful acts or anyone else. The law permits persons claiming an interest in the property an opportunity to appear and present their cases that they are innocent owners of the property and the property should not be forfeited. Whether the United States is entitled to forfeit the property will be determined. When property is forfeited to the United States, the law allows the U.S. Department of Justice to utilize the property to reimburse victims of the underlying unlawful activity for their losses--in this case mostly large oil companies.
On or about April 30, 2012, the EPA issued a Notice of Violation to Green Diesel alleging that from July 16, 2010 to July 15, 2011 Green Diesel improperly generated approximately 60,034,033 D4 RINs, and all of those RINs were invalid (hereinafter "invalid RINs") because no biodiesel had, in fact, been produced.
According to the U.S. government, bank and purchase records indicate that, during the period from August 2009 to July 12, 2012, while the fraudulent activity was ongoing, Rivkin used Green Diesel's bank account and other bank accounts containing fraud proceeds to purchase at least $18 million in artwork, chiefly photographs, from art dealers and art galleries.
According to the court documents, Rivkin's assistant stated that Rivkin began buying artwork, specifically vintage photographs, after the "EPA money" started coming in. Rivkin's assistant also told agents that he/she had assisted Rivkin, at his direction, to move assets from Houston, Texas, to Spain. In particular, Rivkin caused a substantial amount of artwork to be moved from Houston to Newark for eventual shipment to Spain.
The seized artwork has been appraised by New York Fine Art Appraisers, which concluded that it has a total fair market value of $15,773,128.
Numerous major photography auction houses, dealers and galleries were sources for the work, although no wrong-dealing has been charged or implied against any in the art photography field. Rifkin attended many of the auctions and major art and photography fairs, as well as frequented many internet sites relating to the sale of photography. He had an interest in photography since the age of 16, and it was a passion of his. He was reportedly the purchaser at a French auction of Gustave Le Gray's "Bateaux Quittant le Port du Havre" in the summer of 2011, which for a brief time set a new record for a 19th-century photography at just over $1.3 million. But this was not the only important photograph that Rivkin reportedly purchased, nor is it known to have been a part of the group confiscated.
Court records indicate that, not only was he a major buyer of modernist images at auction, but also made over $3 million in purchases from Camera Lucida, a company run by collector-dealer Michael Mattis, which was listed as having the largest amount of art/photography sales to Rivkin in the court documents.
All the major New York auction houses (Sotheby's, Swann, Christie's, Phillip de Pury's and Heritage Gallery) and many other major photo dealers were also involved in the case, even if they weren't mentioned specifically in the court documents. Many have had their records in regards to Rivkin threatened with a subpoena for a court appearance in Houston, although apparently the government now acknowledges that the threat was apparently not enforceable.
For the record, Rivkin also purchased from my company, Vintage Works, Ltd. In addition and not surprisingly given their importance in the field, Bruce Silverstein Gallery, Howard Greenberg Gallery, Lee Gallery, Joel Soroka Gallery and Paul Hertzmann, Inc. were also mentioned in the court documents as to having supplied top photographs to the collector. I also know of several other important dealers who had their records threatened with a subpoena who sold to Rivkin who are not listed in the court documents--at least not yet.
While this is a complex case and the government has yet to prove their assertions, I do remain convinced that Rivkin's interest in photography was genuine and has been there since he was a teenager in Atlanta. And, frankly, he will be missed in the market.