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Art dealer agrees to plea deal in $2-million sale of fake Picasso

April 27, 2010 |  3:57 pm
Fake Picasso in frame An art and antiques dealer who sold a fake Picasso for $2 million agreed to plead guilty to federal fraud charges, authorities said Tuesday.

Tatiana Khan, 70, owner and operator of the Chateau Allegré gallery on La Cienega Boulevard, agreed to plead guilty to witness tampering and making false statements to the FBI.

As part of the plea deal, the West Hollywood resident admitted she paid an art restorer $1,000 to create a reproduction of a work by Pablo Picasso -- a 1902 pastel “La Femme Au Chapeau Bleu” or “The Woman in the Blue Hat.”

Khan will enter her plea to the felony counts next month before U.S. District Judge Manuel L. Real. Although she faced a maximum of 25 years in federal prison, the agreement with federal prosecutors means she is not likely to serve more than 21 months in prison.

Khan allegedly told artist Maria Apelo Cruz that the real Picasso artwork had been stolen from one of Khan's clients and that the dealer needed a copy to play a trick that would help catch the thief. Soon after, Khan allegedly sold the drawing for $2 million to the art prospector.

When Khan was contacted by the FBI in 2009, the complaint alleged, the gallery owner told Cruz not to divulge that she had created the fake Picasso. Khan also asked Cruz to change the invoice to say that Cruz had simply retouched a primitive painting, according to the federal criminal complaint.

In an interview, FBI agents said Khan told them she obtained the drawing from a cosmetologist whose family had purchased the Picasso before the Bosnian war, as collateral for a $40,000 loan.

Khan allegedly told the agents she believed the cosmetologist's family paid about $300,000 for the artwork but that she later learned it was worth $2 million to $5 million and decided to sell it on the lower end. The cosmetologist has since died.

According to the plea agreement, Khan falsely told an FBI agent who was investigating the sale that Khan had obtained the drawing from an acquaintance. Khan also admitted she told the art restorer to lie to the FBI by saying she only did restoration work for Khan and did not do any copying work.

As part of her plea agreement, Khan will make full restitution to the purchaser of the fake Picasso and will forfeit a work by the abstract impressionist painter Willem de Kooning that Khan had purchased with some of the proceeds from her fraud.   

-- Andrew Blankstein

Photo: The fake Picasso was sold for $2 million. Credit: U.S. Department of Justice