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Three arrested over suspected 14-year art forgery scheme

German prosecutors have arrested three suspected art forgers who are believed to be at the centre of a major scandal involving the sale of dozens of faked early 20th century expressionist paintings which have fetched up to half a million Euros apiece at top auction houses.

The case involves allegedly bogus works sold off by a German art dealer couple named as Wolfgang and Helene Beltracchi and her sister.

The three are currently being held in detention pending trial later this year following police raids on their homes last August which led to their arrest.

The trio are accused of systematically duping the art world over a period of 14 years. They are alleged to have supplied top auction houses with forged paintings they claimed were undiscovered works by famous artists, including the German expressionists Max Ernst and Heinrich Campendonk.

Der Spiegel magazine, which broke the story after being tipped off by Cologne state prosecutors, yesterday compared the case to Germany's Hitler Diaries scandal of the 1980s, when its rival, Stern magazine, was duped into publishing excerpts from faked diaries it believed were written by the infamous Nazi leader.

Helene Beltracchi is alleged to have started putting forged paintings on the market in 1995. She claimed that she had been left the works by her grandfather, Werner Jägers, who she maintained had bought them at the beginning of the Nazi era from his friend, the renowned Jewish art dealer Alfred Flechtheim.

The Beltracchis sold most of their paintings, claiming that they were from the Werner Jägers Collection.

However, subsequent investigations have shown that Jägers, who died in 1992, was a member of the Nazi party who had little interest in art and made his money in the construction industry. There is no evidence that he knew Flechtheim and neither his widow nor his business associates knew anything about an art collection.

Prosecutors say that the Beltracchis are suspected of putting a total of 34 faked paintings on the art market. They include an alleged forgery the couple claimed was by the expressionist Max Pechstein which was sold to a Swiss art dealer in 2003 for €498,000.

Art historians have since discovered that the work was most probably copied "one for one" from a small watercolour by the same artist entitled Reclining nude with a cat. They say a projector was almost certainly used to make the forgery.

The couple is believed to have put up an effective smokescreen by occasionally auctioning off paintings that were genuine originals. In 1998, for example, the Beltracchis sold the painting Le Havre Beach by the renowned French painter Raol Dufy at the Lempertz auction house in Cologne.

"For once it was a real one," confirmed Henrik Hansen, Lempertz's managing director.

However in 2006, the auction house was offered a painting by Helene Beltracchi's sister which was conclusively proven to be a forgery. The work named Red Picture with Horses was supposed to have been painted by the early 20th century Rheinisch expressionist artist, Heinrich Campendonk. It was sold to the Maltese company Trasteco at auction for €2.9m. But Trasteco became suspicious and commissioned two art historians to investigate.

Their findings concluded that the paint contained a colour which did not exist in 1914, when the work was said to have been completed. Proscecutors are now trying to establish how many of the paintings were faked and whether the Beltracchis were the forgers.