Mr Drewe said Israel, South Africa, Russia, Iran, Iraq and Croatia were secretly flooding the art market with fakes to raise money from auctions.
He told the jury at Southwark Crown Court, London, that the countries paid commissions, or bribes, to bring works by artists, such as Matisse and Picasso, into the country. "A number of countries, a number of organisations within a country, desperately needed foreign exchange," said Mr Drewe.
"They authenticated them in London and New York and raked in the money. Of course, many of them, I am afraid, proved to be fakes."
Mr Drewe, 50, who is defending himself against a series of charges - including conspiracy to defraud - having fired his defence team, spoke to the jury after six days of prosecution evidence.
Speaking through a microphone from the dock, he said a web of deceit had allowed art dealers to join in a "horrible conspiracy".
It paved the way for arms deals and the sale of defence technology, he said.
Mr Drewe, from Reigate, Surrey, said he had written to a number of leading galleries to point out that many works were not genuine. He said he "roared with laughter" when he heard of the Tate's correspondence over forgeries that he had discovered.
He asked the jury why such galleries were full of paintings that could be shown to be fake. The answer, he said, was they wanted to sell art work without investigating its history.
Mr Drewe is alleged to have masterminded a complex scam, creating histories, or provenances, for non-existent works by famous modern painters, before paying a talented, but struggling, artist to create them for him.
With Daniel Stoakes, from Stafford, he denies a charge of conspiracy to defraud. He also denies charges of using a false instrument, theft, forgery and false accounting.
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